A successful own brand offer can set you apart and provide a welcome margin boost, but be prepared for some hard graft
From mouth-watering store-made meals to top-quality coffee beans, products proudly emblazoned with retailer-developed brands are becoming increasingly common in independent convenience stores.
Not only do they create a sought-after point of difference from the competition, but they can also have a welcome impact on the bottom line, with greater profits up for grabs.
What’s more, a growing number of retailers are elevating the concept to a whole new plateau; creating brands which are buying them national fame and being stocked by other retailers.
Northern Irish Spar retailers Donna and Stephen Mullan are one retailing duo enjoying increasing success with their footfall-driving, Mullan’s own brand range, which they say is a major driver of the store’s overall sales growth of 8% year on year.
The Mullan’s branded portfolio extends far beyond homemade pies and pasties to include a vast range of food-to-go items, chilled ready meals and, in line with recent shopper demand, an increasing amount of prepared vegetables and meal accompaniments.
“Our own-brand meal solution offers our customers home-cooked style lunch and teatime convenience,” explains Donna.
“We offer family sized mains and accompaniments as well as individual-sized ready meals to take home and heat and eat.
“Our offering is traditional fayre such as pies, lasagne, pizza, pasta plus side dishes, as well as our popular ‘fakeaway’ range which includes Chinese and Indian cuisine.”
However, from quality control to balancing the books, managing a successful own- brand range certainly doesn’t come without its challenges, as Donna explains.
“To be successful and earn shoppers’ trust, an own-brand product needs to be great quality, but perhaps even more importantly, that quality has to be consistent,” she adds.
And with most retailers unlikely to have the time to wield the whisks themselves, producing a range of consistently good products requires an equally high-quality, reliable solution.
For the Mullans that solution comes in the form of dedicated in-store chefs who prepare and pack all products on site in the in-store kitchen.
The on-site operation not only guarantees maximum freshness, it also facilitates responsiveness, with in-store chefs instantly able to react to shopper feedback and demand with recipe tweaks and developments.
Protecting the meatier margins that can be achieved with an own-label brand also requires Donna and Stephen to keep an eagle-eye on raw material costs and price increases. Most of the produce used in the own-brand ready meal range is sourced directly from Henderson Foodservice, while wastage is controlled at 1.1%.
Another retailer with first-hand-experience of how much potential a store-made own-brand product can have when properly managed is James Brundle who, along with his stepbrother Chris O’Connor, has not only launched the Eat 17 branded range, but also the renowned Bacon Jam brand.
While Bacon Jam, which is now stocked in a number of national retailers including Spar, Waitrose, Sainsbury’s and Amazon, is no longer manufactured in-store, the vast majority of the Eat 17-branded range of premium-quality ready meals, sandwiches, salads and wraps still is.
The company also bakes all of its own bread at two of its four sites, including super-premium sourdough varieties.
The fact that it is made on site by specially-trained chefs ensures a consistently high level of quality, James says.
“Our key thing is the quality of the products and we can control that with our own label,” he says. “It brings people into the store and builds loyalty to the brand, which is essential.”
But with in-store kitchens and trained chefs not an option for all, there are other solutions to hand for those retailers also looking to develop an own-brand offer.
Working with a quality ‘white label’ manufacturer is another route to consider, as is forging a partnership with an existing own-label producer or local manufacturer, as Neil Brenson, associate director of the retail branding agency Jellybean Creative Solutions recommends.
“Together you can create a product or hone an existing recipe that you can then brand, package and sell as your own,” he says. “Perhaps there’s a local artisan baker or a vineyard or a sausage producer nearby that you’d like to collaborate with.
“Working with a trusted producer will enable you to create something bespoke and exciting. It will also give you additional trust, confidence and support in terms of how the products are manufactured,” he adds.
Packaging is another key concern, especially in these eco-conscious times when the sustainability of packaging is fast becoming as significant as its appearance, and shoppers are paying as much attention to the outside of packs as to the inside.
“Making sure your product is packaged in the right way is so important,” Brenson says. “Ensuring your product uses sustainable packaging has almost become mandatory for anyone launching a new product to market today.
“There are plenty of packaging partners or off-the-shelf solutions that you can consider, ensuring you are doing right by the environment and that your shoppers are happy to buy into your product.”
For Donna and Stephen, whose own-brand ready meals need to be microwave- and oven-proof, sustainability is proving to be something of a challenge, but it’s one they are rising to.
“We are currently trialling environmentally-friendly packaging, but the challenge at the moment is sourcing it,” Donna adds.
“Compostable packaging is difficult to buy – and is very expensive.
“Recyclable plastic and foil is what we currently use, as well as “re-usable” containers that can be washed and re-used at home to store other food stuffs,” she adds.
One independent retailer enjoying mounting success with his own brand – albeit in a different kind of way – is Simon Dixon, owner of Premier Lower Darwen, in Lancashire. After buying the coffee shop next to his Premier store three years ago, and branding it up as the No 3 Premier Coffee Shop, Simon decided to launch the No 3 brand of ground coffee for customers to enjoy at home. He says: “Customers were really enthusiastic about the coffee we were selling in the coffee shop and in-store self-service machine and kept asking where it was from, so we thought, why not work with our coffee roasters and suppliers Bean Machines to launch a No 3 branded product they could buy to make and enjoy at home?”
The coffee, which is supplied by Bean Machines, is sold in 250g No 3 branded bags which Simon retails for £3.99 – a price point which generates a 25% margin.
“Quality is the key when launching your own brand and fortunately the range really does offer a great quality bag of coffee for a good price, which has become a fantastic footfall driver.”
And with sales on the up, just last month Simon expanded the No 3 range to include two new blends: Aureo, which goes really well with milk, and Maximo, which has a deep, rich, finish.
In fact, it’s doing so well that Simon is also in the process of exploring the idea of launching the No 3 brand on Amazon.
“It’s a bit of a steep learning curve as I need to introduce barcodes and other elements, but the team at Bean Machines are being really supportive. Surrounding yourself with people you can rely on is definitely key in this process. It’s early days, but I think it could have real potential,” he adds.
Harris Aslam, director of Eros Retail, is much further down the road of the own brand concept. He operates seven Nisa-supplied stores, several of which had adopted his Green’s fascia and branded lines.
A positive working relationship with a local butcher has seen Harris launch a ‘Green’s’ branded range of pies and pre-packed meats which he says has been a “great success”.
The success has been so great, in fact, that Harris is in the final stages of developing a new Green’s chilled ready meal range with the help of a quality white label producer – to help the brand enter new and previously untapped territory.
“There are so many benefits to developing your own-brand range,” says Harris. “When it comes to the meat range it’s all 100% Scottish and it’s packed by a local butcher, which people really value. The quality is fantastic, the price points are better and, crucially, so are the margins,” he adds.
“However, there are a lot of challenges and it’s definitely a steep learning curve. More than anything in order to make it work I think you need to be passionate and very clear about what and why you are doing what you’re doing.
“You also need to be patient. Getting your own brand off the ground takes a lot of time, in research, planning, development and marketing, to create awareness. You can’t rush the process as quality would be jeopardised. You also can’t take a one-size-fits-all approach to it. Our stores are in a variety of different demographics, which means that some products which work really well in one store won’t get a look-in in others. For that reason we had to devise different products at different price points for different stores.”
Harris’ own-brand prowess isn’t limited to the Green’s label. Like the aforementioned James Brundle, Harris and the team at Eros have developed a whole new brand with an entirely separate identity: the innovative fizzy slush brand Skwishee.
Thanks to its unique offer, innovative flavours (fruit punch, guava, lychee, pina colada, to name but a few), fun branding and ethical ethos, the Skwishee brand is not just a raging success in Harris’ stores. Less than two years after launch, Skwishee-branded machines now have pride of place in more than 50 other convenience stores nationwide, and the company expects to hit its target of being in 150 stores by the end of July.
Harris and the Eros team’s understanding of the convenience market and retailers’ needs is without a doubt one of the cornerstones of the brand’s success so far.
“Our mantra is that we don’t sell to retailers, we sell through retailers,” Harris explains. “As retailers we understand just how important it is that while the product needs to appeal to consumers, it also needs to be profitable to retailers. From installation to contract terms, we strive to keep that front of mind at all times.”
And while equipment costs remain “high”, the product itself comes with an equally high retail-friendly margin of 60%.
The brand’s “fun” identity is also key to its sales, Harris says. “The slush category is becoming increasingly competitive so we also have to work hard to differentiate ourselves from other branded competitors.
“Keeping the brand as fun and young as possible has been key to that, and we strive to keep it in mind through every element, from new flavour developments to our marketing communications,” Harris adds.
“Social media plays a critical role and we have built up a great response just simply by publicising fun ideas such as edible straws and holding regular BOGOF promotions and bring-your-own-cup events.”
It’s exactly the kind of promotional activity that Brenson recommends. “You need to have lots of fun with your brand and marketing. Get your creative juices flowing,” he says. However, he cautions: “Don’t fall into the trap of over-promoting your brand to the detriment of everything your store is famed for.”
It’s a complex balance to strike, but one which when achieved is clearly worth the effort.
Checklist to ensure brand success
Pointers from Neil Brenson, associate director of Jellybean Creative
- Identify the consumer need: What’s on trend and in demand in your store?
- Create a point of difference Creating a USP for your brand will encourage consumers to buy
- Taste is everything: Carry out lots of consumer testing before any products actually launch in store
- Packaging is Key: Ensure your brand stands out on shelf and catches the shopper’s eye, and remember environmental concerns over packaging, too
- Price points: Make sure the profit margin you want is realistic
- Try before you buy: Sampling as part of a launch event is effective
- Marketing matters: Use your social media channels to let customers know you have an exciting new brand launching
- Test and tweak: Listen to customer feedback and dedicate time to think about how your brand can be improved and evolve.