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CANASTOTA, N.Y. -- During this economic downturn, retail industry experts have proclaimed that those businesses investing and innovating during the tough times will be well positioned when economic prosperity returns. And while this can be easier said than done, the Nice N Easy Grocery Shoppes convenience store chain is making it look simple as it tackles an initiative closely aligned with current retail trends -- expanding its private label options.
In 2008, Nice N Easy Founder and President John MacDougall gave his team the direction to explore expanding the chain's private label offering, as several market research firms pointed to the growth of private label due to tough economic times and the items' evolution "from being absolute junk to being quality products that people are buying, and not just to save money," Jared Sturtevant, director of category management for Nice N Easy, told CSNews Online in an exclusive interview.
"We also watched the success that other retailers, mainly larger formats, have had with private label, and the quality of the products and packaging they introduced," he said. "When done right, private label can help build a brand and that is what we are using it to do."
Within the past year, the chain rolled out four new private label lines -- Easy Street Bakery packaged sweet snacks hit shelves in August with 15 SKUs; a zero-calorie isotonic with aloe launched in September under the brand n7 Restorative Hydrating Drink, with four flavors packaged in 32-ounce bottles; 12-ounce, shrink-wrapped bags of Easy Street Coffee for home brewing rolled out in House blend, Decaf and Dark Roast in September; and in April, Easy Street Gourmet Snacks Kettle Chips appeared in stores in 6 flavors and 2-ounce bags.
"Anything we consider adding to our private label portfolio has to mimic a fast-selling existing item, and has to have the potential to contribute something to our brand, and certainly can not detract from our image," said Sturtevant on the selection of these four product categories as private label candidates. He added that the most recent introductions are branded "Easy Street" -- the name of the chain's foodservice offering -- rather than "Nice N Easy Grocery Shoppes," as its Easy Street Eatery foodservice brand "translates better to the packaged goods we have introduced. It creates natural foodservice bundles and resonates well with our customers who know Easy Street means fresh and delicious."
Another reason these product categories were chosen for private label introductions were to improve the profitability of these areas. "We have selected categories that we feel we are being held hostage by direct-store delivery (DSD) vendors with questionable service and terrible profit margins. This was our way of taking off the handcuffs -- this do-it-yourself approach has improved our presentation and margins," he said.
In addition to adding new private label lines, the convenience store chain also recently revamped its existing private label bottled water line -- which is its No. 1 selling water in stores -- with updated packaging and a shrink-wrapped case option. The previous label was dated, with a "psychedelic" look to it and an older company logo. The updated label features its new logo, the addition of the word "natural" as a product descriptor, its Web address and improved background imagery including an icy mountain lake that "suggests it is cold and refreshing," said Sturtevant.
This Private Label Went to Market
To bring the chain's latest proprietary product line to market, the Easy Street Gourmet Snacks Kettle Chips, Sturtevant spent a year conducting research and speaking with brokers, chip companies and other retailers. After finding that no local or regional brands were the right fit for Nice N Easy, and realizing that many companies wouldn't cater to a chain under 100 stores, Sturtevant attended the 2009 All Candy Expo with the goal of finding a company that specialized in private label chips.
"Being a smaller chain, we don't have as many options as other retailers. First, we have to find a company that has obtainable minimums. Next, they have to have great product and a respectable resume," he explained. "It hasn't been easy, and in my opinion it's quite remarkable that we, a 78-store chain, have been able to launch four successful private label lines in two years."
Fortunately, Sturtevant achieved his mission at the convention, and spent the next year developing the line.
"We had a clear focus from the beginning. We wanted kettle chip because they are known to be handcrafted, made in small batches and are wildly popular," said Sturtevant. "We steered away from extruded snacks (puffs) and plain chips in the initial launch because they are perceived to be cheaper and less authentic."
The six kettle chips flavors were chosen based on Nice N Easy's scanned sales and manufacturer recommendations that matched its ranking. One flavor, Garlic Parmesan, wasn't on the team's radar during initial flavor discussions, but the chain's founder, MacDougall, specifically requested it. And during the first few weeks, the flavor was the top seller in the line. One of the flavors that didn't make the initial cut was sour cream and onion, though it is being added to the lineup and expected to hit shelves in the coming weeks.
Package design was based on the chain's Easy Street Eatery logo, and its development was a collaborative effort between the manufacturer's artists and Sturtevant, who has a background in art.
In the future, Nice N Easy plans to introduce a take-home size package of its kettle chips and expand the flavors of the 2-ounce bags, before venturing into plain potato chips and pretzels, according to Sturtevant.
These Private Labels Bring Home the Bacon
Beyond addressing consumer shopping trends toward value and helping build the Nice N Easy brand, the chain's private label lines are improving category margins and in some cases, outpacing the national brand equivalents.
The chain's Easy Street Bakery packaged sweet snacks line, for example, replaced a national brand when it was launched last year. Currently, it has higher margins and is trending ahead of the previous offering, though it has fewer SKUs. The proprietary snack line includes Danish, muffins and cakes, with the Danish being customers' favorite.
In addition, all four flavors of Nice N Easy's n7 isotonic drink are outpacing Powerade Zero, the only other calorie free Isotonic available, according to Sturtevant.
But perhaps what is most impressive is the performance of the chain's kettle chips, which are outselling Doritos, Sturtevant said. All six flavors of the Easy Street Gourmet Snacks Kettle Chips are in the top 14 SKUs in terms of unit movement for all salty snacks in stores, and the 2-ounce Salt & Vinegar SKU is the chain's No. 1 overall salty snack SKU, he noted.
"All of our private label items are premium products, and are retailed in parity to national brands. Before we began to expand private label, the goal was set that we would launch premium brands to complement the image of our stores and our Easy Street Eatery, which is basically private label, being that it is our proprietary foodservice offering," Sturtevant told CSNews Online.
Nice N Easy's private label lines are promoted extensively in stores, including in-store point-of-sale, exterior signs such as bumper boards and island merchandiser units, complimentary coupons tied to another purchase, foodservice bundling, and displays and racks. Outside the store, the lines are promoted using direct mail advertising and online via its recently launched Facebook fan page.
Nice N Easy also found its private label brands are useful marketing tools outside the stores. Besides day-to-day product donation requests, the chain has used its private label items to market the brand at area events. Last summer, Nice N Easy Grocery Shoppes Natural Spring Water was the exclusive water of K-Rock-A-Thon, a modern rock festival drawing approximately 15,000 fans, said Sturtevant.
Moving forward, the c-store chain plans to expand its Easy Street Gourmet Snacks brand with a line of trail mixes and nuts carrying the same logo as our kettle chips. Two trail mixes as well as the peanuts, pistachios, almonds and cashews are a gourmet product that demands a decent price, as well as being an "easy sell and a healthy snack," said Sturtevant.
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