Published on: January 28, 2010Now available on iTunes…
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Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.
Today, some notes from the road...
Last weekend I had the privilege of attending and moderating a panel at the annual marketing conference held at Northwestern University’s Kellogg School of Management in Chicago. The panel discussion focused on private label vs. national brands, and featured an exceptional group of people: Mike Ellgass, senior director of private label grocery at Walmart; Christina Hennington, director of merchandise planning at Target; Doug Miliken, vp of global brand development at Clorox; Pat Simmons, vp of consumer marketing at General Mills; and Scott Gordon, director of marketing at Daymon Worldwide.
While it was tough to facilitate the discussion and take notes at the same time, there were a few things I learned during the session.
One is that national brands actually don’t mind it when a retailer has a strong private brand. The reason? Retailers that are focused on private brands tend to have eliminated secondary and tertiary brands from their shelves, which actually creates a good environment for both the national brand and own-label alternatives. I also got the sense that when a retailer has a strong private brand, it means that the organization is highly focused and strategic...and manufacturers like doing business with such retailers, even if it isn’t always easy.
But there is a concern about this trend, with some people telling me that they believe that faced with elimination, more of these smaller manufacturers will look to get into the private brand business...but may not have the same commitment to quality as some of those in the business now. That’s something that retailers need to be aware of, they say...because a decline in quality could hurt the overall private label trend line.
Another interesting note. At one point, a panelist made reference to the truism that most people don’t like to go grocery shopping, but many people in the audience objected to that statement - and they said they actually loved shopping in storers like Whole Foods and Trader Joe’s. Stores that, as it happens, are anything but mainstream and offer strong own-label alternatives. That ought to be a lesson for everyone.
After being in Chicago, I traveled to the considerably warmer climes of Florida for the Food Marketing Institute annual Midwinter Executive Conference. There, I was thrilled to hear Ken Waller of Hy-Vee say during a session on meal solutions, based on new work done by the Coca-Cola Retail Research Council, that he believes that every meal eaten at an Applebee’s, a Ruby Tuesday, an Olive Garden or even a McDonald’s, is a meal that is not being bought at the supermarket...and that food retailers need to fight tooth and nail for every dollar and every meal component and occasion.
I’ve been saying much the same thing here on MNB for years, and sometimes I get raked across the coals for suggesting that supermarkets need to play hardball for share of stomach. I’m not surprised that Ken feels this way - I think Hy-Vee plays a pretty outstanding game of hardball in all the markets it serves - but it is always nice when I find out that people a lot smarter than me share the same opinion. Of here’s how far I would take it...if that means retailers should reconsider selling gift cards for establishments that compete with them for share of stomach, so be it.
It’s a jungle out there. Whether we’re talking about private label or meal solutions, I think we have to be tough-minded, focused, and as competitive as possible when defending our own turf and looking to grow our businesses.
Because if we’re not, the other guy will be. And then we’re in trouble.
For MNB Radio, I’m Kevin Coupe.
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