Anyone feeling nostalgic about Zima or Oreo O's can thank Walmart for their comeback. The giant retailer is convinced these old brands have lingering appeal and prodded their owners to bring them back.
Walmart has stepped up investments in its own private labels the past two years. But its growing product-development effort also includes getting branded suppliers to launch – more accurately relaunch – products. That's turned the world's biggest retailer into a nostalgia broker lately.
Walmart's cereal buyer discovered a trend around indulgent cereals, especially as late-night snacks, as well as enduring social-media nostalgia Oreo O's, first launched in 1998 but discontinued in 2005, said Megan Crozier, senior VP-packaged goods, during a tour of Walmart's Culinary & Innovation Center next to global headquarters in Bentonville on Thursday.
So the buyer went to Mondelez, owner of Oreos, and cereal maker Post, and told them: "You need to bring this back. But this time we need you to do it better than ever," Crozier said. The buyer "worked with the suppliers very closely on reformulating it and making the product even better."
The result was relaunch of Oreo O's this week, starting for 90 days exclusively at Walmart, Crozier said.
It's a similar story with Zima, originally launched in the early 1990s and discontinued in 2009.
"We were talking through consumer insights, and we hit on this notion that people want things that are nostalgic, things from their past that remind them of a better part of their life," said Al Dominguez, senior VP-snacks, beverage and impulse. "So we worked with our partners at MillerCoors to generate this idea, really talk them into it and convince them."
Zima isn't a Walmart exclusive, but "we tried to buy as much from MillerCoors as they would allow us to buy" said Dominguez, who believes he's bought about half the limited edition of Zima hitting stores now.
Walmart also heard from customers about how they liked to flavor Zima by dropping Jolly Ranchers candy into it. So the retailer will co-market the brands on social media, he said.
MillerCoors does not plan to follow Walmart's lead on the co-branding; marketing a candy and alcoholic beverage together has the potential to raise age concerns. "MillerCoors has no plans to market these brands together, on social media or otherwise," a company spokesman said. "The company always encourages responsible consumption of our products and has exhibited a long-standing commitment to responsibly marketing our beers only to those 21 and older."
Hershey, which sells Jolly Rancher, also said it was not involved in Walmart's plans. "We are not involved in these specific retailer marketing efforts," a representative said. "We often see retailers coming up with creative ways to merchandise and market brands that are inspired by consumer ideas, from both the past and present. This shows how relevant and popular our Jolly Rancher brand continues to be."
The nostalgia appeal plays out in some of Walmart's recent advertising playing off old rock anthems, too. But Walmart's stepped-up product development effort isn't all about nostalgia or other people's brands. Executives from Chief Merchandising Officer Steve Bratspies on down went to great lengths to highlight increased emphasis on quality as well as price, including extensive testing that goes into Walmart's bargain-priced sportswear and towels. This includes "democratizing" organic foods through lower prices, such as with new organic applesauce pouches.
Latriece Watkins, senior VP-consumables and over-the-counter, showcased private-label products aimed not just at the biggest mass brands, but also emerging players such as Johnson & Johnson's OTX and L'Oreal USA's Matrix salon brand.Walmart has significantly staffed up product development in its baby-care business in the past 18 months, executives said, focusing on everything from pouch meals to baby wipes and strollers, with products priced 25% to 50% below branded rivals.
But Walmart's effort isn't all about knockoffs either. Its own Flower and Hard Candy cosmetics are big sellers, Watkins said. And Great Value is rolling out 28 new flavors of ice cream, more than doubling its assortment to 49 including category-original names like "Break-Up Brownie."
"Aspirational products at disruptive prices" was how Scott McCall, senior VP-home and seasonal, described Walmart's product-development effort. This includes a Keurig K-Cup coffee maker hitting stores now priced at $59 -- $30 or more below prices elsewhere -- and Yankee Candles priced around $10 less than what they sell for elsewhere.