Wegmans Calls Private Label Food Safety a Critical Issue

Discussion
Nov 18, 2009
Ron Margulis

By Ron Margulis, Managing Director,
RAM Communications

I have long thought
the only thing that could derail the store brand locomotive is a major recall
of a retailer-marketed product. Turns out that some of the leading supermarket
chains in the country have the same belief and are busy working to do something
about it.

Gillian Kelleher, vice
president of food safety and quality assurance at Wegmans, spoke at the 2009
Private Label Manufacturers Association Annual Conference this week, discussing
how the supermarket chain is working with suppliers to ensure consumers receive
only safe food.

If a supplier is making
a product for the Wegmans label, they must either be inspected by company
Quality Assurance Auditors or be certified against one of the Global Food Safety
Initiative (GFSI) endorsed standards. The first shipment of any new Wegmans
brand product is scrutinized by Ms. Kelleher’s
team to make sure it meets product specifications and food safety requirements.
Tests are conducted in the Wegmans lab or by independent laboratories.

Ms.
Kelleher said there are several benefits for the company’s suppliers from the
effort, including increased consistency, improved communications, standardization,
HAACP training and reduced audits. As a result of the focus on food safety
in store brands, Wegmans reports that 37 percent of all store brand products
they carry are certified to the standards set by the GFSI. The company has
the goals of reaching 50 percent by the end of the year and ultimately reaching
100 percent of all suppliers. The retailer also explained the food safety program
is being expanded to include the company’s culinary innovation center and bakeshop.

Future
plans for Wegmans include extending food safety training throughout the supply
chain.

Discussion
Question: How would a major private label recall impact the growth of
store brands? Do you think its worth it for retailers to “go the extra mile”
with food safety requirements from a competitive standpoint?

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10 Comments on "Wegmans Calls Private Label Food Safety a Critical Issue"


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Steve Montgomery
Guest
11 years 5 months ago

A recall of a private label is not likely to be perceived by the consumer as impacting all similar private label items. I would anticipate the press will learn what other private label items were being manufactured in that plant or by the recalling company. They would likely suffer a decline in sales through “guilt by association.”

However, other retailers would likely point out their safety standards are higher, better, etc. Some would probably state that our products are made by X (insert major CPG name here) and subject to the same safety standards.

Consumers purchase PL products for a variety of reasons, including value. That need is not going to go away and unless the recall was due to a major issue, I would anticipate other PL products would recover any sales lost.

Doron Levy
Guest
Doron Levy
11 years 5 months ago
Most private label brands come with unconditional guarantees so as a consumer, my first thinking is that these products are all vigorously tested and inspected. Granted that’s not what the guarantee means but for customers it has the appearance of a safety net. I also believe that customers are looking at the Made in XXXX label and if they are seeing China, they are scrutinizing the product. I see a huge opportunity for PL labeling with this issue. Perhaps a governing body could come along and monitor and police food safety specific to the private label industry. Seals of approval go a long way to convince the customer to pick something up and put it in their cart (even if they never heard of the seal granter). Grocers like Wegmans, Loblaws and Safeway have invested way too much time and money in their house-brand program to let it slip away because of some recall. I agree and think that food safety is equally important for all consumables but private label should take extra care when… Read more »
Warren Thayer
Guest
11 years 5 months ago

I believe in going the extra mile, for all the right reasons, but I also don’t think a major PL recall will derail private label. We’ve already had major recalls, of both PL and branded items, for serious problems. Thankfully, they’re rare. There may be a brief pullback by shoppers from the recalled national brand or private label, but it always blows over, unless it’s a consistent problem, in which case the brand isn’t long for this world anyway. Private label is way, way too strong to be pushed off track by a recall or two or three.

W. Frank Dell II
Guest
11 years 5 months ago

Any recall hurts a brand. The consumer trusts the brand less. With Private Label this trust reduction carries across a wide range of items, not just the one recalled. Retailers must manage the total marketing job, not just product creation. This means that unless there is strict quality control and testing, the risk increases to hurt more than the recalled items. Testing must be performed on every batch–not just the first one.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 5 months ago

Quality and safe products are a major concern for any manufacturers. I can’t imagine a retailer cutting quality control to save a few pennies. Retailers have a huge opportunity with Private Label. I am confident they will stay focused on quality and safety.

Unfortunately, it is hard to believe that there will not be a recall on a Private Label brand in the next 5 years. How that retailer deals with the recall will determine what impact it will have on their store–and Private Label–as well as other retailers’ Private Label brands.

Joel Warady
Guest
Joel Warady
11 years 5 months ago

Wegmans is right to worry, but the fact is, most retail PL buyers focus solely on cost of the product, and don’t worry about the quality until there is a problem. Can a recall cause damage to the corporate brand? Of course! The first recall that occurs will cause the consumer to question the quality standards of ALL products that carry the retail brand name.

It is not unusual in the UK and Europe for the retailers to send their own quality people into manufacturer’s production plants to perform an audit. This is almost unheard of in the US. Why? Because there is a huge expense to send someone to China, or India, or Vietnam to inspect multiple factories. But at some point, this relaxed approach to quality will come back to bite the US retailers, and they will have a huge image problem on their hands.

The retailers need to change their procedures if they want to truly protect their brand.

J. Peter Deeb
Guest
11 years 5 months ago

A store brand’s recall could have major impact on one or more retailers or categories depending on the breadth of the recall and the category involved. If a recall is limited to one retailer and a small number of SKUs, then the damage will be minimal. However, if a major supplier has a problem across many retailers, the damage will potentially have more impact. The consumer wants to believe in the quality of store brands but a recall will have many of the loyals thinking about the safety issue and will make the brand loyals reluctant to trust the store brand.

When a national brand has a problem, there are other branded alternatives. When a store brand has a problem, it impacts not just the items but the integrity of the retailer.

Paula Rosenblum
Guest
11 years 5 months ago

Customers aren’t so dumb. They know that everything is made by someone else.

If we look back on the pet food melamine debacle, the impact on private label AND brand pet food (including “serious” brands like IAMS) made it abundantly clear that production is outsourced. Ditto with the peanut fiasco last year.

So, is there a likelihood of a recall? Absolutely. Will it damage the brand? Not so much.

Anne Bieler
Guest
Anne Bieler
11 years 5 months ago

There is every reason to be concerned about food safety with Private Label products. As retailers are creating brand status for their private brand lines, it reflects the trust that consumers place the their hands.

If a recall is handled quickly, with transparency and accountability the damage can be minimized. But…shoppers have choices where to place their shopping dollars and the health of their family. There are many places to shop, and other brands are working very hard to enhance the value proposition. There is a tipping point at which consumers will switch, and product safety would be a major consideration.

Liz Crawford
Guest
11 years 5 months ago

On the flip side of recalls, there is an opportunity for retailers to create assurances of Private Label safety and quality. This goes to a kind of Whole Foods 360 Brand position. Nevertheless, even non-organic shoppers are interested in food safety.

Wegmans is moving in the right direction.

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