Will Giant Food’s shelf labels with diversity call-outs drive sales?

Discussion
Photo: Giant Food
Jan 04, 2021
Tom Ryan

Ahold Delhaize USA’s Giant Food chain has become the first U.S. grocer to identify products owned by minority businesses on shelf labels.

The updated labels at the store level as well as online highlight businesses that are women, Black, Asian-Indian, Hispanic, LGBT, Asian-Pacific or veteran-owned. Over 3,100 products across Giant stores will feature the updated shelf labels, representing 218 of the chain’s vendors.

During 2021, Giant will also highlight minority vendors on a new supplier page on GiantFood.com through storytelling and product spotlights.

The updated labels follow the 2017 introduction of the HowGood rating system that offers insights into ingredient sourcing and labor practices as well as the 2018 launch of the Guiding Stars nutrition ratings system.

The diversity transparency also builds on Giant’s supplier diversity efforts. Ira Kress, president of Giant Food, said in a statement, “We’re committed to making it easier for customers to identify product attributes that are important to them by fostering a diverse and inclusive network of suppliers that reflects the unique backgrounds and experiences of our Giant family, our customers and our communities.”

Many retailers have long focused investments in minority-owned businesses. In 2005, for example, Walmart established a $25 million private equity fund to directly issue equity investments in women and minority-owned business enterprises.

Diversity efforts across corporate America, however, have been amplified since the killing of George Floyd in Minneapolis while in police custody last year and the racial justice protests that followed. Retailers have made commitments to minority hiring, antiracism training and supplier diversity. Recently, Meijer introduced its first-ever Supplier Diversity Summit and Schnuck Markets launched a new supplier diversity program.

Macy’s, Sephora, West Elm and Madewell are among the retailers that have signed the “15 Percent Pledge” to commit 15 percent of their shelf space to Black-owned businesses.

Few studies appear to have been done on consumers’ propensity to support minority-owned businesses. Accenture’s “14th Annual Holiday Shopping Survey” found two in five planned to support and shop with minority-owned businesses. A similar proportion indicated they would shop with retailers that support the Black Lives Matter movement.

DISCUSSION QUESTIONS: Do you see many benefits to calling out products made by minority-owned businesses on shelf labels? Is it a sales opportunity, a CSR (corporate social responsibility) benefit, both or neither?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I believe that while the labels may induce a round of trial, repeat is still about meeting or exceeding consumer expectations."
"Rather than pose the question: “Will it drive sales?” I’d prefer to ask, “Will it enhance shopper loyalty and trust?”"
"Gen Z and Millennials want to work with companies that have CSR initiatives so it can make Giant an employer of choice."

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21 Comments on "Will Giant Food’s shelf labels with diversity call-outs drive sales?"


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Dr. Stephen Needel
BrainTrust

I’m sad that this needs to even be considered “a thing.” We should buy products because the product is good or the price is good, not because it’s made by a minority-owned business (which does not mean it was made by minorities, just that the owners identify that way). If the manufacturer thinks ownership is a purchase driver, let the owner emphasize that on the package. Not the store.

Jeff Weidauer
BrainTrust

This is a minimal-risk PR move by Giant that won’t have much impact on sales. For shoppers who are interested it’s a positive move. The question is what else is Giant doing to support minority-owned businesses?

Neil Saunders
BrainTrust

It is good to provide the customer with information about brands and products. However most shoppers choose based on factors such as price, taste, quality, and so forth. So, for many, this information will probably be ignored or overlooked.

Shelley E. Kohan
BrainTrust

The retail industry should foster opportunities that support minority-owned businesses or any small businesses for that matter. From a consumer perspective, as Gen Z and Millennials’ buying power grows, their purchasing decisions are value-based and they are seeking to do business with companies that demonstrate CSR and provide equity to all brands. Highlighting brands that are minority-owned is a great way to demonstrate that Giant is paying attention to DEI (diversity-equity-inclusion) initiatives. From an employer perspective, it is a great way to demonstrate to the workers actions around DEI. Gen Z and Millennials want to work with companies that have CSR initiatives so it can make Giant an employer of choice. For big companies like Ahold Delhaize, paying it forward to support smaller businesses and provide equitable opportunities to all vendors is a positive for the industry.

Georganne Bender
BrainTrust

I like this idea and I think consumers will, too. The labels point out interesting and new product, backed up by why its story and why the product is unique. I can see all sorts of opportunities to promote these items in-store with tastings and demos. And I would couple the ingredients with the brands we have known forever to create new recipes.

Cathy Hotka
BrainTrust

I’m a Giant customer, and these labels do make an impact. Customers likely don’t look for them, but they can reinforce that feel-good feeling when realizing that the chosen product is veteran-owned. Kudos.

Dave Bruno
BrainTrust

This feels like a small but not insignificant step in the right direction. For shoppers who care about this issue, the shelf labels will help them make informed choices that reflect their values.

Evan Snively
BrainTrust

I wonder if the impact (good, bad, or indifferent) will be equally distributed across the diversity spectrum. I am not familiar with the demographic mix of Giant’s customer base, but I would predict that most customers will be drawn to a few of the labels (i.e. someone who decides it is important to support veteran-owned business), but not necessarily all of them.

Also, this labeling has two primary areas of potential impact in my opinion – 1.) enticing customers to try a new product for the sake of supporting the owner (if the product isn’t good, the customer won’t keep buying it). And 2.) engendering deeper loyalty from customers who already purchased the product and who align with the business owner, but who were unaware of it until the labeling came out. (A third potential outcome is the reverse, where a customer actively disassociates with a product due to the owner’s diversity affiliation — but I think that will be a really small sliver of behavior shift.)

Liz Crawford
BrainTrust

Giant and brands in the respective categories are likely to see some switching behaviors. However the proof is in whether consumers enjoy them as much or more than their previously used products. I believe that while the labels may induce a round of trial, repeat is still about meeting or exceeding consumer expectations.

Steve Montgomery
BrainTrust

For some customers the labels may induce trial but to become a market basket stable the products will have to at least meet consumers’ expectations. It would be interesting to know how many of the 3,100+ items referenced in the article are new and how Giant determined and verified the minority business producing them.

Gene Detroyer
BrainTrust

I am all for supporting minority-owned businesses. And I am sure some shoppers will make decisions based on this.
But it feels like the equivalent of “greenwashing” to me.

Ryan Mathews
BrainTrust

I have similar concerns Gene (see my comments below). It’s not that it’s a bad move in-and-of itself, it’s just that it doesn’t begin to address the root causes these companies are wrestling with, so it seems to do more for Giant than the people they are ostensibly trying to help.

Gary Sankary
BrainTrust

I like the idea. There will be a segment of customers that will make a buying decision based on this label. Will it have a dramatic impact on sales? I doubt it. Will it influence some shoppers to try something new? I believe it will. And when they try it, if the product meets or exceeds their expectations, the brand has a new customer. As others have noted here, this little disruption can only be one step in the process of supporting minority-owned business to help level the playing field. But every step counts and, if this information helps customers make decisions that align with their values, great.

Richard J. George, Ph.D.
BrainTrust

A savvy food retailer’s goal is to create a positive, differential advantage, one that gives customers the permission to drive past other retailers in search of the retailer offering the differential advantage. The Giant Food’s diversity call-outs represents such an opportunity. In addition, the story telling and romancing the brands provide for additional purchase incentives. This program should not be measured in terms of its cannon potential for impacting the whole market. Instead it is an example of a laser beam — focused on the needs of selective target markets.

Ricardo Belmar
BrainTrust

I see this as helping consumers with the discovery of new products in-store, especially if it causes customers to research the products more after trying them out to learn about their backstory. Beyond that, it’s up to the products themselves to meet and exceed customer expectations on quality, taste, and value to determine if they’ll turn into repeat buyers. If the shelf signage points customers back to Giant’s website for more information, then perhaps this will have a long-term impact, otherwise, it may only have a small effect on shoppers.

Ryan Mathews
BrainTrust
First of all I think we need to change our choice of words here. “Minority” implies that the group in question is somehow inferior in numbers or impact. Women are, and always have been the majority gender. And I think it’s high time the industry recognizes Latinx, Black, Asians, South Asians, indigenous peoples, etc. as an emergent majority rather than as a minority. America will become “minority white” in 2045, that’s 24 years from now – clearly within the working life of many RetailWire readers. Next, if companies really want to support “minority” suppliers it should be a holistic effort from providing financial support, business advisory services, merchandising support, etc. In other words, really supporting the company and the entrepreneur, and not just seeking out some kind of “woke” PR merit badge. Over the course of my career I have witnessed almost countless numbers of “minority” companies brutally exploited by supermarket chains in terms of demand for “free” good, slotting allowances, etc. In the most egregious case, a company I was working with was asked… Read more »
Joan Treistman
BrainTrust

Calling out products made by minority-owned businesses can be more than a sales opportunity or a CSR initiative. It influences greater awareness among shoppers about diversity in the marketplace. The last few months have awakened many to the realization that advocating diversity isn’t just about saying you’re not racist. Being antiracist means doing something when you can. It would seem that Giant is doing that with their retail platform. I believe there will be more calling out in various forms as we move towards having a society characterized by inclusion and equality.

Sterling Hawkins
BrainTrust

It’s a good PR move. And it’d be interesting for Giant to share how much it moves the needle for those products and those communities. If they can show it’s actually making a difference … all the better.

James Tenser
BrainTrust

While I’m certain that PR strategy figures in to the recent moves by Giant Food, Schnucks and Meijer to highlight minority-owned suppliers, what really matters here is how shoppers feel about it.

Rather than pose the question: “Will it drive sales?” I’d prefer to ask, “Will it enhance shopper loyalty and trust?”

If the answer to the latter question is “yes” then the new call-outs are a good idea.

John Karolefski
BrainTrust

In theory, this is a noble idea that might spur sales of these labeled products. In practice, however, I see a potential a backlash by insensitive and offended shoppers who will not buy these products because of some misguided principles. Nevertheless, kudos to Giant Food.

Average Person
Guest
1 month 27 days ago

As a consumer I won’t support any business that tries to use race to sell products or services. Anything that is used to promote one race over another is by definition racism. Even if it’s done with the intention to “help” one group of people or another. This is not something we can ignore in our society. Until we can move past actions that pick winners and losers based on race, sex, religion, political ideas etc. we will create resentment, division and hatred for each other. Most people don’t want to be classified or labeled, including businesses. Nobody should be oppressed because of their identity. These types of actions do not create unity in anyway. This will likely create more problems than they solve.

wpDiscuz
Braintrust
"I believe that while the labels may induce a round of trial, repeat is still about meeting or exceeding consumer expectations."
"Rather than pose the question: “Will it drive sales?” I’d prefer to ask, “Will it enhance shopper loyalty and trust?”"
"Gen Z and Millennials want to work with companies that have CSR initiatives so it can make Giant an employer of choice."

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