Private label sales soar above national brands when the economy tanks—that's no secret. And as the pandemic roars into a predicted fourth wave, two-thirds of shoppers have shifted their buying habits in recent months, according to information from ingredients supplier Kerry and Nielsen IQ, with newly budget-conscious consumers doubling between September and December of 2020. That means private label sales are poised to increase again.
With sales expected to rise both in-store and online—the number of private label sales have quadrupled to four percent of eCommerce sales in the past two years, according to the same Kerry and Nielsen IQ research—IGA retailers have an opportunity to capitalize on shoppers' need for affordable, quality private label products shoppers know and trust.
"When IGA did extensive testing in 2019 to compare IGA Exclusive Brands to national brands, other private labels, and even international brands, we learned that the IGA product's quality is outstanding," IGA CEO John Ross says. "We also learned that shoppers trust that the IGA brand is going to be higher quality and taste better versus other private label options. In fact, in a 2020 survey of IGA shoppers, 98 percent of respondents said they trust the quality of IGA Exclusive Brands Products. To get a trust score like that on a private label brand is unheard of in branding."
Those trust scores and loyalty from IGA shoppers is all the more reason to double down on IGA Exclusive Brands products. With that in mind, we spoke to Senior Director of IGA Exclusive Brands Dan Muller about the status of IGA's Exclusive Brands line, how it's been affected by the supply chain ups and downs, and what retailers can expect for the rest of 2021.
What kinds of issues have you been experiencing due to the pandemic?
Dan Muller: The pandemic greatly impacted the supply chain across the board, from small manufacturers to national brands. Vendors have had trouble supplying product to licensed distribution centers (LDCs) due to supply and labor shortages.
The supply has been up and down, with issues early in the year, getting better in spring, and now there are problems again. But we're expecting supply to get better by October or November.
What have you and your team done to address those issues?
DM: We've been going after new suppliers to get back some of the discontinued items, and we've also stepped up communication in a big way. We send out a weekly supplier bulletin to our LDCs that has been very well received—it's really opened up the lines of communication between IGA, the vendors, and the LDCs. We're communicating about shortages, suspensions, discontinues, allocations—everything. It's been a tremendous help as it has kept our wholesalers abreast of these situations. We'll let them know: we're good on this product, we're going to be short here. This way, the wholesalers know what to expect.
What can retailers do to ensure their IGA Exclusive Brands products succeed?
DM: The best thing that retailers can do is to be aware of all of the items their LDCs stock in private label, and restock their shelves with the missing items that consumers want.
For example, we recently instituted a category management review process with our LDCs for cookies and crackers from our supplier TreeHouse. This process helps our LDCs understand all of the items available in cookies and crackers and in turn, it helps all of our retailers know what items we have available from their LDC.
As retailers stock their shelves with more IGA Exclusive Brands products, we're looking at adding more items via line extensions—items that have been discontinued and product innovations. We're really enthusiastic about getting these items out and getting the support of our retailers over the next few months.
What's the status of the IGA Exclusive Brands label redesign?
DM: We're just finishing up the redesign; it's over 95 percent done. About 80 percent of those items are now on shelf and the other 20 percent should be available by the end of the year.
What else should retailers know about IGA Exclusive Brands?
DM: We continue to participate in the National Digital Ad, so take advantage of that by stocking plenty of product for those offers. We have 1-2 categories a week in the Ad right now, and we plan to add to that. Not only will it grow, but we believe that it will get better with deeper deals and more offerings.
Additionally, there's still an opportunity for retailers to educate shoppers on our double-money-back guarantee. Last fall, when we hosted our Exclusive Brands-focused Family Meals Made Easy! sweepstakes, we gave shoppers the option to complete a brief survey as a form of entry. The results were clear: shoppers trust the product, however a majority of shoppers did not know we offer a double-money-back guarantee. It's a great way to differentiate from the competition and show shoppers that you stand behind the product. If you haven't already, use the ready-to-print instructions for both employees and shoppers and check out the Exclusive Brands sign kit, which calls out our product guarantee.
What's coming up next for IGA Exclusive Brands?
DM: We're trying to get the products out that we already make and make well—meet the demands of our retailers, LDCs, and loyal IGA shoppers by finding the right suppliers. Once that is back to normal, we can start to focus on new products. We do have an exciting new product line planned, which we can share more about once the supply chain has evened out and adjusted to the new normal.
To help promote our core products, we'll be launching a Digital Cookbook in Q4 that will include shopper-created recipes featuring IGA Exclusive Brands products. This digital cookbook will be featured on IGA.com, in the National Digital Ad, in the Q4 Quarterly Marketing Kit, and will be available for all retailers to promote on their own digital channels. The Digital Cookbook will be continuously updated throughout the quarter as we transition from Halloween to Thanksgiving and Christmas.