GROCERS PITCH PRIVATE-LABEL BRANDS

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Walk into Ray's IGA Foodliner supermarket in Indianapolis and you'll see colorful banners and shelf cards promoting the first ever "National Store Brands Awareness Month."

And better yet, get $1 off a gallon of IGA milk or get four loaves of IGA bread for $1. When you get home, you'll discover a bag stuffer that describes the quality and value of store brands.

Welcome to the world of private label that is just now discovering the power of marketing.

If private-label products took the country by storm last year, reaching almost $26 billion in supermarket sales, this year will be marked by increased retailer marketing programs to promote store brands.

Some 40,000 independent supermarkets are participating in January's effort, which is spearheaded by the Steering Committee for National Store Brands Awareness Month. The group consists of wholesalers, retailers and private-label manufacturers. Store participation is voluntary.

This heightened private-label marketing activity will put even more pressure on branded marketers to come up with innovative tactics to defend their brands. They have already responded in the past six months by lowering prices, grocery executives claim.

Retailers like Jeff Ray, owner of Ray's IGA Foodliner, believe the time has come to promote private-label brands because of increased consumer demand. For that reason, he decided to participate in the monthlong promotion.

"I'm doing this promotion because people can only get IGA products at IGA, and they can't go to Kroger for them," he said. "It's good recognition and free advertising for the store. Private label has changed. It used to be just cheap. Now, you have quality products at reasonable prices."

The nationwide private-label promotion carries the theme, "A wise consumer shops store brands." The message is delivered by Hoots the owl, who makes the case that store brands equate to value. RF Promotions, New York, created print ads, shelf-talkers, posters and fliers for retailers to educate consumers about store brands.

So far, major chains aren't involved in the promotion, but that will change as the effort gets established, said Roberta Friedman, RF Promotions president.

"The promotion will be a reasonable success this year, but it won't be a runaway success because it came a little late in the planning cycle," said Burt Flickinger III, management consultant with A.T. Kearney Inc., Chicago and New York. "It will be a runaway success in the next two to three years as all major retailers get into the private-label marketing arena."

In fact, giant wholesaler Fleming Cos. this month is rolling out a premium private-label line under the Marquee Premium name. Soft drinks, cookies and other grocery products will be positioned to compete with national brands. As many as 70 items will be introduced this year, with marketing and ad support to follow in 1995.

"It's no coincidence that Fleming is doing this now," said Gabe Lowy, analyst at Oppenheimer & Co., New York "Branded marketers have to be concerned about what's happening in private label .|.|. We are beginning to see the paring of low-return, low-margin products. Vacated shelf space will be allocated now to private-label products or the No. 1 or No. 2 brands, or split between them. Weaker brands are getting pushed aside."M

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Store brands are going on the marketing offensive this month.

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