Grocery Girl: The Private Label Conundrum


Last week, I was welcoming a team from a sauce company. I escorted them and their heavy sauce-filled suitcases to my grocery store's kitchen. As our team sautéed veggies and mixed marinades, they got to work cooking up straightforward dishes that would feature their products: honey buffalo sauce, sweet Thai chili sauce, bourbon barbecue sauce.

We then wheeled over big, steaming trays in a shopping cart to the conference room in corporate HQ, where a bunch of execs and buyers and myself awaited to taste, discuss, and decide.

We dipped shrimps in their cocktail sauce. We sampled meatloaf slathered in their country ketchup. We scooped up a saucy chicken stir fry. There was some kind of ground meat with corn sauce that I didn't attempt to eat. It looked beige and menacing.

They explained that they chose chicken, beef, and pork as sauce vehicles because they want to sell their sauce as a "center of the plate" fixture. Sure, dipping crudités and dressing salads is all good and well. But merchandizing their products as dinner mainstays moves a lot more bottles.

Putting Our Name On It

With the economy hurting, private label sales are booming. Why buy the big brand pancake mix when the store brand alternative costs half the price? Especially when the ingredient lists are virtually identical.

Private label products get lower price tags, with hope they'll fly off the shelves. They tend to be staple goods: flour, butter, grains. My store is an exception. We pioneer ourselves on private-labeling stupendous extra-virgin olive oils and vinegars, which means we can ship big barrels from incredible European producers, bottle the contents and label it ourselves, and sell it for a steal. Great for our customer, and great for us.

As far as pantry staples are concerned, we're a newcomer into the private label scene. We focus on serious foodie stuff, and leave the rest for the big brands. But as we grow, our ethos is shifting a bit. If people are going to have a jar of teriyaki sauce in their kitchen, it might as well be our teriyaki sauce. After all, we've got to compete with the big boys.

That's one line of thought among our company's decision makers. The other is: no way. It's not us. We're better than that. Elitism? Maybe. But we pride ourselves on being a serious cook's mecca. These sauces are anti-serious cook. They represent the 30 minute-ization of the dinner cooking ritual. Buy some meat. Buy a bottle of sauce. Cook and glug, glug, glug. Call it a day.

The sauce taste test results were mixed. They were all-natural products, but still staggeringly sweet. Although the ingredient list reads like something one might whip up at home (spices, sugar, herbs, garlic) the flavors were one-dimensional and overblown. The food tasted soulless. Maybe because it was.

Private Label 101

There are two private label paths. The first is to find a company that makes something you love (wild rice, roasted cashews, or whatever) and strike a deal with them to manufacture wild rice/cashews under your market's label.

The other is to start with your own recipe or product: your mind-blowing pesto, your killer granola. Then you find a manufacturer to make it for you on the right scale, put it in a pretty package with your name on it, and ship it back to your stores.

We were toying with option two. Despite the naysayers' protests (and I fall in their camp), it is a bit of a no-brainer. The costs were just so low, the potential for profits so high. And the sauce people are willing to tweak their formula, add a little less sugar, a little more oomph. Even make their product kosher for us. Now we're talking.

When you put your name on something, you are really getting behind it. People trust us enormously, and we don't want to jepordize that. Who knows if you'll see my store's this-and-the-other glaze, marinade, dressing, dip, or sauce on the shelves sometime soon. There are still contracts to be drawn, lawyers to do their thing, and the cynics to persuade.

And maybe, it's not the worst thing in the world to get your dinner sauce in a bottle. If that makes the difference between throwing some chicken in the oven and heading to fast food-ville, I say buy the sauce.