Private-Label Case Studies
Initial research did not generate specific case studies of any particular private label grocery label; however, media articles on the rise of grocery private label brands abound, and the available information was sufficient to create a case study for Trader Joe's private label brand and Kroger's 'Simple Truth' brand. Trader Joe's brand can attribute its private label success to its innovative, trendy and unique products; Simple Truth's success is attributed to its responsiveness to consumer trends.
- Trader Joe's is a US national grocery chain with approximately 500 stores. The company is a specialty retailer, and its private label brand has garnered significant consumer trust specifically because of the company's established reputation in the private label section.
- Consumer trust in Trader Joe's private label, and consumer satisfaction overall with the company, combine to create a degree of consumer loyalty that one industry source describes as 'maniacal.' Another source refers to Trader Joe's 'devoted fan base' as 'obsessives.' This consumer loyalty is a significant factor in Trader Joe's private label success, since trust in the private label itself motivates consumers to expand into different categories within the label/brand.
- 80% of Trader Joe's products are private label, which has been a major component of its marketing strategy since the company's inception. This high level of private label products contributes to the company's 'low cost + high quality' reputation, and is a key component in the company's pricing strategy.
- Another significant aspect of TJ's success as a private label brands is its reputation for 'unconventional and organic' private label food items. The brand is known for offering 'trendy' and 'unique' products that are distinct and innovative, as compared to the private label products of other grocery retailers. Product innovation and rigorous taste-testing are integral components to this strategy.
Kroger's 'Simple Truth' Brand
- Kroger is a US national supermarket chain and a multinational general retailer, and it has long been on the forefront of the 'natural/healthy' food movement. The robust financial success of Kroger's Simple Truth private label brand, and the brand's responsiveness to consumer trends, both contribute to recognition of the Simple Truth brand as a private label grocery success.
- In 2012, Kroger launched a new private label brand — Simple Truth — which was intended to tap into the burgeoning organic/natural market. By 2017, the brand had over 1,400 products in its portfolio and was generating $2 billion in annual sales. Simple Truth products are only available through Kroger banner stores.
- As part of Kroger's Our Brands product lines, Simple Truth products are manufactured by Kroger and are rigorously tested, which lends credibility to its assertion of high-quality, 'clean' products.
- Kroger, which has its own data science subsidiary, closely tracks consumer trends and uses this data to inform new Simple Truth product launches. Recent product launches have encompassed different grocery categories, including plant-based proteins, snacks, and beverages.
- In late 2019, Kroger announced an expansion of its Simple Truth line with Simple Truth Plant-Based. The company cites two specific consumer values as the drivers for this expansion: growing consumer preferences both for healthier foods, and for foods with lower environmental impacts.