Bottling your brand: what you need to know

When marketers speak of market share, they often refer to “share of wallet” as a means of measuring success. In the food industry, it’s about capturing a share of the wallet and the stomach.

When marketers speak of market share, they often refer to “share of
wallet” as a means of measuring success. In the food industry, it’s
about capturing a share of the wallet and the stomach.

Dom’s Downtown in St. Catharines, Ont., successfully bottled their brand with signature sauces and dressings. (Photo courtesy Michelle Brisebois)

After all,
people can only eat so many times per day and there are only so many
opportunities in any given week to get them to eat your food. How many
of those meals are consumed in a restaurant and how many are eaten at
home? The grocery stores have been veering into the foodservice lane
for years with their roast chickens and deli selections. Maybe it’s
time food service took a page from the grocery store playbook. The next
time a customer asks if you sell your sauces, seasonings or dressings
to use at home, consider the opportunities in saying yes.

The house brand revolution began in Europe and Canada, where retail
chains were not as fragmented as in the U.S. Boots, a leading retail
chain in the U.K. with revenues of $6 billion EU, began to emphasize
store brands in the early 1970s. Loblaws took its President’s Choice
line of private label products to new heights in the 1980s and ’90s
with innovative R&D and smart marketing strategies. Many trend
watchers cite this era as the turning point for private label’s brand
status. Private label products were no longer simply a value play – now
they had legs. Flash forward to 2009 and a recession. Private label
brands really hit their stride as consumers demanded more bang for
their buck.

Some of these house brands may have developed fans for life. A poll
conducted in the summer of 2009 by GfK Custom Research North America
for the Private Label Manufacturers Association reported that 91 per
cent of shoppers said they will keep buying store brand products after
the recession ends. Conversely, only eight per cent of the consumers
polled said that they will stop buying these products. The quality of
store brand products is a big factor in convincing shoppers to keep
buying them. The GfK poll also found that nine of every 10 shoppers
agreed that the store brand products they buy are just as good as, or
better than, national brand products. This positive experience makes
shoppers eager for an even greater assortment of store brand products
to choose from. Nearly half of consumers polled said they wanted their
supermarket to carry a greater assortment of private label products.

Private label represented 27 per cent of all new U.S. food product
launches in 2009 versus only 13 per cent in 2005, according to the
market research firm Mintel as reported midway through the year. The
newest private label foods attract shoppers with premium ingredients,
portability and health benefits.

“Not only have private label introductions increased, but product
innovation is reaching unprecedented highs,” states Krista Faron,
senior analyst at Mintel. “Retailers no longer only launch ‘me-too’
products to compete against major national brands. Instead, private
label lines are hotbeds of creativity, driving markets and establishing
themselves as trend leaders.”

Some of the products those consumers are clamouring for have some
strong restaurant brand names attached to them as the lines between
food service and grocery continue to blur. Lick’s, Starbucks and The
Keg are great examples of restaurant brands making the leap from
restaurant table to home cooked meal. For many of these chains, it’s a
natural extension of their brand premise.

“The Keg is a strong brand with 90 per cent awareness. We see these
private label products as a perpetuation of the brand. The consumer is
comfortable with The Keg. They trust and like us, so it makes sense to
extend the brand to another venue,” says Stu Funnell, who is chief
operating officer of Keg Brands Inc. through the management company
Dewnorth Inc.

The Keg’s private label products are not sold in their restaurants,
only in grocery stores. The Keg highlights its house brands on the
website and may occasionally promote the line on its menus with a call
to action prompting customers to enjoy The Keg experience at home.

“The private label products we sell through grocery support our
restaurant experience nicely. The grocery experience doesn’t compete
with the restaurant visit, it complements it,” points out Funnell. “The
consumer has a great steak at home with some Keg steak spice and is
reminded of The Keg in a positive way.”

For people using The Keg products at home, chances are The Keg will be
top of mind the next time a special occasion calls for a visit to a
restaurant. But what if shelf space in a grocery store isn’t in the
cards? What house brand opportunities exist for smaller businesses?
Dom’s Downtown in St. Catharines, Ont., explored the private label
option with their signature pasta sauces and salad dressings.

“People started asking for our pasta sauces and salad dressings years
ago,” shares Heather Fasulo of Dom’s Dowtown. Dom’s secret salad
dressing is legendary in the Niagara region and many family dinner
tables include salads topped with Dom’s dressing as well as a variety
of its pasta sauces.

“We have the jars labelled with our brand and signage to promote the
products displayed at the cash. When they use our products at home to
make their own meals, they think of us,” shares Fasulo. The salad
dressing was dispensed into a clean, empty wine bottle for the consumer
to take home initially but is now sold in one litre glass jars that
customers can bring back to be refilled when empty. Dom’s also sells
its pizza dough in a par-baked format for consumers to take home and
top.

“We did the par-baked crust to ensure the quality of the end product,”
says Fasulo. “The dough is just too touchy for most consumers to handle
properly.”

Dom’s does list the ingredients for its house brands but hasn’t listed
nutritional information such as calories yet. Since the products are
made and packaged on site, they don’t have to include nutritional
analysis on the label. According to the Canadian Food Inspection
website (www.inspection.gc.ca), “Foods requiring nutritional labelling
include specialty prepackaged foods sold by restaurants for customers
to take home such as house barbecue sauces or salad dressings unless
prepared and packaged on site.”

If a restaurant wants to sell its own brands through another retail
outlet to be used as ingredients or have the products made elsewhere,
it will need to invest in nutritional analysis and approved labelling
of ingredients and nutritional content. “We have worked with a company
to develop nutritional listings,” says Fasulo. Beyond awareness and
brand extension, a house brand can offer a business one of the most
effective ways of hedging its bets…diversification.

“Having our own line of products has definitely helped during the
recession. We make the sauce ahead when the kitchen is quieter. It’s a
great way to increase the cheque average.”

It also captures a piece of that home dining experience extending the
reach outside of the restaurant and the therefore expanding the market.

“The Keg products have provided a means of diversification,” says
Funnell. “However, each brand must always relate back to the core
business and have a reason for existing. The line must mirror what The
Keg brand is all about.”

For some businesses, not being able to control the whole culinary
experience could give them a reason to balk at releasing their branded
products for consumers to use themselves. When asked if there are any
concerns that consumers may take a Keg-branded steak seasoning and use
it on an inferior cut of meat, The Keg emphasizes the upside.

“If the spice is used on a lower grade of meat it’ll probably make it
taste better,” chuckles Funnell. Rather than worrying that the
consumer’s poor culinary skills will dilute your brand, consider how
your wonderful products will elevate their efforts.

When asked which piece of advice they would give to another business
thinking of launching its own house brand, both Funnell and Fasulo cite
integrity as a key ingredient in achieving success.

“Stay true to your core brand and business” advises Funnell.

“Have a passion for the products you launch as house brands,” counsels Fasulo.

After all, from your “house” to theirs – being invited into the homes
and onto the tables of your customers – is quite a compliment indeed.

Michelle Brisebois is a freelance writer and marketing professional
with experience in the food, pharmaceutical, financial services and
wine industries. She specializes in retail brand strategies.