Cover Story

Customer-Centric Safeway Is Throwing Its Weight Around in Private Brands

The brand managers at Safeway Inc. do not manage private label products and packages, they manage consumer brands. And maybe more importantly, they manage quality products and packages that build consumers' trust in Safeway products. With the ambitious and successful introduction of the O Organics line of 150 products in Safeway stores last year, Safeway's top brand managers were further convinced of the power of their brands.

Today, led by senior v.p. of consumer brands James White, they are implementing a bold plan to the revitalize the 4000+ store brand items that have made Safeway as powerful as any CPG company. Possibly the boldest idea is to consolidate 70 private label brands under their strongest 10 "Power Brands," and to refine the packaging in each brand. One of these Power Brands is Safeway SELECT™, a line of premium products introduced 15 years ago and now undergoing a package redesign rollout.

Safeway consumer relevance

White explains how the Safeway Select brand and packaging made it the first Power Brand for Safeway—and will reestablish its power again. "Design is playing a critical role in building brands for Safeway," White says. He is overseeing the company's entire Consumer Brands organization including its marketing, manufacturing, finance, and outside sales functions. Prior to joining Safeway, White was with the Gillette Company where he spent three years as senior v.p. for business development, North America.

Safeway was careful to retain the traditional spirit and wholesome "meaning" of its Lucerne line of dairy products during its recent, complete packaging redesign.

In all their package design work, Safeway aims for clear, clean presentations. "We're trying to be very telegraphic with benefit messages," says White. Many of the longstanding Safeway™ "S" Brand packages now feature icons to help consumers make the right choices for their needs. These icons are consistent across categories for easy recognition and serve to educate, inform, and solve problems for the consumer.

"Our goal is to make the shopping experience simple and straightforward," says Matt Miller, v.p. of marketing/brand strategy & development at Safeway. Miller brings his 11 years of experience at Nestle to set the strategic direction of Safeway's branded business in terms of brand management strategy, channel and consumer marketing strategy, and the development of integrated and comprehensive marketing plans for the Safeway brands.

Safeway's well-thought-out portfolio strategies have kept the buying public from perceiving the company as a "generalist" trying to capture a very broad market. Instead, consumers see the brands as offering great value propositions that speak to their needs. The goal now is to take that to the next level and refine their 10 Power Brands into true consumer brands that are as strong as any other brands.

Miller sees Safeway's strength as merging traditional brand-building CPG strategies with their private label expertise, their knowledge of retail environments, their broad understanding of shopper behavior, and their package design discipline. Like any brand, if you deliver on the promises of the brand and package, consumer confidence in the brand grows.

Researching the possibilities

The 10 Power Brands will grow in strength as consumer brands as the products and brand convey real "meaning" to the customer. "We want our brands to play a critical role in consumers' lives," White says. "We have great insight into our own shoppers."

White points out how the well-established Lucerne line of dairy products already had great meaning to Safeway shoppers and how they preserved that meaning. The Lucerne name was trusted for being wholesome and having consistently high quality. When updating the brand logo and packaging recently, the packages were designed to be both comforting and informative.

Miller believes design is central to creating meaning and consumer relevance. "It's critical for us that our package uses design to walk people up the brand architecture that communicates the key brand benefits," Miller explains. Safeway works closely with trusted design partners for the graphic designs that will achieve this every time.

Safeway also uses trusted research partners for qualitative and quantitative studies of consumer motivation. Miller says that the Safeway consumer research is often exploratory, to discover how consumers perceive what is already on the shelf and determine the emotional and rational keys that they respond to. The biggest challenge, however, is identifying the additional new opportunities to connect consumers with packaging, especially because these will be different in different categories and subbrands.

Safeway has come to expect that they will adjust certain elements to account for the nuances that consumers might respond to. In a high-volume design environment, it's necessary to have a system or template in place, but also allow for several options when approaching new design projects. Miller says their objective is to assure that they really use design to speak to the specific insights behind each category.

Lessons of O Organics

David Kessler, Safeway's director of package design, explains that the cohesive brand message for the 150 O Organics products was: An organic product for everyone. "As a company, we're trying to act much more as a CPG company," Kessler says. He manages the package design of Safeway products, sources packaging materials, coordinates production, and assures quality control.

Since the O Organics line with its vibrant colors was rolling out so many products in a short time, the challenge was to be consistent across all substrates without short-changing shelf impact in any one particular category. Kessler says the single-mindedness of project teams was necessary to make the right design choices in each category. "Solving the problem was controlling the prepress as much as possible," explains Kessler.

Safeway is revamping the packaging of its premium Power Brand, Safeway Select, to have consistent sophistication across many categories.

Certain design decisions still had to be made based on maximizing printing capabilities, considering how products would be arranged together on the shelf, determining whether illustrations or photographs would work better, etc. They knew their options because they controlled color reproduction closely and knew the exact printing production values at different printing houses. Kessler says this showed him "the value of really doing your homework, really understanding the challenges with all the information up front."

One lesson that Kessler has made policy is to bring in all the key players early on in the process. It is important to get all the information out in kickoff meetings with as many key players as possible. "There's a lot of experts brought to the table with historical knowledge," Kessler explains. These experts know the questions before they are asked and can anticipate potential pitfalls.

Miller agrees that it is key to have cross-functional teams communicating early on. Miller says that Safeway has come to appreciate both the power of great design and the value of bringing creative people into the process as early as possible. White also feels it is essential to have design at the front of the process. He believes the process should be more iterative than linear, with multiple teams contributing to refining an evolving design.

Wrapping it up

Safeway is also investing in the retail environments inside Safeway stores, improving merchandising and lighting, and developing more "lifestyle" stores. They are creating a superior shopping experience by emphasizing product authority and product clarity through package design. Miller explains that a multi-category store brand's package design can be both consistent and variable because there is flexibility in the three, four, or five zones on a label or package. Consumers can respond to the key motivators in these zones while still finding reassurance and relevance in the brand architecture.

As the Safeway brands grow into consumer brands, package structure differentiation is increasingly becoming part of their strategies. Safeway used a great deal of glass in the O Organics line partly for the shape and structure differentiation, but also for several other reasons. For one, promoting sustainability and recyclability in the O Organics line seemed a perfect fit. In addition, there are many consumer conceptions about food and beverage products in glass.

"There are certain categories where glass will signal to the consumer freshness, taste, and premium," White emphasizes. He says that consumers have been pleasantly surprised with the uniqueness and quality of the O Organics line. "The critical anchor for whatever we do is the quality of the products," says White.

White is proud of and somewhat amazed by the success of the O Organics products. Safeway succeeded in building a dominant brand from scratch in about one year. The next logical step is to start introducing new first-to-market products under their 10 Power Brands. White does not view his job much differently than the owner of a CPG company managing consumer brands, and there's no reason the Safeway consumer should either. As Kessler puts it, "You have to find out whether you want to follow a crowd or lead one."