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PL Buyer: Fresh Approach

January 14, 2009

By Kathie Canning

Through a special arrangement, what follows is an excerpt of a current article from Private Label Buyer, presented here for discussion.

Ideas for new private label products at The Fresh Market come from several key areas, including internal and external data analyses to identify opportunities, customer requests, store manager feedback and even successful existing programs (for line extension contenders). And The Fresh Market, the Greensboro, North Carolina-based grocery that now has 86 stores in 18 states, is always on the lookout for new and unique items and flavors - a fact that meshes well with its reputation as an "out-of-the-ordinary food destination store" for people who really enjoy cooking and eating good foods.

No matter what niche the company is targeting, it relies on a very detailed new product development process, noted Jennifer Oas, private label manager.

"We put a tremendous amount of time into product specifications and profile selection and strive for the right flavor profile on every item we develop," she said.

To locate manufacturers up to the task, The Fresh Market approaches some suppliers directly, but also relies on its partner, Daymon Worldwide. The Fresh Market team also likes to visit the manufacturing facilities and meet suppliers' quality assurance and product development teams face to face whenever possible. Once the team agrees on a supplier and a product's final specifications, the company begins the label development process.

Ms. Oas pointed to The Fresh Market Jersey Milk line as one success resulting from the team's product development process. Jersey Milk products are richer and creamier than "regular" milk, and Jersey cows naturally produce milk with slightly greater amounts of protein and calcium.

"By using a high-quality milk produced from cows not treated with rBST, and packaging it in glass like the classic 'milkman' bottles from the 1940s, we were able to communicate good nutrition, recyclable and/or reusable bottles, and old-fashioned wholesomeness while remaining price competitive," said Ms. Oas.

Because The Fresh Market's shoppers tend to be food-savvy and well-educated, they also are inclined to be more engaged in - and vocal about - what products they want to see in the stores and under the chain's own label.

For that reason and many others, private label development represents a fun and exciting area at The Fresh Market.

"Our team enjoys the sense of discovery and the quest for new and interesting products, and we are lucky to have partners who feel the same way we do," said Marc Jones, vice president of merchandising, non-perishables. "We wouldn't have the program we have today without partners like Daymon Worldwide and the many manufacturers who have shared the experience of discovering and producing unique and exciting private label products."

Discussion Question: Where do you think the best ideas come for private label development for stores?

Fresh Approach - Private Label Buyer

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Comments:

It is important for any merchant to know the local market and I have seen some great PL programs come from local store marketing. A chain that has multiple units serving a single demographic will do well by bringing in house branded products that cater to the local wants and needs.

I know there may be a stigma attached to it but I wonder if a true private label program for electronics would work. Could you see yourself buying a Great Value plasma TV or a No Name Blu-ray player? Could be a possibility in lower income areas. At this point, any idea is worth a try.

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Doron Levy, President, TheMortgageMachine.ca

The key to PL success is positioning the product as a high performing product with the look, feel and appeal of the best national brands, yet offering a superior price. Of course the PL brand offers a better price differential, but it also ensures that there will be a higher margin to enjoy. The product needs to have a national brand presence close by (i.e. next to it on the shelf) to maximize both its shelf presence as well as its panache to the consumer. Then the PL brand demands attention while offering value. This is the home run for any PL success.

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Kai Clarke, President, Miraclebeam Products, Inc.

The best Private Label ideas come from shoppers--the loyal shoppers at core of the retailers profitability know what they want. They have opinions about what's out there and what they want from their store. On site demonstrations of new products get tremendous feedback when shoppers are interviewed about likes and dislikes. For foodies, cooking classes in-store with retailer products are a good opportunity to talk with consumers.

Benchmarking categories at competitors stores, publications, conferences, colleagues, industry associations, local producers, suppliers – all can lead to PL opportunities. With innovative packaging and thoughtful merchandising, Private Label Programs are a critical part of differentiation strategy.

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Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

I'm convinced that PL suppliers develop the best ideas for new items because they have the biggest stake in their success, and because they employ professionals trained for the job. No disrespect intended, but I'd rather trust this process to someone who does it 24/7 than to someone for whom it's a minor part of their job description. Those familiar with product development by PL suppliers know that they incorporate consumers and retailers in their process, thus including and managing all of the concerned constituencies. (But, I must say I was very impressed with the Guaranteed Double Yolk Eggs program developed by our dairy director at Fleming Foods in Philadelphia in the 80s.)

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

As a loyal Fresh Market shopper who was unaware of their rigorous private label product R&D program, I have always been impressed to see the new products that they feature, and found that they always appear to be high-quality, interesting from a foodie POV, and frequently unique to the Fresh Market stores. I was unaware that they were private label brands, and just they were more obscure brands that were not picked up by larger chains. The interactions that one has as a shopper, with the butchers, the bakers, the fresh produce handlers, and the check-out staff are much more in-depth than at regular grocery stores, and when I get the standard "did you find everything you were looking for?" question at check-out, I actually get interest and follow-up if I say "no." Now that I know that they may be using my feedback as fodder for new products/lines, I may speak up more often!

Eva A. May, President, Español Marketing & Communications, Inc.

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