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It’s been almost 30 years since it launched, and I still can’t think of a private label product that

defines innovation like Loblaws’ President’s Choice “Decadent” Chocolate Chip Cookie. Loaded with chocolate chips. Made with creamery butter. It blew away the national brand in taste tests and became a huge hit with consumers.

Better yet, it became an icon of innovation for the business and helped crystallize its commitment to product innovation; a commitment that still serves the business well, as President’s Choice is one of the most iconic private brands worldwide.

Unfortunately, there aren’t that many other home runs in private label product innovation out there, which is why product innovation remains one of the last strongholds of national brands over private labels. And when innovations do happen, they lack the marketing muscle behind them to really make an impact on consumers, either through weekly flyers or in the stores.

Beyond innovation driving new products, there is also the equally important goal of improving the quality of existing items. When was the last time you saw the claim “new and improved” on a private label package? It’s a rare sighting. Maybe product improvements are happening, but very few retailers are getting any credit for it. Promotion of innovation and new items should be permanent marketing programs, NOT one-time events.

So, what holds back most retailers from a healthy dose of innovation in their private label portfolio? Many would say that commitment and investment from the organization is lacking, so they are at the mercy of what their brokers and suppliers bring to the table. In many cases, this holds true. But innovation should

be a proactive activity for retailers, not reactive. I’m amazed to learn that “product development and innovation” aren’t even a structured part of some retailers’ private label programs…they simply wait for innovation to fall into their lap.

Innovation should be based on clear brand direction and an in-depth understanding of where trends are heading and where the opportunities lie. Delivering these insights should be the retailer’s responsibility, working with suppliers to identify trends and opportunities that are most important to driving their brand message – for example, convenience and healthier alternatives (snacks, fortified foods, etc.) should be on the radar of private brand directors at every grocery retailer.

And remember, innovation doesn’t have to be about what’s inside the box. Advancements in the ergonomics of

physical packaging also can motivate purchase behavior – I’m still waiting for re-sealable cereal packaging and portion-controlled milk dispensers…and which retailer is going to be first to embrace refillable stations for laundry detergent and pet food as part of their private label offering?

If you think you might be lagging behind the innovation curve and want to know how you currently stack up, I’d suggest you ask yourself a few questions:

• How does the range of your private label programs compare to the range of your immediate, closest competitors?

• How many new items have been added to the private label portfolio in the past year?

• How do consumers score your private label programs on “innovation”?

Product innovation in private label is not only about delivering against the current needs of the marketplace; it’s about creating enthusiasm for your overall brand, signaling to consumers that you are a progressive retail destination that offers new and exciting items every time they visit. It’s not just about committing to innovation; it’s about getting credit for it.

BY PATRICK RODMELL

Guest Commentary

THE 10 KEYS TO PRIVATE BRAND SUCCESS:KEY NO. 6: PRODUCT INNOVATIONCommit to innovation; and get credit for it.

Patrick Rodmell (prodmell@wattintl.com) is president and CEO of Watt International, a Toronto-based integrated retail agency with more than 40 years experience in more than 40 countries around the world. The company is well known for creating such landmark private brands as President’s Choice, Great Value and Safeway Select, and more than 100 other private brands world-wide. To read the first five of Patrick’s keys, go to privatelabelbuyer.com and look in the PLBuyer Voices section.

The benchmark for private label innovation.

PLBUYER JUNE 2011 The Ten Keys to Private Brand Success

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