Supervalu said Tuesday that it plans to beef up its private label offerings by converting several individual chain brands into one national brand called "Essential Everyday."
The move is aimed at saving packaging costs and allowing for nationwide promotional campaigns, rather than multiple regional ones. Ultimately, Supervalu hopes its new private label initiative will help it catch up with the private label offerings of two key competitors, Kroger and Safeway.
The Eden Prairie-based company already has national private brands -- Supervalu-owned labels -- in the organic and higher-end food markets, both of which were launched in 2008. It has a lower-end private brand, too, that's sold nationally under the Shoppers Value moniker.
But the company also sells products under the brand names of several of its 10 conventional supermarket chains, including Cub Foods, the leading Twin Cities grocery chain, and Jewel, the supermarket leader in Chicago. Essential Everyday will replace the individual chains' product brands.
The new brand's launch will happen in June and include cereal and other breakfast products, as well as pasta and pasta sauce, the company said. Another wave of Essential Everyday re-brandings will happen early next year.
By reducing packaging expenses with the use of just one national label, Supervalu hopes to pass down its savings though price cuts, said Mike Siemienas, a company spokesman. The struggling company has suffered several quarters of falling sales, partly due to pricing issues.
Also, running national advertising campaigns for Essential Everyday instead of multiple brands should save money.
The re-branding isn't without risk: Consumers could miss Supervalu's chain-specific private label brands and shy away from Essential Everyday. But Supervalu says its goal is to "ensure customers know that it's the same product in a new package."
Packaging for Essential Everyday has a "clean, modern and upscale" look, Siemienas added.
Supervalu also plans to launch or relaunch 80 new items under its Shoppers Value label. Supervalu Chief Executive Craig Herkert told analysts that the new private label offensive is expected to deliver a 1 percentage point improvement in private brand sales over each of the next three years.
Private label sales make up 19.3 percent of Supervalu sales.
Mike Hughlett • 612-673-7003