Tom Griffin’s Post

If you're a #cpg brand, it is tough to compete on price with Store Brands, especially with #foodinflation continuing to climb at 3-4%. When you can't take #pricing because it will further erode your topline, then what do you do? Great companies do two things: 1. You invest in innovation. And real innovation, not a lot of meaningless flavor line extensions. 2. You invest in a structured, resourced #costsavings program that will provide the funding to better compete versus Store Brands. I don't do Innovation. But I do Consumer-focused cost savings. Let me know if your brand or business needs help...

Be careful what you wish for. What’s good for the general public isn’t always good for your business. We’re heading into year 3 of post-Covid inflation impacting consumer confidence and demand for certain segments of CPG. We’re finally at that inflection point, where retailers are biting the bullet and slashing retails to drive cusotmer count. For any of you retailers or distributors who have operated in a deflationary environment while trying to hold a positive YoY comp…it isn’t fun…this is a move of necessity. For emerging CPG brands looking to grow share right now, keep a watchful eye on the median SRPs of your subcategories. Target fired the first shots of this price war, but they are not going to be the last. Walmart Kroger and Albertsons will respond, and the regional chains will be forced to price match in spots. You don’t want to be collateral damage or friendly fire here. If you are an emerging brand on shelf at $3.99 and the national brand (or equivalent) just dropped from $3.49 to $3.29, that is going to impact your unit sales. Now is the time to run TOWARDS innovation, and into diversification with Omnichannel sales and a broad base of regionality. You aren’t going to win the price game, and it’s time for a #blueoceanstrategy #innovation #omnichannel #cpgbrands Pod Foods Caroline Grace Julie Pryor Lex Evan® Total Quality Logistics Flowspace https://lnkd.in/eRJYY6qu

Having gone to Target yesterday, I can tell you that the price drops that are announced in this CNN article that reads like an advertorial for the brand only follow price hikes. Case in point: we bought the store brand ice cream that was 20% off with Target Circle. That brought it down from $5 to $4. But here's the thing: until a few months ago, the everyday price of that ice cream was UNDER $4. I remember even getting it for under $3, about $2.79. Store brand products used to be substantially cheaper than name brand ones. In other words, you saved quite a bit by buying Favorite Day ice cream rather than Edy's or Breyer's. But the difference in price between the two has not shrunk substantially, and you see it in many products. For example, the Good & Gather (Target) brand cocoa powder, which happens to be of very high quality, I admit, used to be just $1.99 a container. It's now $2.69. That's over a 30% increase in price. Having discovered ALDI USA more recently, I can also tell you that its store brand products are overall more economical than Target's offerings. A lot of shoppers have shifted stores of choice while searching for ways to get their grocery bills under control, and this is likely what Target is responding to in announcing price cuts. This is the equivalent of gaining 10 lbs and then announcing to the world that you lost 5. Yes, you did, but you're still 5 lbs heavier than you had been. The same applies to prices that have increased by over 30%. A cut of a mere 10% doesn't get them back to where they were prior to the increase. What this mean is that even with some price cuts here and there, we are still paying an average of over 25% more for groceries than we were paying 2 years ago. #inflation #grocery

Interesting article on how today’s stretched consumers are opting for lower cost store brands, which account for 22% of all grocery sales. With lower price points and improved quality perceptions, it’s getting harder and harder for brands to retain loyalty, especially in categories where it’s tough for consumers to really know the difference. I recall someone saying to me during some shopper research years ago, salt is salt isn’t it, why would it matter if I buy own label over a brand? That logic applies equally to all the ‘commodities’ like sugar, vinegar, rice, vaseline but also potentially to items like pretzels and pasta where the manufacturing process is not necessarily understood. So how can brands stay in consumers’ hearts and minds, and shoppers’ baskets, in this environment without relying on price promotion? I checked out my pantry and here are my four personal examples – what examples do you all have to share! ALEX’S HONEY – its local to the area I live in so tastes better and is more sustainable. PAUL NEWMAN SALAD DRESSING – tastes great and profits support children’s causes. BETTY CROCKER – it’s tradition, I grew up with this and so did my kids. BONNE MAMAN – it definitely costs more, but it is simply just better and delivers the quality every time.

Private label spending not just about price, value. Grocery shoppers are becoming more attracted to private label items for their quality and taste, and the items themselves also play a growing role in store choice, according to a new report. #privatelabel #swissquality #bonyf #denturecaresolution #nitradine #olivafix #express #superior #medicaldeviceregulation #patentedformulas https://lnkd.in/dYjcXsAe

Grocery shoppers are buying more items on sale, eating at home more and choosing more store brands over national brand products, and all those actions are inflation coping strategies, according to a study conducted by The Feedback Group. In fact, such actions have increased over 2022, according to a press release on the study that also revealed consumers view store brands as more cost effective compared to national brands. "Food shoppers continue to adapt to cope with food inflation through a variety of strategies, doing more of nearly all of them versus a year ago," Brian Numainville, principal, The Feedback Group, said in a press release on the findings. #inflation #groceryindustry FeedBack Brian Numainville, IPC

Are the brands Great Value, Private Selection and Signature Select in your supermarket shopping cart? These sorts of "store brands" are taking business from big food companies across the grocery store. Long regarded as lower-cost imitations of household brand names in cookies, condiments and toilet paper, retailers see a chance to invest in "private label" products at a time when shoppers are looking for any break from high prices. And increasingly, their goal isn’t just to emulate national brands, but to beat them on quality and selection. Jesse Newman and Stephanie Stamm on the grocery store turf battle, via The Wall Street Journal:

Gaining in grocery... Discount chain Big Lots is aiming to tap into current shopper habits, offering bargains on a variety of household pantry items: https://ow.ly/Gcuq50S1ix1 #foodretail #grocery #retailing

 Beware, candy lovers! The cost of Halloween candy in the US has more than doubled across grocery prices in general, according to a recent survey. Over the past year, the price of chocolate alone has shot up by approximately 12%, according to research firm Datasembly, which collected sales data from over 150,000 stores across 30,000 zip codes, representing 200-plus retail banners. These alarming "candy-flation" rates, hitting double-digits for Halloween for the second year in a row, are even higher in some states, particularly in the Northeast. Consumers in Vermont, Maine, and Pennsylvania might be in for a shock as candy prices have increased by 14.7%, 14.2%, and 14.1%, respectively, compared to last Halloween.   On the flip side, states with the smallest price increases are Alaska, Michigan, and Ohio, where a bag of candy will only set you back an additional 7.1%, 7.5%, and 8.1%, respectively.   The #supplychain disruptions have played a significant role in these rising costs. The pandemic and other global factors have caused bottlenecks in the supply chain, affecting everything from raw materials to transportation. These challenges, combined with increased demand for candy around #Halloween, have led to higher prices for consumers.   Interestingly, the 13% price hike for candy this year represents a slowdown from the 20% national increase experienced from October 2021 to October 2022, as reported by Datasembly.   As a result, about one-third of US consumers are planning to opt for value or store-brand candies from retailers like Walmart, Costco, and Target for their trick-or-treaters this year.   With some 30% of shoppers intending to spend between $26 and $50 on Halloween-related items, including candy and decorations, and only 18% planning to splurge over $100, the impact of these price hikes is clear.   Hershey, one of the giants in the candy industry, has raised its prices by at least 7% in each of the last seven quarters, citing waning demand as a driving factor. The company's recent third-quarter earnings report highlighted that price hikes had offset volume declines related to price elasticity.   In a world where budgets are stretched, and economic challenges persist, value and affordability remain paramount for consumers. As Hershey CEO Michele Buck noted, it's a top concern as we navigate these turbulent times.   So, as you stock up on your Halloween treats, remember that this year's candy comes with a little extra "candy-flation" twist!  #Halloween #CandyInflation #SupplyChainChallenges

It should not be a surprise that store brands or private-label products have taken a bigger share of consumer’s wallets. Inflation and overall economic uncertainty are forcing many consumers to reconsider how they shop and especially how they allocate their grocery budget. For brands and retailers alike, it’s more important than ever to focus on the shifting behaviors and the opportunities to influence shopper activity based on pricing and promotions. If you’re current capabilities don’t support simultaneously optimizing margin, revenue, and volume, reach out to learn more about our recent price optimization results. #pricing #priceoptimization Sam Iosevich Marty Anderson Dmitry Magas Georgiy Arutyunyants Dr. Dinesh R. Helwade