One of the political arguments during the recent election campaign was that the U.S. should not emulate Europe, with its socialized medicine, high taxes and high unemployment.
But from a business perspective, there is at least one area in which supermarket operators on this side of the Atlantic should strive to be more like their counterparts on the opposite shore: the strength of their private-label programs. Private labels in Europe have much higher brand equity, and food retailers there report sales penetration in the 35%-45% range.
As this week's Private Label Manufacturers Association Show kicks off in Chicago, American supermarkets find themselves in perhaps the best position they have ever been to tout the virtues of their own brands, and perhaps increase their sales penetration closer to the lofty levels enjoyed by European operators. Food retailers in the U.S. have been reporting a strong surge in sales of store brands as the weak economy forces shoppers to curb their spending.
Brian Sharoff, president of PLMA, told SN that supermarkets can capitalize on the trend by appealing to consumers under pressure as one aspect of their private-label strategies.
“In areas hit particularly hard by the economy, they can offer private label as a way of showing that they care about budget issues,” he said in the feature, "Private Label Prevails" (see the link).
Supervalu is among those retailers that have aggressively promoted store brands, and it has seen a surge in private-label interest. In a second-quarter earnings conference call last month, Jeff Noddle, chairman and chief executive officer, said the Minneapolis-based retailer and wholesaler has accelerated its forecast for ramping up private-label penetration.
“Our own-brands program is gaining traction,” he said, noting that private-label sales totaled 16% of total sales in the quarter, up more than a full percentage point over a year ago. He now expects to reach 17% penetration by the end of the current fiscal year, four months ahead of schedule. He remains confident that the company can reach 20%-plus penetration in three years, bolstered by the successful introduction of new lines like Wild Harvest and Culinary Circle.
Although the lower ring for a private-label product compared with a national brand puts pressure on top-line revenues in the short term as consumers trade down, the benefits far outweigh the lower ticket. Retail executives say increased private-label sales translate to better margins per item, increased loyalty and increased leverage with branded suppliers.
Over the last few weeks, SN has reported on several new private-label campaigns, including new promotions at Wegmans and Harris Teeter. In addition, Wal-Mart is preparing a revamp of its Great Value private-label grocery line (as reported in the Nov. 3 issue of SN), and IGA has made improving private label a key element of its strategy.
If there is an upside to the down economy, these retailers have found it. -- Supermarket News
Return to Top of Page
Nestle, the world's biggest food group, said its board was still strong after it lost a second senior executive in two months, Lars Olofsson, who had been touted as a potential chief executive.
Swiss-based Nestle said its Chief Technology Officer Werner Bauer would temporarily take over the functions of the 57-year old Swede Olofsson, who is moving to French food retailing giant Carrefour as its new chief executive.
Olofsson, who is Nestle's executive in charge of strategy for its marketing and sales operations, will leave the company at the end of November after 32 years at the firm which makes Nescafe coffee, KitKat chocolate bars and Maggi soups.
Olofsson's departure comes after former Chief Financial Officer Paul Polman was named as the new chief executive of rival food and consumer products group Unilever Plc/NV in September.
Analysts said it was expected that some executives might leave after last year's race to replace Chief Executive Peter Brabeck. Polman and Nestle's head of America Paul Bulcke led the field to succeed Brabeck but Olofsson name was also mentioned.
Bulcke won the race and replaced Brabeck in April as chief executive while Brabeck continued as chairman.
"It's kind of a surprise to us that Mr Olofsson leaves Nestle after 32 years but on the other hand a new person might be refreshing," said Vontobel analyst Claudia Lenz.
"Furthermore, a good relationship with one of Nestle's key customers Carrefour is also a future asset," she added.
Analyst David Liston at Barclays Wealth said it would not be a major loss for Nestle as the business is very centrally controlled by the chief executive and chief financial officer, while a departure from its fast-growing nutritional business would have been more of a concern.
Nestle's shares were off 0.85 percent at 44.24 Swiss francs at 1105 GMT.
Sarasin's Patrick Hasenboehler said the moves of Olofsson and Polman were likely driven by disappointment at not getting the top job mixed with the opportunity to lead another big firm.
"A pity, but it also shows how strong Nestle's management base is. The move does not change our investment case," he said. "As a defensive share, Nestle remains a solid investment in the current turbulent stock market environment."
A Nestle spokesman said the fact that so many members of the board were mentioned in the media as possible candidates to replace Brabeck showed the strength of the management team.
"It has been shown time and time again that Nestle has a very strong management team and the success of Nestle is not dependent on any one individual but the strength of the team as a whole," he said.
Nestle said Bauer, who already held the role in 2004 and 2005, would take over Olofsson's functions effective immediately until the board of directors decides on a permanent replacement. -- Reuters
Return to Top of Page
TrueNorth is a contemporary brand of 100% natural, great tasting nut snacks. "True North" is also a singular passion in life that can leave a legacy, empower others or simply make the world a more interesting place to live. The TrueNorth brand announced today that it will partner with OSCAR-winning actress Helen Hunt to find the most compelling "True North" story. The program was born out of the desire to celebrate and share the stories of people who are pursuing their dreams.
TrueNorth invites consumers to submit a written essay that describes how they (or someone they know) are pursuing their life's passion, for an opportunity to have their story told in the form of a 60-second commercial aired during the 81st Annual Academy Awards broadcast on Feb. 22, 2009. The contest winner will be selected in early January and the inspirational spot will be directed by OSCAR- winning actress Helen Hunt. Details about the contest, including the official rules, are available now at www.truenorthsnacks.com/story.
"The TrueNorth team found its passion in the process of making ordinary nuts into a new and extraordinary snacking experience," explains Regan Ebert, vice president and general manager, warehouse direct business, Frito-Lay North America. "As we've shared our brand and our story, we found people with passions that are almost cinematic. We want to find people who have found their "True North" and put a spotlight on their powerful stories."
"After ten years, my passion project and 'True North' came to fruition last year with the release of Then She Found Me," explains director of the film, Helen Hunt. "When TrueNorth approached me, I was drawn to this project because it would allow me to play a part in sharing someone's extraordinary story."
"True North" stories submitted between October 20 and December 31, 2008 will be judged for the coveted commercial directed by Helen Hunt, which will air during the Academy Awards broadcast on February 22, 2009. And by encouraging people to share their stories, TrueNorth hopes this invitation will also inspire people to find the passion that drives them to turn the ordinary into the extraordinary.
A native of Los Angeles, Helen Hunt grew up in an artistic environment. Her father, Gordon Hunt, is a director and respected acting coach and her singing teacher is one of Hollywood's finest voice coaches, her grandmother, Dorothy Fries. From her earliest work in community theater, to the New York Broadway stage, to her film and television performances, critics continuously recognize her for her outstanding performances.
Hunt made her acting debut on television in 1973's "Pioneer Woman". Since then, her career has spiraled at a rapid pace, to encompass over 15 movies for television, numerous film appearances, three television series, one OSCAR, four Emmy's, five Golden Globe Awards and a coveted Screen Actors Guild Award among many others. This year, Hunt made her big-screen directorial debut with the release of her passion project Then She Found Me, based on the novel by Elinor Lipman, in which she also stars, co-wrote and co-produced.
TrueNorth is the snack category-exclusive advertiser on this year's Academy Awards broadcast, which entitles the brand to air commercials during the pre-show and awards show, as well as sponsorship acknowledgments during the 81st Annual Academy Awards. One of the sixty-second commercials that will air during the show will feature the extraordinary story of the TrueNorth contest winner.
This commercial will celebrate one extraordinary story, while also kicking off the brand's 2009 advertising campaign, which will highlight real people who have pursued their life's passions. Following the Academy Awards airings, TrueNorth will roll out national television, print and online advertising that feature three inspiring stories discovered during the brand's inaugural year. They include Teddy Gross, who is empowering children with the power of a penny; Gary Greff, who is using the art of sculpture to revive his hometown of Regent, North Dakota; and Majora Carter, who is bringing nature and a green-mindset to the South Bronx.
-- Houston Chronicle/PR Newswire
Return to Top of Page
|
