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Sunday, August 1, 2004

No more stepchild, private labels evolve



By Frank Bilovsky
Gannett News Service

Ann Page and Jane Parker were the ladylike private-label brand names of the Great Atlantic and Pacific Tea Co. when that behemoth dominated the national supermarket industry after World War II.

Ann Page canned applesauce and Jane Parker powdered doughnuts were of good enough quality. But the marketing force behind them was price: They sold for a penny or two less than the national brands, and A&P pushed them hard as value alternatives.

Fast-forward more than half a century.

Private-label brands have evolved from emphasizing price to emphasizing quality, said John LiDestri, who owns LiDestri Foods, a 300,000-square-foot processing and packing plant that is one of the largest processors of tomato-based sauces in the country.

The roster includes its own Francesco Rinaldi label, contracts with brands such as Newman's Own and dozens of private-label products for supermarket chains.

"It used to be more value brands," LiDestri said. "That has changed dramatically. It's about 20 percent of total sales and it used to be as little as 10 percent a few short years ago."

Sales are even stronger overseas, says a study by the Private Label Manufacturers Association. Private-label products account for 22 percent of supermarket sales in Europe and 42 percent in the United Kingdom.

U.S. stores "are putting in top, top quality - and actually at times premium quality - so they not only emulate the (national) brands but in many cases try to do something better than the brands in terms of quality," added LiDestri.

Kitty Husband of Greece, N.Y., admits that there are some private-label products she will not buy.

"It's more habit than taste," she said. "I get used to something and I don't want to change. But I have noticed that the quality (of private-label foods) has improved over the years."

Christine Overby, senior analyst with Forrester Research in Boston, echoed Husband's thoughts.

"We have seen a real increase in quality," she said. "And it's not just the quality of the product itself. It's the quality of the packaging and the merchandising on the shelves. Retailers like Wal-Mart will feature private-label products right against the products you know and love."




SPECIAL REPORT: GROCERY WARS
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OTHER BUSINESS HEADLINES
Look Who's Talking: Rich Kiley
Before you pimp your ride, ensure plus-size wheels fit
Eckberg: Family-owned firms show us how it's done
Deluxe stuff can be had at bargain price
No more stepchild, private labels evolve
Business notebook
Business notes



 

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