Report: Closing price gap contributing to PL share decline
CHICAGO — Private-label share is slipping across several key drug store categories, according to SymphonyIRI Group’s latest Times & Trends report, “Private Label: Brand Positioning in the New World Order,” published Wednesday.
Within the drug channel, private-label share of sales fell sharply during the past year. Some of these declines occurred in health-related categories and the beauty department, both noteworthy because they occurred in departments that are generally strongholds for drug retailers, according to the SymphonyIRI Group report.
“Both manufacturers and retailers know that private label is not a panacea,” stated Susan Viamari, editor of Times & Trends for SymphonyIRI. “Private-label products remain, on average, 29% lower priced than national brands. Remove that price advantage and dollar and unit sales could plummet," she said. "In fact, the shrinking private-label price gap very likely contributed to some of the private-label share losses experienced during the past year."
“At nearly 23% of [consumer packaged goods] unit sales across retail channels today, private-label products certainly have momentum and command a sizeable share of consumers’ CPG spending,” stated John McIndoe, SVP marketing of SymphonyIRI. “However, this momentum is not demonstrated equally across channels, retailers, departments or categories. This means there is room for private-label and national brand manufacturers to capitalize on opportunities."
Despite some of the share loss in the drug channel, private label has an above-average and growing presence in 30 of the top 100 CPG categories. The most sizeable private-label share increase came in the refrigerated salad/coleslaw category, which has jumped more than 20 points during the past three years.
National brands are entrenched in 22% of the top 100 CPG categories. Cat/dog litter, diapers, cat food, eye/contact lens care and single-serve dinners are categories where national brands hold above average share of spending and are successfully winning even more share. In six of the top 100 CPG categories, private-label share is above average, but national brands are winning share of spending.
SymphonyIRI is offering a free webinar, titled “Private Label: Brand Position in the New World Order,” at 3 p.m. Eastern time on Oct 13. To register for the webinar, hosted by Susan Viamari, editor of Times & Trends, click here.
Hershey inks warehouse, distribution alliance with Ferrero
HERSHEY, Pa. — Hershey and Ferrero have formed a joint warehousing, transportation and distribution initiative in North America.
The two companies will work together to maximize corporate social responsibility efforts and expect to reduce carbon dioxide emissions and energy consumption in warehousing and freight, with fewer vehicle trips needed to move products to customers.
Productivity improvements from this initiative are expected to be seen in 2012. This alliance does not encompass manufacturing, selling or marketing activities, Hershey and Ferrero noted.
“Ferrero is a respected international company with a portfolio of successful brands including Tic Tac mints, Ferrero Rocher chocolates and Nutella hazelnut spread. Collaborative supply chain operations are a growing trend across industries as companies seek to fully leverage their logistics infrastructure,” Hershey president and CEO John Bilbrey. “Although we are initially focusing on one region of our business, we are excited about the full potential of this project.”
CodeBlue functional beverage introduced to specialty health retailers
NEW YORK — CodeBlue was unveiled last week at Natural Products Expo East in Baltimore as the company behind CodeBlue transitioned the brand from the club circuit to the specialty health channel.
According to the company, the all-natural beverage has the electrolyte replenishment of a sports drink, as well as the antioxidants and vitamins found in enhanced water. CodeBlue is derived from fruit extracts, naturally sweetened and available in four flavored varieties — blueberry pomegranate, strawberry melon, peach mandarin and meyer lemon.
"Between working, everyday stress and fitness regimens, we found there was nothing on the shelves that encouraged proper hydration and recovery," CodeBlue cofounder Steven Frumin said. "In 2008, we created CodeBlue, working with a team of scientists and testing hundreds of different formulas. Listening to the needs and feedback of consumers and retailers in New York and New England, CodeBlue evolved into a cross-functional beverage complete with optimal nutrient levels while promoting great taste. It surpasses single function performance or hydration drinks and our own expectations."
The first generation of CodeBlue was developed in 2008 by friends who attended college in Boston. Priming for national distribution, the company recently hired Eric Schnell as managing partner.