Recently, our own Mark Beebe wrote a guest commentary article for the April edition of Private Label Buyer. His published article is below.

Thirty years ago, private labels in the United States were for the beans. Literally.

Private labels were found only on the cans of staples such as beans, peas, pickles, corn and other food products that were easy to store on grocery shelves. Not a whole lot of thought went into the design of these labels. The packaging was inexpensive and unimaginative — just basic information slapped on a can.

ALDI became one of the first U.S. retailers to make the leap from private label beans to burgers and bakery goods. Its German parent company brought the concept of private label to the United States in the 1980s to offer cost-savings to consumers.

More than 20 years ago, the principals with the grocer’s marketing agency, Stevens & Tate, proposed a marketing theory to ALDI executives: A smart package design attracts first-time buyers; high-quality product encourages repeat purchases.

ALDI agreed to test the theory by starting with three products: snack crackers, vanilla wafers and chocolate syrup. All three products were experiencing poor sales.

The creative team at Stevens & Tate overhauled the packaging design. Within a short time, ALDI reported that all three products were showing a significant increase in sales.

Based on the results, ALDI asked Stevens & Tate to redo all of the store’s private label packaging. The team took on 80 products, then 100, then 150, and so on — until 100 percent of the store brand merchandise had enticing packaging.

ALDI stores were enjoying an uptick in sales from these changes. The theory had been proved — smart packaging increases impulse purchases.

ALDI’s next challenge for Stevens & Tate was to brand an upscale line of food products. The Grandessa premium line formally was launched with an upscale package design and logo. The project also included display case artwork and a Grandessa Standards Style Guide. Today, ALDI’s signature line includes 78 products that range from German-roasted gourmet coffee to garden-fresh salsas.

Following the immediate success of the Grandessa line, ALDI — with the help of Stevens & Tate — launched Fit and Active healthy living products. This line now has 58 core products and more than 120 varieties geared toward today’s health-conscious consumers.

Today, nearly 20 percent of shoppers expect to buy more private label in the year ahead, a Roper survey says.

Young shoppers, in particular, like store brands, according to Chicago-based Information Resources Inc. (IRI). They expect retailers to help them save money with “functional high-quality” private label products. Young shoppers also are more likely to make impulse purchase decisions — and are less likely to use coupons and circulars or stock up on deals and bargains.

This leads IRI to suggest that traditional advertising media such as TV and print might not be as effective as they once were. To reach these consumers, it is critical for retailers to be more like ALDI — by investing in effective in-store messaging and packaging for private label products.

To read this article in its entirety, click here.