Private label makes branding tougher

CHICAGO – Produce companies already know how difficult and expensive it can be to create and maintain a consumer brand.

There are only a handful in the produce industry that resonate with consumers like so many do in the consumer packaged goods space.

What’s talked about less is how hard produce marketers must work to convince their retail customers to support – or at least not hurt – their brands.

In the opening outlook panel at United Fresh’s annual convention June 10, Rich Gonzales, vice president of global sourcing for Walmart, BB #:143789 revealed some of the retail giant’s thinking on branding.

“There are places where branding matters and where it doesn’t, and there aren’t very many brands in produce,” he said.

Greg Foran, president and CEO of Walmart US, said in the company’s Q1 earnings report that private label business has been strong, especially in food, as quality improves. This is one way for Walmart to compete more strongly on price against discounters like Aldi and Lidl.

Many of Walmart’s competitors have been looking to private label more, whether it’s Kroger, who is pushing it more now or Costco, who has always emphasized its store brand.

Consumers increasingly trust the store brands from stores they already visit, as a recent study found 85 percent of consumers say they trust a private brand as must as a national brand.

That leaves produce companies in a tough spot. Produce brands need to be able to stand out among their commodity competition, and if they can’t, heavy investment in their brand may not be worth it.

A produce company certainly has to make sure its brand tells a clear story.

Another session at United Fresh focused on how produce companies should brand themselves and when they need to change.

One main lesson is that if you’re spending more time explaining who you are than what you do, you might need a brand refresh.

Consumers increasingly want to know more about their food, and a low-cost investment produce marketers can make is to have information about their products on their websites up to date, so when consumers seek more from your company, they will find it.

Greg Johnson is Director of Media Development for Blue Book Services