For convenience stores, the potential for growth in private-label products is vast.
Just ask c-store operator Yesway, whose Allsup’s banner has been known for its deep-fried burrito for more than half a century. The Beef and Bean Burrito is available at all 441 Yesway and Allsup’s stores in nine states.
So, the retailer thought, How can we capitalize on the success of that signature item?
Enter the chain’s private-label Beef and Bean-Flavored Tortilla Chips, introduced systemwide last November.
“It was basically just sitting around with the merchandising team, understanding what can we bring to the customer that really differentiates us from anyone else in our footprint,” Alan Adato, Yesway’s senior merchandising and procurement manager, said during a NACS Show session Wednesday titled “Expanding the power of private labels.” “So, fast forward to today, in the time that this product has been on our shelves, approximately 11 months, this is our No. 1 flavored tortilla chip of the 15 or so items we have in the tortilla chip family. It just really resonated with customers.”
Similarly, Powell, Tennessee-based Weigel’s, which operates 80 convenience stores, got its start as a family business selling raw milk. With dairy its signature item, the retailer considered how to make the most of that reputation.
That led to the creation of innovative private-label milk flavors such as Brownie Batter, MoonPie, Banana Pudding, Red Velvet, Pumpkin Spice and many more, noted Nick Triantafellou, Weigel’s Stores’ director of marketing and merchandising.
“So, we were known for milk,” Triantafellou said. “But as I so delicately told Weigel’s, it’s the frozen white tundra. There’s no excitement. Sales are going to keep going down every single year as more and more different, alternative milks come out … Because we own the milk category, let’s make it fun and exciting.”
Private label has seen tremendous growth in recent years, surging in both dollar and unit sales, according to data from the Private Label Manufacturers Association. Annual sales of store brands have risen 34% since 2019, according to PLMA, driven by rising grocery prices and retailer innovation.
Differentiation is a key strategy when it comes to creating a private-brands program in c-store and grocery. What can you do that sets you apart from the competition and gives customers a reason to shop your store?
Tracing the evolution of private brands (once known as “generics” in the 1980s), shows how much opportunity is in the space, said Gil Phipps, senior vice president of global customer solutions for marketing agency Advantage Solutions. Generics beget “knock-offs,” cheaper versions of national brands, which led to “knock-outs,” differentiated, craveable products. And today, Phipps said, retailers are “getting knocked-off” by creating private brands that become so successful, they get aped by national brands.
“The evolution has happened,” Phipps said. “Customers don’t think of private brands in that generic way anymore. Innovation really, really drives and establishes trust … Customers actually love these brands. They don’t think of them as private brands. They think of them as brands.”
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