Building a Private Label Brand
By Anna Wolfe
Working with local producers and gourmet suppliers, retailers of all sizes can create a thriving house brand.
Large retail chains, with their buying power, ample storage and high-volume sales, have long been known for their private label brands – everything from staples such as milk and butter to value-priced frozen vegetables to ethnic-inspired marinades to organic pasta sauces and non-food items.
These days, retailers of all sizes, from the one-shop operator on up, are creating thriving house brands starring specialty food and other gourmet products.
Many gourmet retailers don't have the shelf space (and cash flow) to buy pallets or containers of traditional private label products. But many gourmet retailers find willing private label partners through tapping specialty food producers and local purveyors.
For McGinnis Sisters Special Food Stores in Pittsburgh, private label "has always been a part of what we've been doing," says Jennifer Daurora, business development director. "When we find something we love, we ask, 'Can you do it for us?'"
Known for its perishables and specialty items, McGinnis Sisters opened its doors in 1946 and over the years has expanded to three specialty food stores. Starting with jams and barbecue sauces, the family owned retailer has expanded into more product categories such as pickles, beets and baking mixes.
To drive sales, McGinnis Sisters' sticks with a tried-and-true technique. "We do a lot of sampling. That's our No.1 promo," says Daurora. Products are sampled in aisles. McGinnis Sisters also offers serving suggestions, and the product are always well merchandised. To drive awareness, the store's brand mentioned in the store's newsletter and used in gift baskets. In cooking classes, the products are often used.
The family-owned retailer's private label selection is "growing more and more," says Daurora. "As private label variety has increased and quality has gotten a lot better, we've gotten into more product categories."
Putting the Special in Specialty
Increasing competition from Amazon, Whole Foods Markets, mainstream supermarkets and discounters is one reason for the growing number of Cardullo's-branded products.
Cardullo-Tavilla remembers a time when the store, which opened its doors in 1950, was the destination for specialty food. The Cardullo's brand builds up the retailer's selection of exclusive products.
"No one can say, 'I saw Cardullo's Rainbow Grinders at Christmas Tree Shops,'" explains Cardullo-Tavilla. "With private label, there's no comparison. You're not going to see Cardullo's Ginger Teriyaki Sauce anywhere else."
Nonetheless, Cardullo's branded products account for "a small percentage" of the retailer's SKUs and includes product categories such as bread dippers, sodas, preserves and sauces.
"It is one of those things that everyone is doing," Cardullo-Tavilla says about private label.
Last year, McGinnis Sisters brewed up a new relationship with a local coffee roaster which has been advantageous for both the roaster and the retailer. "Our coffee has become one of our best sellers in our private label line," notes Daurora. "We introduced just over a year ago and our customers love it. We work with a local roaster and have been pleased with the sales of both the bulk and bagged bean coffees.
Through a partnership with Coffee By Design, a Portland, Maine-based roaster, Cardullo's, too, added an exclusive coffee blend to its line.
"There's a big drive to buy local," notes Cardullo-Tavilla. It is sort of forces to buy local. Cardullo's was famous for gourmet food from around the world for the first 55 years. And now, from around the corner."
Working with local and regional vendors is a growing part of Cardullo's business. In fall and winter, Cardullo's carries some of the farmers markets vendors' products in store. One local company makes an exclusive jam for the shop.
"My first order was 24 jars, not a pallet. To her, that was a huge order," says Cardullo-Tavilla.
Because of the products local or specialty roots, customers are willing to spend a little more on the products, observes Cardullo-Tavilla.
Overall, there's a lot of work that goes into creating a private label brand, Cardullo-Tavilla explains, but the challenges are worth it. "There's plenty of trial and error. There's been times when we get a product it is not how it tasted at the food show. There have been times when we've had to cut ties because the products are not up to our standards," she says.
"After all, we're putting our name on it."
570 Lake Cook Rd, Suite 310
Deerfield IL 60015
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