Private label protecting its turf: still boasting strong sales, private-label meat and poultry products build their own brand equity.

It's a jungle out there when it comes to competing for shelf space and consumer dollars. But if branded meat and poultry products are considered the predators trying to secure new territory, then the private-label market is the pack leader protecting its turf.

Animal kingdom references aside, it is true that while major meat and poultry processors are making a name for themselves with their own brands, store brands of meat and poultry products are changing with the marketplace. Indeed, the private-label business is growing from several angles--as traditional suppliers like Mountaire Farms or Farm Boy Inc. continue their custom private-label programs, major players like Tyson Foods, Hormel Foods Corp, ConAgra Foods, and John Morrell are working both sides of the case, continuiug to promote their own brands and capitalize on store-brand opportunities.

The trend of competition spurring innovation has not gone unnoticed.

"Retailers are merchandising more 'premium' store brands. And more money is devoted to marketing store brands today," observes Mary Kay O'Connor, director of education for the International Dairy-Dell-Bakery Association (IDDBA), Madison, WI, which recently published a "Battle of the Brands" report.

Companies that supply meat and poultry items to supermarket chains, independents, club stores, and other venues agree that as competition heats up, products invariably improve.

"We've been in the private-label business over fifteen years. It started out [as] price, price, price, but our first concern is quality," notes Mark Howell, president of Crider Corp., a Stillmore, GA, supplier of private-label canned poultry--and soon, refrigerated and frozen poultry. "That is the big dynamic--consumers are paying more attention to quality, and the retailers are demanding it."

Tony Buono, vice president of marketing and sales for branded and private-label sausage maker Premio Foods, Hawthorne, NJ, agrees that value and quality are intertwined.

"In order for a private label to be successful in today's business environment, it must be equal to or better than brand ed. This carries across most private-label categories," he says.

By the numbers

Recent statistics bear out the fact that far from being nudged aside, private-label products are doing well. Total private-label sales have now reached $41.9 billion, a 2.4 percent increase over last year, relays the 2003 Private-Label Handbook published by the New York-based Private Label Manufacturers Association (PLMA).

In PLMA's designated dell category, refrigerated meat and poultry products led the pack with a 30.1 percent dollar share, followed by luncheon meats at 14.5 percent, meat pies at 14.5 percent, refrigerated seafood at 14.5 percent, breakfast meats at 14.4 percent, dinner sausage at 7.5 percent, frankfurters at 6.0 percent, and refrigerated lunches at 0.9 percent, in addition to minor percentages for pasta and pizza.

PLMA also recently surveyed consumers about their attitudes toward private-label products. Conducted by The Gallup Organization, the poll found that 54 percent of consumers "frequently" or "regularly" purchase store-brand products at the supermarket. Seven out of 10 shoppers interviewed agree that the quality of store brands is "better" or "the same" as national brands.

Another study, "Building Shopper Loyalty with Store Brands" published by the Washington-based Food Marketing Institute (FMI), found store-brand shoppers care about more than simply price. As the report states: "They are as or more demanding than other shoppers regarding good selection, high-quality products, convenient location, good customer service, and especially the availability of trusted store brands."

The FMI study also indicates there is evidence that store-brand shoppers are shifting demographically from "lower-income" households to more affluent households.

Premium vs. value-driven commodity

For decades, private-label meat and poultry products were rather unceremoniously marketed. Today, however, the growth of case-ready products has allowed retailers to focus more on merchandising than cutting and wrapping them in the back room. The same is often true at the dell counter, with an increasing amount of pre-sliced portions and the expansion of grab-and-go displays.

Based on IDDBA's recent brand study, 87 percent of dell retailers now carry premium store brands.

"Consumers most often think 'brand' means better quality and taste, so another new opportunity for private-label meats may be to sample and provide product literature to educate consumers about the quality of the store brand," suggests O'Connor.

Packaging has contributed greatly to the new upscale look of store-branded fresh, frozen, canned, and dell meats. Eye-catching graphics and convenience-oriented packages represent some of the biggest changes in store brand SKUs.

"We have moved from a generic look to a more appealing package with product usage shots, recipes, and usage directions," reports Buono.

Vineland, NJ-based Venice Maid Foods, which produces soup, hash, canned meats, stews, and chili, recently overhauled the look of its private-label versions.

"We have re-designed our packages, adding more background and garnishes to bring the label up to 2003 and beyond," says John Kelly, president and chief executive officer. "Packaging nowadays, compared to years ago when there were generic black-and-white labels, has come a long way."

Kelly, too, believes that store brands are starting to boost their equity, especially by creating their own named product lines. "A lot of [retailers] are getting away from the store identity, with brands like Safeway Select, for example," he points out, noting that the Canadian-based President's Choice private-label brand sold through chains like Albertsons was instrumental, as well.

Howell, whose company's canned-poultry products are marketed under the Wal-Mart Great Value name and the Costco Kirkland Signature banner, among others, also has seen branded non-brands, so to speak, expanding.

Finally, the importance of retailer-supplier partnerships and truly customized programs cannot be overstated.

"Retailers have a variety of requests that stem from their knowledge of the category, along with consumer input," says Buono, noting that Premio often makes products to specification for various supermarkets. "Variety is essential."