18 May 2017
Health, Convenience and Sustainability Lead at US Store-Brand Expo
Health benefits, convenience and environmental sustainability were the clear battlegrounds, as own-label manufacturers fought to demonstrate added-value and product differentiation at the Private Label Manufacturers' Association Show.
Retailers' own-label goods are big business in the US. Assessing the actual value of the sector, the Private Label Manufacturers' Association (PLMA) recently stated: "Private label's market share has reached nearly 25% of all unit sales in the US and is expanding faster than national brands. In total, the sales value of such labels is now in excess of US$118 billion per annum."
Inevitably then, manufacturers serving this highly competitive and price-driven sector are increasingly under pressure to offer added-value differentiation. In line with this, it was little surprise that increased consumer convenience, health benefits and environmental sustainability were among the most common motifs at the PLMA Show in Chicago.
Health and nutrition was a natural focus for many exhibitors, with several of them offering non-conventional grain ingredients as an alternative to wheat. One company embracing this particular trend was Andriani SPA, a leading Italian pasta manufacturer.
According to Sales Manager Francesco Andriani, this year the company was particularly keen to promote its gluten-free pasta range, especially its enhanced nutrient variety. Explaining the idiosyncrasies of the sector, she said: "Gluten-free is just a characteristic of the ingredients. Corn, for example, is the same as standard pasta; it has no special benefits apart from being slightly different.
"In the case of legume pasta, though, which is also gluten-free, there are some objective plusses in terms of nutritional value. Legumes are rich in protein and rich in fibre, while also being a sustainable crop."
The company has been offering legume-based pasta for a year now and has received a largely positive reaction, partly on account of rising consumer interest in nutritional 'small print'. Acknowledging this, Andriani said: "Consumers now pay attention not only to the claims made by brands, but also take the trouble to read up on the nutritional value of any product – and legumes have great nutritional value."
Another company presenting foods with nutritionally enhanced ingredients was Ontario-based Live Better. Explaining his company's proposition, Denis Barker, Vice-president for Research and Development, said: "We germinate seeds grains and pulses. We do that because that makes for healthier eating.
"When you sprout grains, it increases the nutritional value by a factor as much as 10. It becomes bioavailable, delivering more nutrients that are easier to digest."
Underlining his point, Live Better had on offer a range of chocolate-chip cookies made from sprouted grains. Despite tasting just like normal non-germinated grain products, the company claimed that a single cookie actually had the same nutritional value as about two pounds of broccoli.
While sprouted/germinated grains are suitable for all consumers, some groups have been quicker than others to appreciate the benefits, with Barker saying: "The early adopters have tended to be people with health issues. It could be that they are gluten-intolerant and are looking for alternatives. In the case of people interested in organic and natural products, this also clearly meets their requirements.
"There are also those who are my age and older who and have been healthy for most of their lives. They come to us because they are looking for things that are nutritionally beneficial in order to ensure they remain well as they approach their senior years."
Healthy eating was also the focus for Seattle's Trident Seafood Corporation. Identifying his company's particular niche, Senior Vice-president Matt Christenson said: "The average American eats about 14 pounds of seafood a year, which is quite low compared with the consumption of chicken, beef or turkey. Last year, though, that average went up by a pound, which is pretty dramatic growth. We think that was because people are finally beginning to understand that eating fish is good for them.
"In particular, we see seafood burgers growing in popularly, including the pollock burger, the mahi burger and the salmon burger. It's a category that is definitely set to expand."
As well as health benefits, Trident was also keen to emphasis the wider environmental benefits of consuming fish rather than other animal proteins. Addressing this, Christenson said: "When you look at the amount of effort required for fish to grow in the ocean compared to what you have to do to rear a cow to get meat, it's a wholly different story. We think that, in the future, people are definitely going to eat more healthily and that's why we believe that the consumption of fish will only increase."
Sustainability was another common theme at the event, with many exhibitors keen to point out the reduced environmental impact of their particular products, a message that California's Niagara Bottling, a private-label bottled-water supplier, was only too keen to hammer home. In a niche where product differentiation is difficult, having a positive environmental message is essential, according to Scott Slocum, the company's Southwest Division Manager.
Expanding upon his theme, he said: "Cost and quality are the two key drivers in the bottled-water market. We hit on both of those extremely well, then we add in the fact that we are heavily focussed on sustainability. This drives our overall value proposition.
"Our sustainability model is the foundation of our business. Over time, we've been able to reduce the amount of plastic used in our bottles by 60%."
Another perennial refrain was improved consumer convenience, an attribute many exhibitors laid claim to, particularly with regard to packaging. With soft packaging now seen as having a particular appeal, Indiana-based Todd's BBI International was keen to showcase its range of flexible foil-packed private label products.
According to Dave Koester, a Sales Representative for the Indiana-based company, such packaging was increasingly being used for semi-liquid products, such as cooking sauces. This, he said, was partly due to the amount of serve control they allow, with the required amount of fluid easy to squeeze out of the pack.
Among the other advantages of flexible foil is its ability to survive rough handling with little risk of breakage. Perhaps more importantly for brand owners, though, such packaging offers a near 100% printable area and is ideal for featuring the kind of high-resolution graphics that maximise consumer shelf appeal.
The company was debuting one of its more recent innovations at the event – childproof caps for its soft-packaging range. Although the manufacturers of potentially harmful substances (such as medicines and cleaning products) seldom opt for soft packaging, these safety features attracted considerable interest during the show.
Another packaging innovation that was new this year was a spring-loaded retractable pouring spout system developed by Jumpn'Pour, an Israel-based specialist in flow solutions. Explaining the product's USP, Doron Rigel, the company's Chief Executive, said: "While I could tell you about the technical benefits, the main benefit is an increase in sales due to the differentiation it gives users.
"What I say to all customers is it doesn't matter that it pours better or that it has better hygiene. The important thing is that it is good for doubling sales or, at least, increasing them by 30%."
Although slightly more expensive than simple screw caps, using Jumpn'Pour's spout requires no alteration to existing packaging or to production lines. Highlighting this aspect of the system, Rigel said: "The pop-up pour, as it's basically an insert into the cap, doesn't require any change to the bottle or the cap and, equally importantly, no change needs to be made to the factory filling line.
"It can cost up to $60,000 to change a bottle, so the fact that no alteration is required is a huge plus. A normal cap costs between $.01 and $.20 and the additional cost of using our system is about $.06-$.08 per cap."
A common problem for food producers is shelf life, especially with regard to fresh produce. Looking to alleviate this particular difficulty was California-based True Food Innovations, with a new system said to preserve certain types of fresh food.
Outlining how this particular innovation works, Ashley Shafer, the company's Sales and Marketing Representative, said: "What we do is basically high-pressure processing, with the pressure applied actually six times greater than that found in the deepest part of the ocean.
"The process kills pathogens, with bacteria unable to survive the pressure. This keeps products fresh for 45 days without the use of any preservatives or additives. While the processed product needs to be kept refrigerated, it never needs to be frozen.
"We now have multiple retailers across the US keen to use the system as it ensures their shrink goes down. Everybody is crazy busy these days, so the last thing they want to do is buy something that has already gone bad."
The Private Label Manufacturers Association (PLMA) Show was held at Chicago's Rosemont Convention Center. The event featured more than 1,400 exhibitors from 56 countries, as well as 10,000 registered visitors.
James O'Donnell, Special Correspondent, Chicago