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Re-store brands: private labels shed their downscale roots

For years, Lucerne – the house dairy brand of giant Oakland, Calif. supermarket retailer Safeway Food Stores – evoked milk products in name alone. Untouched since the 1970s, Lucerne’s packaging featured a hokey yellow flower that resembled a fat asterisk more than anything else. The packaging had little to do with what was inside.

Lucerne was also just one in a class of 24 store brands Safeway sold. When Landor Associates, the San Francisco consultancy, analyzed them all, most didn’t have a real image, or one worth improving. So the bulk were junked.

But Lucerne – named after the Swiss town – had equity. And, Landor thought, potential. “The name Lucerne made us think of cows, of course,” says Bob Pringle, a Landor principal. “And a barn on a hill. Something fresh, clean and bright.”

Lucerne and eight other Safeway category workhorses survived the cut. Landor then redesigned the packaging, lifting Safeway’s private labels to a par with national brands. In Lucerne’s case, those dairy images and a new, crisper typeface replaced the previous devotion to brassy reds, oranges and greens.

“Private label” or store brands were once an afterthought on grocer’s shelves, defining the low end of a given category. But they’ve been receiving a lot of attention lately. Indeed, at many package design houses, the launch or revision of private labels have become a major source of business.

One engine has been the recession. There’s no time like a tough time to expedite the consumer’s search for value. Store brands are typically cheaper than national brands – anywhere from 10% to 20%.

But the value line is only part of the tale. Private labels have been upgraded to provide a quality image. Well after a recovery arrives, retailers expect to compete with national brands for customer loyalty.

That’s because retailers have found themselves stalked by the same financial terrors plaguing manufacturers, and private label means greater profits for supermarkets. “With all the consolidation that’s gone on in the industry, supermarket owners need to improve their bottom lines,” says Brian Sharoff, president of the Private Label Manufacturers Association (PLMA) in New York. “And they can’t do it being the staging ground for semi-weekly cola wars.”

Private label lines save consumers money partly because there are few advertising costs to pass on. But that means the packaging must carry a heavier load, hawking the contents and building the brand all at once. “National brands have years invested in building emotional appeal,” says Pringle. “Consumers have to feel good about buying store brands, not apologetic.”

Store brands used to look about as appetizing as the black on-white generic packages that retailers showcased in the early 1980s. Today, plain-vanilla generics are dying out. And store brands are taking their place. According to the PLMA, generics sales slipped 13% in 1990, to only $765 million. Store brands rang up $25.9 billion in sales in 1991, a 2% uptick from 1990.

Dominick’s Finer Food Stores, an 86-store Chicago supermarket chain, recently wrapped up the introduction of its new self-named store brand. Since the 1960s, Dominick’s had slapped the curlicued Heritage House label on more than 1,000 products and across every category. Still, says spokesman Rich Simpson, “we discovered people did not immediately recognize Heritage House was a Dominick’s brand.”

Design firm Lipson-Alport-Glass Associates of Northbrook, III., went for simplicity. “When Dominick’s came to us, they recognized they had a problem with Heritage House,” says Howard Alport, a principal in the firm. “It didn’t leverage their name. And it was dated-looking. It didn’t have a quality image.”

The key, Alport says, was designing a system that worked for hundreds of product categories and structures – from cylindrical cans to plastic bottles, cellophane wraps to glass jars. “Dominick’s needed Dominick’s label products. We have a personality with that, since it’s a family business.”

Dominick’s paid its new label the ultimate compliment: it committed the chain’s corporate identity to the private label line. The company logo shifted from square block red letters on a white background to a crisp script with a green and red banner underneath. The Dominick’s line has a new tagline, too. “Dominick’s. the better name brand” is trumpeted on in-store signage and circulars. In all, the private label redesign shook the entire company from 20 years of staleness.

Store brands should strive for image over splashy design, according to Landor’s Pringle. “In many cases, shelf impact is less of a concern because the retailers control the shelves,” he says. “Sure, you want to make sure the brand name pops out. But the design should have more imagery. Quality is more important.”

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