Friday, May 9, 2008

Retail Marketing Memo: Safeway Uses Mother's Day Holiday to Launch its New 'mom to mom' Store Brand Baby Products Line in its Stores

Safeway Stores, Inc. is adding a brand new store brand to its already impressive line-up of food, grocery and non-foods store branded product lines.

Joining such Safeway store brands as its upscale Safeway Select and O 'Organics food and grocery brands, it's value-priced Safeway brand, its Signature Cafe prepared foods' store brand and Eating Right health and wellness brand, is mom to mom, a branded baby products' line of over 80 items, including disposable diapers, infant formula, baby wipes, toiletries and more.

Safeway Stores developed the mom to mom baby line with the help of real moms, according to James White, the supermarket chain's senior vice president for consumer brands.

White tells Natural~Specialty Foods Memo Safeway developed the 80-plus item baby products' line based on extensive research and conversations with moms about their babies, their lives and motherhood.

In the research and conversations with the real world moms, White says the concepts of "gentleness" and "ease-of-use" were the two key variables or take-aways from that process.

"The mom to mom line reflects the truth of the adage 'Mother Knows Best," White says in explaining how Safeway created the products based on the input and feedback from the mothers who participated in the brand's development.

As an example of what Safeway learned about the importance of ease-of-use from the moms, White says the mom to mom brand baby wipes for example are hypoallergenic and come in a flip top package with an extra-wide dispenser, making them easy to access with one hand by mom when she's feeding or changing her child's diaper. This design attribute came directly from the research with the real word moms, White says.

Safeway has chosen Sunday, May 11, to introduce the mom to mom store brand in its 1,740 supermarkets in the United States and Canada. We like the timing.

The real world moms, who's input was used extensively in designing the over 80-item baby products' line, also will have their say in Safeway's in-store merchandising of the brand.

The retailer will use parenting tips from experienced mothers on its mom to mom brand in- store point-of-purchase displays. Shelf talkers featuring these parenting tips also will be used for each of the items shelved throughout the store.

Among the tips provided by real world mothers for the displays and shelf talkers include this one: "Read to your little one everyday. It's great bonding time, and it will help prepare her for school."

The baby products line will be sold exclusively in Safeway-owned stores. There are currently no plans to sell the items to other retailers like Safeway recently announced it will do with its O' Organics and Eating Right brands. [Read our recent piece on that development here.] Not yet at least.

We say not yet because we believe it's Safeway's strategy to eventually do the same with the mom to mom brand if it's successful in the grocer's 1,740 supermarkets.

The O' Organics brand proved successful in the stores over a one year period. The brand is less than two years old and Safeway is already planning to license it to other retailers and wholesalers internationally, as we reported here on April 28.

Further, the Eating Right health and wellness brand is barely a year old, if that, and it's been so successful according to CEO Steve Burd, Safeway decided to include it along with O' Organics in its new brand marketing venture.

We suspect the retailer to look at the mom to mom baby products' brand after about a year and evaluate whether or not it too should go into the brand marketing partnership its created to market, license and sell O' Organics and Eating Right in the U.S. and internationally.

As we've discussed on Natural~Specialty Foods Memo before, Safeway Stores, Inc. is evolving from being a retailer only to being a brand marketer in general, as well as a marketing-driven food and grocery retailer.

In addition to its new brand marketing venture described above, the company also has build its Blackhawk gift card business into a substantial entity.

Additionally, Safeway has created a small division in which it will assist other companies in saving money on their health care costs by using some of the innovative market-based measures its created to keep its own corporate health care costs from rising as high as most other U.S. supermarket chains and corporations in general have

Safeway had among the lowest increases in corporate health care costs among U.S. corporations in the last two years thanks to a number of innovations the company has made in how it offers and handles employee health care and insurance.

Safeway also continues to improve its online/home grocery delivery division. It's the leader in home grocery deliver via Internet ordering in most of the markets where it offers the service.

The San Francisco Bay Area-based brand marketing-driven grocery retailer also continues to brand all of its in-store prepared foods offerings.

For example, it's private label deli meats now carry the Primo Taglio brand, its in-store prepared foods offerings sport the Signature Cafe brand, it's fresh beef is branded as Ranchers Reserve brand, and its most upscale and premium fresh bakery items and other specialty products have been branded Safeway Select Artisan.

Safeway also has extended its O' Organics brand into fresh produce and fresh poultry, and its Eating Right brand into the fresh produce, refrigerated and prepared foods categories.

The grocery chain also is expanding the variety and quantity as well as upgrading the look of its value brands, such as its Safeway brand for grocery and non-foods products and its Lucerne brand for dairy goods.

Safeway also recently created a "branded generic" grocery and non-foods brand called Basic Red. The minimalist-looking yet attractive package, which appears on basic items like toilet paper, paper towels, napkins, facial tissues and other grocery and non-foods items, has a simple red, round circle on the package with the words "Basic Red" in white against the background.

The supermarket chain has been promoting Basic Red brand items like 4-roll white toilet paper and 50-ct packages of white napkins for 10 items for $10, or $1 a package. This is part of the value package offering Safeway said it would start doing this year in its Lifestyle stores as it begins to close in on its goal of converting 100% of its supermarket format stores in Lifestyle format markets. The company says it's about 70% finished with that massive project to date.

The increased emphasis on the store value brands, while at the same time creating and positioning more upscale brands, also has much to do with the state of the economy in the U.S. as well as the soaring food price inflation currently occuring in the nation, Safeway CEO Steve Burd told Natural~Specialty Foods Memo earlier this year.

Burd says consumers are trading down and buying far more store brands in Safeway's stores than they are national brands. He says Safeway is enhancing its value brand offering to stay competitive with the big box discounters like Costco and Wal-Mart, while at the same time offering shoppers its upscale and organic brands for lower prices than comparable national and regional brands.

With its growing brand marketing emphasis, coupled with its evolving Lifestyle retail format, Safeway's positioning could be summed up as the store is the brand, and the brands are the store, in our analysis and observation.


>Safeway has created a seperate webpage on its corporate website for the mom to mom brand baby product's line. You can view that webpage here.

>You can learn more about Safeway's market-based healthcare reforms by viewing a video of a presentation CEO Steve Burd gave at the recent annual Food Marketing Insitute (FMI) convention held this year in Las Vegas, Nevada. There's a link to the video here.

>If you want to take a look at some of Safeway's store brands mentioned in our piece above, you can take a look at the grocery chain's weekly advertisement here.

>Safeway donates about $154 million a year to various charities throughout the U.S. and Canada through its Safeway Cares charitable organization. You can learn more about the organization and its charitable giving here. Many of the retailer's donations go to organizations helping mothers and their children.

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