Is private labelexactly what grocers looking to gain ground in the nonfoods aisle need?
Improving the selection in the nonfoods section via the profitable private label channel could help grocers achieve the elusive “one-stop shop” status, say industry observers. For most consumers, this is an idealistic concept that does not truly exist quite yet. Most find that today there are either convenience or super stores with great selections of general merchandise that carry some food items, or naturally, grocery stores with ample food selections and just an aisle or two of picked-over nonfoods items.
As private label is embraced in the consumer mindset—even preferred among many—cultivating a portfolio of nonfoods, store brand items has become more valuable than ever to retailers, observers add.
According to the Private Label Manufacturer’s Association (PLMA), dollar volume for private label products in supermarkets is up and nonfoods categories are showing growth and potential. The 2017 PLMA Yearbook’s chart of top-selling private label products in the supermarket channel shows that paper goods is currently the top performing category within private label nonfoods. Wrapping materials and bags also landed in the top 20. Total volume for non-food grocery, general merchandise and health and beauty aids at supermarkets amounted to $46.7 billion dollars, according to statistics from the New York-based organization.
Items from the nonfoods aisle dominated the charts for the most growth in both dollar and unit volume, with seasonal general merchandise and candles making large gains. Personal care items including women’s fragrance, bath accessories, grooming products and deodorant also made the top 10.
Many observers say that all of the nonfoods categories in supermarkets have room for growth. Calico Brands, a manufacturer of utility and pocket lighters, creates products that are high impulse, which leads to high sales, say officials for the Ontario, Calif.-based company.
Calico Brands, maker of the Scripto product line, produces all of its private label lighters in-house, including the printing and packaging. This helps the company offer quick order fulfillment, says a representative from the Scripto sales and marketing team. “Our printing and packaging capabilities provide the means to produce a wide variety of package sizes, product combinations and custom imprints,” the representative adds. “We provide custom logo imprints on a number of pocket lighters and utility lighters in a variety of sizes and colors.”
According to the PLMA Yearbook, private label lighters account for 11.5 percent of lighter sales in the supermarket channel. Supermarkets that are willing to carry an even larger selection of lighters could stand to gain from this category, observers add. “We provide a ‘one stop lighter solution’ for all lighting needs, everything from standard, torch flame, extra-large nozzle and folding, to squeeze lighters,” says the Scripto sales and marketing team representative. “Our products provide the largest selection of varieties and features of any other utility lighter company.”
Promoting these types of items in high traffic areas of the store and even cross merchandising to create a store within a store concept are tactics that Calico Brands suggests to its grocery partners to create incremental sales. Some cross merchandising specifics the Scripto sales and marketing team points out include offering candle lighters in the candle set, standard and torch flame lighters in the seasonal section and space-saving folding lighters at the front checkout.
Many companies that work with retailers on their store brands are able to offer similar advice in the way of marketing and product strategies. Some, including St. Marys, Ont., Canada-based Omega Paw, even have in-house teams of people that specifically work to help develop private label brands. This includes marketing materials, product development and graphic designer services.
Omega Paw manufactures pet products, and the company offers many different items as private label. Terry Hannaford, Omega Paw’s CEO, says its line of private label edible dog bones is its best performing line at grocery. “We have a patented and proprietary process that allows us to make the best injection molded dog bones in the industry,” says Hannaford. “The ingredient panels, quality, palatability and cost of our products all make Omega Paw the best option for a retailer who is looking at a private brand of edible dog bones.”
PLMA reports that private label unit share in supermarkets for pet care products is substantial, 23.1 percent. “We have designed some of our truly unique dog toys and cat scratchers in a manner that allows us to produce them in a private brand and give the retailer a major point of differentiation from their competition,” adds Hannaford.
Officials for U.S. Nonwovens (USN) agree with Hannaford. They say that the willingness to take product improvement and be differentiated beyond the classics—like creating unique fragrances and providing ingredients that provide consumer solutions—are attributes grocers should be looking for in their nonfoods partners. USN is a large-scale manufacturer of consumer goods including laundry and cleaning supplies, personal care and more, that offers private label solutions for multiple retailers as well as its own national brands.
In 2016, the Brentwood, N.Y.-based company acquired a candle company and liquid laundry company, expanding its portfolio to cover 14 categories. Both of these products are now available through USN as private label options. Unit sales of candles are up 4 percent over last year, according to the PLMA Yearbook. The category also accounts for the second largest dollar gain in private label products sold in supermarkets.
Understanding what benefits consumers are looking for is key to the development of unique and desirable private label products, observers add. One of the trends that consumers are currently focused on is finding clean products that they deem safe for themselves and their families to use, says a spokesperson from USN.
The trend towards cleaner products extends to the wet wipes category as well, according to Greg Fries, vice president of marketing for Guy & O’Neill, a provider of wipes. “Wet wipes are growing and the trend continues to be toward wipes with cleaner formulations,” says Fries. The products provided by the Fredonia, Wis.-based company include disinfecting wipes, automotive wipes, make-up remover wipes, personal lubricant and other adult care products.
New from the company is a personal lubricant unlike what is currently on the market, Fries says. Offered under a private label option, the lubricant is the first approved by the FDA with the claim “made with 99 percent all natural ingredients,’” says Fries. He adds that the lubricant is preservative-, paraben- and sugar-free.
WANT BREAKING NEWS AT YOUR FINGERTIPS?
Get today’s need-to-know grocery industry intelligence. Sign up to receive texts from Winsight Grocery Business.