Product and Process Innovation Lead the Charge at PLMA Show Opening

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November 15, 2009

More than 4,500 retail and wholesale buyers and supplier executives are expected at PLMA's 2009 Private Label Trade Show in Rosemont, Ill., which opened Sunday and continues through Wednesday.

The show kicked off with a series of workshop presentations focused on store brand innovation and culminated with the grand opening of the association’s first ever Innovation Hall exhibits, featuring companies that support all areas of store brand new business development, including market research and consulting, strategic branding and packaging, labeling, technology, logistics, testing and certification, marketing and merchandising.

The annual PLMA show is the nation's largest marketplace for store brands, presenting more than 2,000 exhibit booths from leading manufacturers from all major product categories from food and beverages to health and beauty care and household products.

This year also marks the expansion of the association educational programming, which includes 25 workshop sessions that feature the “how-tos” of putting innovation into practice.

The following are some takeaways from Sunday's workshop presentations:

• Keynote speaker Wes Bray, of Retail Optimization Inc., outlined how retailers can use their store data and information more intelligently to optimize their shelf space and their store brands. He highlighted a case study of a 60,000 square-foot store where approximately 10 store brand categories were studied and optimized. The results? Sales increased by $8,135 weekly from $14,000 to more than $22, 000 by increasing store brand facings from 1,446 to 2,293. “Store rationalization typically has high impact on private label brands because they are often under-faced compared to national brands,” he said. “National brands benefit as well. Often the largest core national brands are under-faced compared to new products they are trying to promote. Middle tier and niche brands are the most vulnerable to getting cut.”

• In a presentation titled “Rising Above the Dilemma of Private Label’s Untapped Potential,” A.T. Kearney’s Constanze Freinenstein said global penetration of store brands could reach 65 penetration entirely at the expense of "B and C" brands. The big opportunity for private label growth is in more sophisticated categories such as beauty care, health care, personal care and soft drinks. The key, she said, is for retailers and manufacturers to figure out their new roles in this rapidly evolving business.

• Tom Vierhile of Datamonitor, which authors 20 to 30 consumer insight reports as well as a new product marketing guide, identified several mega trends for retailers and marketers to keep an eye on: less processed products that contain more natural ingredients; new functional ingredients -- such as hibiscus coconut and mate -- in foods and beverages; more adventurous use of flavors such as bacon–flavored vodka; increased use of green materials such as bamboo in packaging. Only 5 percent of new products -- classified by Datamonitor as “those that are new to the world” -- are truly innovative, he said. More than 60 percent of innovative product introductions are “formulation innovation”; 16.2 percent are packaging; 11.2 percent are positioning innovation; 6.3 percent are technology; 4.6 percent merchandising and 1 percent are products that create new markets. Top flavors in 2008 vs. 2005 were lead by acai, mojito and pomegranate, followed by dark chocolate, cashew, artichoke, blood orange, hummus and lavender.

• Perry Seelert of united* dsn discussed the company’s work with A&P’s Via Roma Italian store brand, wich was launch earlier this year. The success of Via Roma shows how '"it's more than just packaging. It's about creating a voice that brings a brand to life," he said.

Read These Related Articles:

• PLMA Live: Nielsen V.P. Says Store Brands Will Remain Strong After the Recession
• Store Brand Product Innovation and Market Share Reach New Highs
• Meijer Launches Specialty Store Brand Foods
• Resist the Temptation of Easy Money for Long-Term Store Brand Growth
• Nielsen on the Global Future of Store Brands

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