Topco Reinvents Private Brands for Savvy Shoppers
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Consumers today are focused on finding quality products at a strong value, and many have turned to retail private brands to meet this growing need.
Recognizing the opportunity to expand its own-brand product lines, Topco is in a unique position to help its 46 retail members provide their shoppers with storewide money-saving solutions that also offer quality and uniqueness.
Katie Waeltz, VP of center store category management and insights with Topco, shared her insight with Progressive Grocer's sister publication, Store Brands, on the changing private label marketplace and how Topco has evolved its efforts to meet the needs of consumers.
Store Brands: What is the current state of Topco’s private label business?
Katie Waeltz: There has been an elevated and added consumer appreciation for own brands. The days of a white box and a black label are gone, and own brands stand for value and quality. These are brands that have meaning and have a connection to shoppers, but it’s been a journey. The pandemic stressed the supply chain everywhere, and it provided an opportunity for own brands to shine with shoppers who perhaps in the past would never consider them.
Coming out of the pandemic, shoppers were presented with high inflation, and there was this push-pull between national brands and own brands. At Topco, we have been able to navigate those challenges and changes, and it has evolved the way we understand shopper behavior and the solutions we provide to our membership, enabling them to be competitive in the future.
SB: What steps can Topco take to compete with the ways national brands can push back to regain some of the shelf space they have lost to own brands?
KW: First and foremost, we compete by partnering together and aggregating to ensure that Topco members have high-quality solutions for their shoppers every day. Our sourcing teams are relentless in their pursuit of the best cost and are keenly aware of the commodity triggers that can bring cost down — and they champion those every day. We continue to innovate with new items, brands and solutions, of course, and we’re consistently recognized in the industry for excellence in innovation and design.
We also innovate in redefining solutions that we have provided to shoppers for years. We’ve been able to reposition our packaging to be more relevant to shoppers, focusing on the elements they value and highlighting those for easier decision-making at shelf.
Also, coming out of the pandemic, suppliers were hesitant to do shippers and displays — labor is expensive, and carrying inventory on displays can be challenging. So we shifted gears to say we still need these things, but not every day — some shippers and displays can be featured during key selling seasons only.
SB: As consumers continue to increase the amount of private label products they purchase, what is driving the movement? Is it still economics, or are there other factors at play?
KW: There is still the shopper that has a certain dollar amount in their pocket and at any given time is making trade-offs at the shelf every day. Own-brand products can serve their needs. There is also a segment of customers that have become increasingly loyal and fanatical about the own brands they buy. They trust these brands for their families, and they have a deeper connection to the brand — in own brands, that’s often a balance between value and quality: Not only is it a good value, but I also trust the brand to deliver for me and my family.
SB: Have there been any noticeable changes in terms of demographics with who is buying private label products?
KW: Private brands have become more ubiquitous, so everyone is buying products sold under private brands for different reasons. What’s becoming more interesting is how you appeal to certain groups of shoppers. Take Gen Z, for example. They’re digital natives, they often build brand trust through influencers, they’re the most ethnically diverse generation, and they seek authenticity. What surprised me about Gen Z is they’re still making a lot of decisions in-store, at the shelf and based on some of the key factors that many generations before them did. So, while they are different, there are some key principles that remain consistent for them.
[RELATED: 5 Habits of Gen Z Shoppers That Grocers Should Heed]
SB: Topco currently has 46 members. What type of feedback or input do you receive from members in terms of developing new products or cycling out of other products?
KW: Randy Skoda, our CEO, says this all the time: “The best thing about Topco, and our biggest strength, is that we have 46 independent retailers, and the most challenging thing about being a co-op is that we have 46 members with different strategies.” Our most successful strategy has been our ability to secure commitments from our retail members upfront. We also use qualitative and quantitative research with their shoppers. We seek to understand our members’ shoppers and what they are seeking from their grocery store. This supports the development of new brand strategies and new items. When we have concepts for new products, we communicate with members to garner interest in what we are proposing.
SB: As you look ahead, what are the opportunities for growth?
KW: If we could get all of our members to commit and partner together on key initiatives, I think we would be unstoppable. Our members know their communities better than anyone in the industry and are a force to be reckoned with. I look forward to continued growth in member brands, Topco brands and innovating.
