5 Reasons Why Retail Branding Limits Growth



I am currently in South Africa and spent much of the day yesterday visiting different retail stores. With fresh produce branding, packaging and on-pack communication being a passion of mine, I always love to get out to stores and have a look.

In South Africa, a high percentage of fresh produce is retail branded. Since I was touring with other passionate produce people, this led to some interesting discussion about the pros/cons of retail branded produce.

Never one to be shy in my opinion, in my mind, there are five reasons why I don’t like 100% retail branded produce departments. However, I’d love others to wade into this debate because it is a potent and topical subject.

 

Lisa’s 5 Reasons Why Retail Branding Limits Produce Sales

1.       Retail Branding Goes Against Current Food Trend

For the last 3-5 years, food trend analysts have identified that shoppers want to know more about the origin of their foods.

This is partly driven by trust – they want to know who has produced it and they want to know a bit of story – but it is also driven by the increased focus on food and provenance resulting from cooking shows and a return to cooking at home.

Retail branding, especially when the grower is reduced to a line that says Supplied By in 8 point font at the very bottom of the pack, removes the ‘story’ that consumers want to know more about and distances the shopper from the producer.

2.       Retail Branding Reduces Consumer Driven Innovation

When growers brand their produce, there is a strong incentive and drive to create a point of difference to set their business/product apart from the competition. Innovation costs time, money and resources and the expected payback is the ability to tell the innovation story and drive sales. When all products within a category are retail branded, what’s the incentive for growers to innovate?

Someone once told me that retail branding doesn’t stifle innovation – in fact, it makes growers work harder to innovate because now they must create a product that extends the season, or lasts longer so they make their money based on niche, production opportunities.

My concern is does production innovation translate into consumer driven sales? Low chill stone fruit can extend a season, but it often tastes terrible and puts shoppers off stone fruit for several purchase cycles.

Personally, I would rather see growers rewarded for consumer driven innovation by being able to take credit for the innovation via their own, branded product.

3.       Retail Branding Reduces Grower Pride

I am big on growers being proud of what they do. Call me naïve, but growing food isn’t a normal, 8 to five job. Growing food is a passion for most growers. I’ve yet to meet a grower who wasn’t passionate and committed to growing fresh produce.

So what happens when you take a grower’s brand and story away?

To me, it’s a bit like the analogy of having a baby and calling that baby Clara. For several years, Clara builds up an identity around her name and who she is. Suddenly Clara goes to school and her parents are told, “We don’t allow children to have their own names here. She will be called Mary as all of our children are called Mary.” Suddenly, the identity is gone and you just become one of many.

While growers will put up with being one of many, because there are more growers than there are retailers, I believe it reduces pride and removes the unique identity that makes fresh produce what it is.

4.       Retail Branding Homogenises The Fresh Produce Offer

I want to acknowledge some retailers do retail branding better than others. Some have found ways to make it work successfully where there is good range and good product differentiation. Yet I have equally visited other retailers who execute house branding poorly.

When retail branding is poorly executed, it reduces product / consumer segmentation and homogenises the fresh produce offer. So rather than being able to stock a sweeter strawberry developed by a grower based on their unique soil/climate which could have been packaged and differentiated to drive value growth, the strawberry becomes just another strawberry in a generic retail strawberry pack. This is what I mean by it homogenises the offer.

Again, what food trends tell us is today, consumers want and expect customisation. Customers don’t want one size fits all – they want choice and the ability to determine what fulfils their own needs. I believe retail branding stifles this.

 

5.       Retail Branding Is Often Poorly Executed

Similar to the caveat above, some retailers execute their retail branding very well. Retailers in the UK are the lead examples of this, where they take a tiered approach, create a range of offers and price points and clearly execute the retail brand so this differentiation is known.

Others don’t execute their strategy so well.

What happens when a retail branding strategy is poorly executed is the brand becomes dominate on the pack, reducing the product story and creating a ‘sea of sameness’. So when you look at a retail branded bagged apple display, it all looks the same. No particular variety or varietal benefit stands out. All you can see is the retail brand, over and over and over.

Further adding to this, is most retail brand development departments don’t ‘get produce. So the pack just becomes this perfunctory vessel to hold the product and the only characteristic on the pack is the retail brand and the variety. Neither of these is good for driving incremental, value added sales.

My goal is to not be critical, more to stimulate some debate. Is retail branding good for produce sales? Is it good for growers? Does it drive revenue and value growth because it delivers on the increasing demanding needs of consumers? Or is it all about power and control?

Would love your thoughts….