« May 2007 Table of Contents
Trend Watch: Building a brand
Private label, value-added seafood spurs corporate growth
By Lauren Kramer
May 01, 2007
Walk into any major grocery store and the diverse number of
private-label food products leaves no doubt the category is
growing by leaps and bounds. The total U.S. market for
private-label foods and beverages was $48.4 billion in 2006, a
12.9 percent increase from 2002, according to a January 2007
report by Packaged Facts, a division of MarketResearch.com. The
report, "Private Label Food and Beverages in the U.S.,"
predicts retail sales of private-label foods and beverages will
reach $56.5 billion by 2011.
That growth is reflected in private-label frozen seafood,
which in 2006 increased 35 percent in dollar market share
compared to the previous year.
"Consumers are no longer interested in simply making a
sandwich," says Brian Sharoff, president of the Private Label
Manufacturers Association. "They're looking for meal solutions.
In the private-label category as a whole, there's been a shift
in emphasis from price to quality, and the key to that quality
is that it's value-added."
Matt Mariani, CEO of MS Intertrade in Santa Rosa, Calif.,
couldn't agree more. His company, which produces Sonoma
Seafoods, has private-label seafood accounts with "two of the
largest natural and most unique grocery chains in the country,"
- though Mariani refused to divulge their identities. "Private
label constitutes 40 percent of our sales for value-added
seafood items, and it was how our company began 15 years ago,"
MS Intertrade produces a variety of stuffed fish, including
salmon, sole and crab cakes, as well as portion-controlled,
fresh and frozen seasoned and marinated fillets. "Retailers are
trying to build consumer loyalty around their private-label
products today and change consumers' perception of them from
being of generic quality to being premium and value-added,"
"For example, 15 years ago private-label seafood might have
consisted of some breaded fish sticks or portions and some
bagged shrimp. Today, by contrast, it could be anything from
fire roasted and seasoned shrimp skewers, to mahimahi with
mango macadamia stuffing. There is probably still bagged shrimp
in the lineup, but it is now in a re-sealable standup bag with
art and graphics that would rival any of the national
The category has seen a drastic increase in its breadth and
marketing resources over the years, says Mariani. "That's
primarily because major retailers came to the conclusion that
they could use their private labels to build customer loyalty,
as opposed to having them purchase a store brand simply because
it was cheaper."
Building brands is an important component of this, confirms
Steve Young, president of Bistro Fresh. His company produces
private-label seafood for Hannaford Bros. and Whole Foods
Market, including ready-to-cook meal solutions in 30 varieties,
for oven, microwave and barbecue.
"We work directly with retailers, presenting menu ideas to
them and helping them define their menu options," says Young.
Bistro Fresh's oven-ready products include a Mexican-style
seafood dish, the Tilapia Taco, which consists of tilapia with
Mexican salsa, cheese and crushed taco shells. The frozen
microwave product line includes Thai Curried Shrimp, which
features shrimp, snap peas and rice with curry sauce that cooks
in three minutes.
While private-label foods and beverages are not the primary
draw for shoppers to visit a particular retailer, they can act
as a linchpin in the total shopping experience and strengthen
customer retention and loyalty, according to the Packaged Facts
report. Therefore, consumers' trust in the private-label brand
is a pivotal factor.
"The consumer has to have an expectation of the quality they
will receive when they purchase that product, and then the
product has to perform to that expectation," says Young.
"Retailers need to define the brand for the consumer through
marketing and consistent execution, so that over time,
consumers will come to understand what that particular
private-label brand means, making line extensions easier to
To transform your private-label products into a brand, you
have to add bells and whistles, says Sharoff. "I think almost
every major supermarket chain in the United States and Canada
has created a value-added, high quality private label for
themselves, but it's epitomized by Whole Foods' 365 brand, and
by Trader Joe's brand."
As the demand for private-label seafood grows, companies are
looking for ways to differentiate themselves and their
offerings. For Blue Horizon Organic Seafood Co., it's
sustainable and organically farmed shrimp. The Aptos, Calif.,
company started supplying product to national brands four years
today, private label constitutes 50 percent of its
sales. Blue Horizon's repertoire of products includes
value-added seafood, including organic versions of Coquilles
St. Jacques and Panko-Breaded Shrimp.
"Over the past year, I've seen an accelerated, almost
overwhelming demand for sustainable private-label seafood,
driven by the coverage of the health of our oceans," says John
Battendieri, Blue Horizon's CEO. "Once the U.S. Department of
Agriculture has organic aquaculture standards in place, we
predict a huge increased demand for [USDA-certified],
organically raised seafood, particularly in the private-label
category. Once those standards are in place, the customers will
There is plenty of opportunity for innovative offerings in
value-added, private-label seafood items, and it's easy to see
why this segment is growing rapidly, says Young. "Seafood is an
increasingly important part of most Americans' diets, yet they
still have limited knowledge on what to do with the product
once they get it home. Private label-seafood packaged in meal
solutions offers both retailers and consumers a win-win."
Contributing Editor Lauren Kra m er lives in British