Store Brands Could Change the Game in Retail and CPG Investing, Says CBX Branding Veteran

NEW YORK, Jan. 16, 2020 /PRNewswire/ -- Investors should pay close attention to the potential for store brands to create new winners and losers in retail and CPG, advised Todd Maute, a partner at brand strategy and design agency CBX, during a recent analyst conference organized by Stifel Financial Corp. 

"We're seeing a shift toward truly brand-led strategies, as opposed to merely securing a place along the spectrum of 'good,' 'better' or 'best' relative to competing products at shelf," he told an audience of about 45 analysts during the  panel discussion at The Omni Hotel in New York. "Retailers that fail to grasp the need to fully commit to their store brands risk missing out on an opportunity to drive loyalty to their stores and create meaningful differentiation in the markets they serve."

Investors are rightly focused on understanding how store brands could change the calculus in retail and CPG, Maute noted. "National CPG manufacturers are already facing stiff competition from brands launched by the likes of Costco, Kroger and Target," he said. "Amazon, which is only in its infancy with respect to store brands, could eventually make a major dent as well."

The veteran of private-label branding highlighted the success of The Kroger Co. in driving sales of its Simple Truth, Private Selection, Kroger and HemisFares brands. He also pointed to the nascent efforts of traditional supermarket cooperative Wakefern Food Corp. —known for banners such as ShopRite, Price Rite and The Fresh Grocer—to craft a brand-led strategy.

Last year, Wakefern announced the launch of two new food and household brands, Bowl & Basket and Paperbird, and it reportedly will invest heavily in building support to transform its approach to store brands. "It's the difference between ho-hum, '25 percent cheaper' potato chips and, say, garlic-infused, kettle-cooked chips in a gorgeously designed, matte-coated bag," Maute said. "You're talking about a radical shift." 

In evaluating the prospects of retail companies, investors should consider whether those chains are fully committed to their store brands, Maute advised. "If the retailer doesn't have personnel focused specifically on brand-building, the company will likely struggle," he said. "Some retailers need to restructure their store-brand operations around the concept of 'win, differentiate and compete.' They should be looking for categories where they can dominate."

All of that said, even store-brand leaders such as Target, Costco and Kroger must continually innovate, Maute said. He cited Kroger's ongoing test of plant-based products in the meat departments of 60 Kroger stores as an illustration of just how quickly retailers can respond to market trends today. "Kroger jumped on the plant-based thing right away," Maute said. "That's something that would have taken years to happen before, if at all. Investors should take note: Store brands are giving CPGs a run for their money."

The session at Stifel's investment conference was titled "Private Label: Threat to National Brands or Overblown Concern?" It included independent marketing consultants Roberto Ramos and Tammy Gianfortune and was hosted by Chris Growe and Jim Duffy, Stifel managing directors based in St. Louis and Denver, respectively.

About CBX
CBX is an independent agency specializing in brand strategy and design services, including: branding, innovation, packaging and retail design. Founded in 2003, the company currently employs nearly 100 creative and support staff at its New York City headquarters and Minneapolis office. Its client list includes General Mills, JM Smucker, Bayer, Kroger, Keurig Dr Pepper, Hain Celestial, and Active International.

NOTE TO MEDIA: Todd Maute is available as a resource for your articles on private-label branding. Please see media contacts below.

Press Contact: At Jaffe Communications, Elisa Krantz, 908-789-0700, [email protected]; or Bill Parness, [email protected]

SOURCE CBX

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