Private label the Safeway: as its Lucerne brand hits the century mark, Safeway continues to nurture private label by creating a national presence.

Like many of you stationed at leading retailers around the country, the executives at Safeway rebuff the notion that private label is only a lower-priced alternative to national brands. Safeway's in-house labels span the store and penetrate a number of categories, with a private label strategy

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"We're looking to be a premium product where it's the best product offering in the marketplace," says David Nelsen, vice president of dairy manufacturing supply operations for Safeway. "That really extends to all of our products. We aren't looking for 'me toos.'"

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That philosophy holds true for the entire private label program, however, this year the retailer's Lucerne dairy brand is garnering special attention as it marks its 100th birthday. But whether it's Lucerne milk, a new Safeway Select Great Escapes super-premium ice cream flavor or a Select Primo Taglio cheese, the Pleasanton, Calif.-based supermarket giant is into dairy sales and manufacturing in a big way. Safeway offers 879 SKUs with its Lucerne dairy label and more than 1,300 SKUs under the Safeway Select banner, sold at its supermarkets across the country--Safeway, Vons, Dominick's, Randalls, Carr-Gottstein and Genuardi's.

With $35.6 billion in total sales for 2003, Safeway rings up big sales at the registers, and also operates 33 manufacturing facilities in the United States and Canada. Of those, 14 are dairy plants. The company's manufactured dairy product volume is more than 260 million gallons of fluid, 256 million pints of ice cream, 15 million dozen frozen novelties, 40 million pounds of cottage cheese, 34 million pounds of sour cream and 150 million half-pints of yogurt.

"We will continue to develop new products along with innovative new flavors which respond to our consumer needs," says Nelsen. "In addition, we recognize that the dairy category is an absolute necessity to a successful grocery and to provide a competitive advantage for our company."

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Safeway's strategy of marketing its products side by side against national brands has been to offer selections that are unique and innovative--keeping a close eye on changing trends and meeting consumer needs.

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