Retail brands: Watt’s in a name?

Private label used to mean low price and low quality.Today these products have a new name, retail brands, and a new brand image that says the only difference is the price, so why pay more?By stocking stores with its own brands,...

Private label used to mean low price and low quality.

Today these products have a new name, retail brands, and a new brand image that says the only difference is the price, so why pay more?

By stocking stores with its own brands, the retailer is getting control of shelf space back and ensuring profitability of that shelf space.

The Watt Group of Toronto has just completed its third, and most extensive, retail brand program for Wal-Mart, the largest retailer in the u.s. with 2,300 stores.

The Great Value line was developed between early January and the end of March. This month, 350 different items are going onto store shelves.

Great Value is Wal-Mart’s everyday low-price brand, in most cases equal in price and quality to national brands.

Last January, Sam’s American Choice products were launched by Wal-Mart.

This line of premium-quality products meets or exceed the standards of the leading national brands.

There are now 100 items carrying the label that honors Wal-Mart founder Sam Walton, who, at first, was reluctant to lend his name to the line.

In 1988, Watt received its first Wal-Mart package redesign assignment for Equate, a line of over-the-counter pharmaceuticals and health and beauty aids.

Great Value is, by far, the largest retail brand program The Watt Group has done.

Packaging for more than 600 products has been designed, with more new items expected to be developed later.

Don Watt, chairman of retail brands, marketing division of Cott Corporation and co-chairman of The Watt Group with his wife Patty Watt, says the project required a full-time team of 24 people.

The Watt Group has been working with Wal-Mart of Bentonville, Ark. since the mid-1980s, designing stores and working on other marketing programs.

Wal-Mart’s Great Value assignment required Watt to bring all of the products sold under the Wal-Mart and other store labels under one umbrella and, in some cases, upgrade the quality to national brand standards.

Watt worked on the package design while Loblaw’s provided the product specifications.

Watt brought Wal-Mart and Loblaw’s together after it worked with Wal-Mart to launch the retailer’s Equate line.

At the time, Watt suggested that Wal-Mart, which was then a general merchandise retailer, should begin stocking grocery items.

He felt that Wal-Mart could capitalize on Loblaw’s success in Canada with store brands and brought Loblaw’s in to consult on the product specifications for what resulted in Sam’s American Choice.

Soft drinks, for example, are not packaged in white, but are color-coded in the easily identifiable traditional colors used by the national brands.

The Watt Group has been designing stores, strategies, packaging of both national and store brands, merchandising and advertising for retailers internationally for 20 years.

Today it is also ideally positioned to handle product specification and development.

About a year ago, half of The Watt Group was bought by Cott, which, at that time, was a supplier of retailer-branded beverages.

The two companies formed Retail Brands International as the marketing arm for Cott’s bottling and other businesses.

Subsequently, Cott bought the bankrupt Amstel Brewery in Hamilton and now produces PC (President’s Choice) Premium Draft for Loblaw’s, which is sold in Beer Stores.

The company also has an agreement with u.s. brewer Pabst to market its products in Canada, while Pabst produces beer products for Cott in the u.s.

Cott has started production of retail brand snack foods in Toronto at Murphy’s Snack Foods, which it recently bought from Weston Foods.

And it makes retail brand household cleaners, such as bleach and window cleaner, at KIK Corporation of Toronto, a Cott affiliate.

Not all Watt’s national brand clients are happy about the firm’s work for retail brands, which are increasingly causing headaches for national brand marketers.

Indeed, last December, Watt was fired by one national brand account on the grounds of conflict of interest.

Watt says Canada is ahead of the u.s. in private branding partly because Canada’s powerful national retailers have never allowed national brand marketers to gain the dominance they have in the u.s. over the regional retailers.

In Canada, private branding burst into the marketplace in 1978 with the introduction of Loblaw’s no-name products.

The packaging, yellow with black lettering, was designed by Watt to follow through with the store design and signage developed by Watt for Loblaw’s stores.

Yellow was used because of the color’s low-price connotation.

Consumers’ demand for premium quality products was answered with President’s Choice in December 1983.

To make President’s Choice stand out in a sea of yellow, packaging was designed with a white background and red, black and blue lettering.

In Canada, Watt has recently designed retail brands for Montreal-based Provigo distribution group, Zel, and Selection Zel premium quality products.

In the u.s., The Watt Group works with 39 u.s. retailers, representing more than $300 billion in sales and having 10,000 stores among them.