Profiles in Innovation: A&P's High Hopes for Premium Store Brands (Part 2 of 4)

September 14, 2009

By Maureen Azzato

Editor's Note: This is the second of an exclusive four-part series on A&P's revamped store brand's program. Last week's article, "A&P's Store Brands Transformation," focused on the grocer's overall strategy and plan. Subsequent weekly articles in the series will feature Green Way, A&P's natural and organic brand, as well as its health care, beauty care and pet brands -- Live Better, Market Spa and Preferred Pet.

As the store brands team at A&P studied its large portfolio of products, they realized very quickly that they had identified an opportunity with Italian cuisine related items.

Like many other grocers, A&P had typical Italian meal ingredients across various departments of the stores -- pasta, pasta sauces, olive oil, vinegar, bread, olives and Italian meats and cheeses -- but customer research revealed that A&P wasn't making Italian meal preparation easy for one of its key customer segments.

"We identified a number of products in the store (much like we did in organic and natural) that didn't have any continuity to them when it came to meal preparation," said Doug Palmer, A&P's vice president of own brands. "We thought there was a golden opportunity to take a look at everything in our stores across categories and departments to see how many Italian-related products and cuisines we had."

The store brands team discovered the company had upwards of 200 national-brand-equivalent Italian items.

"We realized we could very easily re-brand these products as a uniform Italian brand in the store, and then eliminate SKUs we didn't need any more," Palmer said. "But we knew that this couldn't be just another Italian brand. We really looked for a way to create some excitement with this brand and make it recognizable and so different that consumers considered it the Italian brand in our stores."

After the team identified all the items, it conducted various name searches, eventually settling on Via Roma. But leaving nothing to chance, the team conducted various consumer market studies on the name to ensure it resonated the right personality and authenticity.

To get the brand image and positioning right, the United design firm went to a small village in Italy to shoot photos of older generation Italians that appear ubiquitously on the Via Roma label today.

"The grayscale photos create a phenomenal billboard and evokes such emotion," Palmer said. "It's just fabulous when you hear customers respond to these photos saying it looks like their aunt, uncle or grandparent. There's a lot of emotional attraction to the brand and we felt that was the heart of the product line."

Naturally, the team played off of these wonderful old world personalities when it created the tag line -- "Food with Personality."

In addition to the usually Italian fare, one unique dessert item is a cannoli kit, which includes the pastry shells and a separate squeezable pouch filled with the sweet cheese mixture to fill the cannoli shells right before serving to preserve the crispiness. Another fun item is the fresh cold-chill pizza sold in the deli, which includes premium cheese and toppings, and a label that tells a brief Old World story.

"About half of the program is imported and custom made," Palmer said. "We're treating this like a CPG brand, doing things like stamping lids and addressing product structure, not just the label. This is a major departure from the typical store brand process."

Of the current 150 items today, about one-third were re-branded from existing lines, although most of the products were reformulated to bring them up to premium spec. Over the next few months A&P will add many more products in the pipeline, bringing the line to approximately 200 SKUs.

"This has been such a labor of love for us," Palmer said. "We think we're on a definite path to make Via Roma a destination brand in our stores."

Hartford Reserve & AC Gold

In the course of the team's SKU rationalization, the premium Master Choice brand was eliminated with some SKUs going to Via Roma, some to the Green Way natural and organic line, and others that were truly premium went to Hartford Reserve, named after the chain's founder George Huntington Hartford.

 "The rest of Master Choice products were eliminated," Palmer said. "Many of the items were created 15 years ago and became mainstream over time and were no longer premium by today's standards. We found out that there was little equity in the Master Choice brand and felt it would be too expensive to rebuild it. We thought it would be just as cost effective to create a new brand and replace it with Hartford Reserve."

Items in the new premium line include a very popular apple pie made with one pound of five different varieties of apples and an old fashioned crust made with trans-fat-free vegetable shortening. Other items include whole bean coffee, giant nuts, 100 percent Canadian maple syrup, deli meats, breads and sauces.

Another step up from national-brand-equivalent products is AC Gold, which Palmer said will be used where there is opportunity for categories that have multiple tiers of branded products. "It's really the middle of the road between America's Choice and Hartford Reserve. In some cases it is the best in the category where there is no national brand equivalent, but it's not premium."

 Categories ideal for AC Gold are ice cream and frozen pizza, according to Palmer, because they have multiple quality tiers and it "give us the opportunity to create segmentations within a category and still match the national brand target."

Editor's Note: Profiles in Innovation: A&P, Part III next week will focus on A&P's new natural, organic and earth-friendly Green Way brand.

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