CHICAGO — Attendance was up at the annual Private Label Manufacturers Association show Nov. 12-14 in Chicago, and the group’s president said perimeter-store departments are a big reason why.
Nearly 1,500 exhibitors presented at 2,864 booths at PLMA 2017, up more than 5 percent from the year before. And thanks largely to boosts in retailer and wholesaler registrations, attendance at the show rose 4.3 percent over 2016.
The ascendance of perimeter-store was evident everywhere Brian Sharoff, PLMA’s president, looked at this year’s show.
“The transition from shelf-stable center-store to deli, bakery, dairy — all of the fresh, ready-to-eat, ready-to-serve foods — is virtually complete,” Sharoff says. “The perimeter is where the action is, and it’s defined by what consumers, not retailers, want.”
Exhibitors at the show who supply instore deli and bakery departments couldn’t agree more. Retailers’ reliance on private label is definitely on the rise, says JoAnne LaBounty, president and CEO of Spartanburg, South Carolina-based Spartanburg Meat Processing Co. “Studies show that consumers tend to feel private-label is a better buy,” LaBounty says.
Spartanburg is known not only for its branded product, like the new TGI Fridays rib packs it was showcasing at PLMA, but also for store-label products for retailers like Safeway and Winn-Dixie. At PLMA, the company displayed Kentucky Bourbon Rib product it packs for Winn-Dixie and its line of ribs packed under Safeway’s Signature Select label.
At PLMA, Elizabeth, New Jersey-based Atalanta highlighted several products it markets in both branded and private-label formats, including new goat cheese and hummus products.
Industry growth in private label is “tremendous,” says Marissa DeMaio, Atalanta’s director of retail marketing. Private label gives retailers the chance to market similar products on several different tiers, from budget to premium, DeMaio says. In today’s hyper-competitive environment, private label is a category where grocers can differentiate themselves and, if they do it well, generate higher margins.
“Retailers today are struggling, which is why private label is thriving,” she says. One strategy that has proven successful for both Atalanta and its retail partners, DeMaio says, is to offer private-label for, say, the top two sellers in a certain product line. In exchange for that, retailers will often provide premium slotting space for other, branded, product from Atalanta, she says.
Private label has picked up its game in recent years, says Paul Infranco, president of Bridgeton, New Jersey-based Buona Vita Inc., which introduced four new heat-and-eat meals at PLMA, all of which can ship under retailers’ own labels. “The quality of private label has gotten better, and consumers are starting to notice,” he says.
Buona Vita’s new roster of 32 oz refrigerated products sold in supermarket delis includes meatballs, Swedish meatballs, meatloaf and sausage with onions and peppers. Infranco said the items could be in instore delis by the first quarter of 2018.
John Pair, director of national accounts — East in the Florence, Kentucky office of Green Bay, Wisconsin-based American Foods Group, agrees with Infranco that higher quality has led more retailers to utilize store brands. There’s also a strong economic incentive. “The quality is more competitive with national brands, and it’s a value proposition,” Pair says. “In most cases private label brings good margins. That’s why demand is up and there’s a higher level of commitment from retailers. They want a higher percentage of sales to be private label.”
At PLMA, American Foods Group highlighted its 22 oz heat-and-eat meatloaf, turkey meatloaf, Salisbury steak, pot roast, country fried steak and meatball products.
South St. Paul, Minnesota-based National Choice Bakery co-packs with many top baked goods brands targeting instore bakery sales, says Gerri Krenner, the company’s sales manager. Private label, she says, has room for big growth, with success often hinging on how well retailers merchandise it.
While she can’t name names when it comes to private label success stories, she says there are many. One in particular comes to mind. “One of our big customers, their private label sales exceeded the sales of the brand (name product in the same category).”
Telford, Pennsylvania-based Godshall’s Quality Meats Inc., a specialist in premium meats and turkey products, supplies private-label turkey bacon to about 40 of the top 50 U.S. grocers, in addition to instore deli products, Brandon Hill, the company’s Western regional sales manager, said from the PLMA show floor. “Private label goes up every year,” Hill says. “We don’t miss this show.”
There’s a big difference, he says, from where private label was a decade ago and where it is now. “It was bottom of the barrel. Now there’s a real commitment to quality, more’s been put behind it, and it really means something” to call a product private label, he says.