BevNET.com - Can you really love a store brand?

Can you really love a store brand?

Posted: 6/22/2004 10:29:03 PM

THE PRINCE OF BEVERAGES
By Greg W. Prince

What is a brand? Let’s go shopping for answers.
A brand is a name on a product. “I’m gonna go get me some of that item I like, though it doesn’t matter if it’s (brand) or not.”
A brand is an identity unto itself. “I’m gonna go get me some of that (brand).”
A brand is something with which to identify. “I’m a (brand) lover.”
A brand is something you can only get in one place. “I’m going to (brand store) to get me some of that (brand) because I’m a (brand) lover. No other such item will do.”
Let’s examine that last one, because it speaks to perhaps the quietest but most revealing trend in beverages today.
It’s the store brand, and there’s nothing parenthetical about it. Some call it private label, but that doesn’t stick anymore—too much of an industry term and too dismissive for what’s going on in the real world. Even store brand doesn’t go far enough for some who are ringing up their sales. They like “premium store brand.”
But you know what we’re talking about. It’s the stuff you buy at a particular supermarket or other kind of retailer that you can get there and nowhere else. Sounds almost exclusive, doesn’t it?
Exclusive denotes upscale, doesn’t it? My wife, bless her soul, has simple tastes, but likes Coach bags—purses and briefcases and the like which she informed me are top-of-the-line. They have Coach stores, I’ve learned in advance of birthdays and anniversaries, but I can get her a Coach bag in fine department stores everywhere. By definition, Coach isn’t as exclusive a brand as Safeway Select.
What makes a 12-pack of Safeway Select or any number of premium store brand beverages exclusive is you can only get it at Safeway. Therefore, logic would tell you it must cost more than any other brand since you can grab Pepsi or Coke anywhere.
But logic has nothing to do with beverages sometimes. For reasons that don’t follow the rules of exclusivity, the store brand is cheaper than the ubiquitous brand. That’s not a revelation, but maybe it should be, especially with the “premium” selling point emerging as an effective one.
Premium store brand beverage sales are up across the United States. A full 11 percent of US carbonated soft drink dollar volume belongs to the labels formerly known as private, according to John Sheppard, a man who should know. Sheppard is the president and chief operating officer of Cott Corporation; he’s about to step into the sizable shoes of Frank Weise and assume the title of chief executive officer.
Working with an impressive retailer roster, Cott—which does business in the UK and Canada as well—manufactures premium store brand beverages along with the identities that will, in turn, create the first impression shoppers get of those drinks. There is no Super Bowl ad, no MTV Spring Break sponsorship or, generally speaking, no billboard off the highway to rev up consumers for premium store brands. You meet them on the shelf.
That’s what’s makes it a quiet trend. Premium store brands are a stampede that came in on little Cott’s feet.
Cott’s not so little, actually. It’s the soft drink marketer with scale that’s been growing. There aren’t many at the moment living up to that description. After Coca-Cola, Pepsi-Cola and Dr Pepper/Seven Up, it’s Cott’s corps of premium store brands and then nothing but regional or niche players. That’s it. That’s the soda business right there.
The mid-size franchisors who made up the once vital middle of CSDs as recently as a decade ago have evaporated. Royal Crown, A&W, Barq’s, Seagram’s…they used to be companies as well as brands. Now they are units, if that, of bigger outfits. While they’ve gone on to their ultimate reward, Cott is filling the void for consumers who want something else and, more pointedly, for retailers who want to sell something of their own.
At Beverage Forum in late May, Sheppard said the premium store brand boom is a consumer phenomenon. A Gallup survey, he noted, found 7 in 10 consumers believe they’re equal to or better than what have always been called national brands (beep-beep, Coke and Pepsi).
Sheppard suffers no illusions. “There’s a need for a No. 1 and No. 2 national brand,” he told the Forum. “We can complement that.” That used to be the role of the RC or C&C (they of the beep-beep commercials). Cott’s clients own it now.
Whether what they sell are brands in the way we’ve come to think of brands may not matter if consumers are happy and retailers are delirious. In the beverage scape that exists today, it’s the stores, represented by the bulked-up chains, that are ever more dictating the terms of engagement to the marketers who want to keep those customers satisfied. Cott’s business is by definition as much about them as it is about the end users.
Forty percent of Cott volume worldwide comes from a little outlet called Wal-Mart. Albertson’s, Publix and Safeway are also on board. Cott’s formula is one part quality product (as developed in the legendary Columbus, GA lab that used to be RC’s) and one part retailer care. Store brand loyalty, Sheppard said at the Forum, leads to store loyalty.
“And the store brand,” Cott believes, “will drive category growth.”
Premium store brands seem to have cleared the hurdle of taste and perception. They may cost the consumer less than the Cokes and Pepsis do, but it’s “differentiation” and not low price that Cott insists lands the retailer labels in consumer shopping carts.
“We’ve gone from selling a flavor to selling a brand,” Sheppard told the Forum audience. “There’s not a flavor category out there in which we don’t already have a product or one ready to go.”
So we can all agree that Cott is a success and that premium store brands are going concerns. But does that make them brands? Really brands? Identities unto themselves? Identities consumers want to wrap themselves in?
I’m not sure. If they’re not, and they continue to grow, maybe we have to wonder if brands will ever be all they once were.

Greg W. Prince (prince@bevnet.com) has covered the beverage business as a reporter and editor for more than 15 years.