In April, Albertsons named Geoff White president, own brands. It’s a newly created role that not only reflects the grocer’s commitment to its private label program but also the industry-wide trend to treat a private label program not as a national brand equivalency initiative, but as a relevant brand name that resonates both value and quality to the consumer. Own Brands Now sat down with White, a Safeway alumnus, to discuss the role own brands plays at Albertsons and how suppliers can best partner with a retailer that manages 20 well-known banners operating across 35 states.
Own Brands Now: What is behind Albertsons new emphasis on own brands?
Geoff White: To answer that question it’s probably best to give you a history of the last couple of years. When we merged with Safeway, we knew we had a huge opportunity with own brands across the entire enterprise. So in the last couple of years, the team really focused on rolling out these brands into the Albertsons banners. That was a Herculean task when you think about the number of items we have and the multiple banners we have to get these in. The team did an incredible job, because as we sit today the success of the portfolio is doing really, really well. Those two years are behind us. We feel really good where we’re positioned. Where the future takes us now is really own brands being a significant part of the company’s growth. To do that, my vision ultimately is to drive significant innovation. We really believe that we are positioned well with brands like O Organics and Open Nature to be able to do that. We have an incredible brand with Signature that spans across the store and we think we have a ton of runway and innovation under [that] brand. We’re positioned well with Value Corner to be able to offer items in key categories to those consumers that are on a budget. Ultimately, we think that we can offer not only specific items but the right brands to the consumers in all of our different markets to be able to be successful. So you’ll see a strong emphasis on innovation coming from us.
OBN: How has the evolution of ‘own brands’ played out at Albertsons?
GW: We have this incredibly motivated workforce across all of our banners. The reason we call it ‘own’ is because it’s us. It’s the Albertsons company’s brands. They’re very important to us. We work very hard for all of our associates throughout our entire organization to understand not only the portfolio, but what it represents. The key part of that was helping them understand that we’re not calling it private label [because it’s] our own, meaning it’s [their] brand. It's something that represents the company so we make sure it is represented well with our consumers.
OBN: So it engenders a sense of pride and ownership in delivering the quality quotient of those brands to consumers.
GW: That’s exactly it.
OBN: What is Albertsons’ own brand penetration today? Where are you looking to take that and how do you get there?
GW: I can’t get into specific growth and penetration rates, but I can tell you that our overall approach isn’t really complicated. The overarching strategy of our company goes back to years and years ago of running great stores and being everyone’s favorite local supermarket. What comes with that is ultimately having the right products and the right value of those products in our stores and we play such a significant role in that to be able to drive customers. Ultimately to have private label, or our own brands, [we must be] positioned to create loyalty and differentiation. I think that there is a large upside with regard to being an industry leader when it comes to innovation, being on the cutting edge of emerging trends. We’re located in San Francisco and not Boise. That was done by design. This team is fully immersed in this culture of food and innovation, which is very vibrant here, so [that] really helps us understand cutting edge consumer trends. The team does well with that. We also have our culinary kitchens and technical center located next to the building [and] we do a ton of work with regard to building innovative ideas and items, testing all sorts of different items and being able to commercialize those. Ultimately, the goal for us is to drive innovation and to be able to be a significant part of the company’s growth strategy.
OBN: What is an example of innovation? What does that look like?
GW: At a high level we have two big brands in O Organics and Open Nature. Both brands, in the scope of things, are still young. There is a long runway as organic food becomes more mainstream and we [already] have a really reputable brand [on shelf] that has grown quickly. A ton of runway innovation both there and with natural. We were the first retailer to launch single-serve cold brew coffee, which just launched earlier this month. There are these [kinds of] examples across our entire portfolio where we’re either fast followers or we are on the cutting edge of emerging trends.
OBN: How do your partners help get you toward your goals?
GW: We work on a decentralized model, which positions us really well in all of our markets. But on the flip side of that we are able to leverage scale with our own brand portfolio. My expectations of suppliers, no matter how big or small, is to be fast, innovative and flexible. Those suppliers need to come to the table and we have some great collaborative relationships with many of them. They need to be able to understand not only consumers and emerging trends but how to be able to launch products quickly on top of that. I’m a firm believer that speed is key to being in the market with your own brands as trends cut real fast. That’s how we leverage ourselves with suppliers, it’s around speed, so products [moving] from ideation to [placement] on shelf happens quickly. We’re always scouring the earth for new partnerships with suppliers that are on the cutting edge. We have a full sourcing team here that does a lot of that work, but also because where we’re located, we can see things on shelf early before they’re successful around the country.
OBN: What’s the scale? When somebody is looking to partner with Albertsons, how many doors do they need to be prepared to fill?
GW: We’re looking at everything from products that can be scaled to 2,300 stores to items that may be just division specific, whether it’s flavor profiles or line extensions of some successful items within our brands, we’re going to become and we’ve already started down this path of being much nimbler. It’s part of our being decentralized and having specific decisionmakers in every market and being able to give them the tools that drive their business and so our focus is not only large-scale rollouts of innovation, but what’s important in a division that we can support and get done for them.
OBN: That sounds ideal for pilot testing before scaling across the entire chain.
GW: Yes. I can give you a little bit of background on that. We’re located in Northern California and we have a really aggressive division here that understands each marketplace. They do a lot of testing and learning as well with local items in the marketplace. We have an incredible relationship with them that we’re able to do the same thing. Their insights that we work with them on really help us focus our energies on those types of things and because the division is right there, we can turn things around fast and test them. You’ll see more and more of that from us.
OBN: What’s the bottom line? What’s the one message you want to get out to the trade?
GW: It would all start around innovation. What they should expect from us is we’re open to any and all innovation that can be successful either across our entire enterprise or in a small region. Our team is very nimble and fast and we can get things done quickly. That we’re really focused on cutting edge trends, whether it’s items or categories; we want to be leaders with that. And we want to make sure we’re able to leverage all of that.