Safeway Creates Destination Products

Signature soup is another destination product. Safeway sources the line exclusively at retail from a restaurant supplier of white tablecloth restaurants.

Proprietary brands play a pivotal role in new $100 million Ingredients for Life marketing campaign; select store brands team-up with Disney stars in ground-breaking promotion.

     SUPERMARKET LEADER

"With this campaign, Safeway positions itself as not just a supermarket that sells ingredients for meals. It proudly offers Ingredients for Life," says the company in a news release announcing the new campaign.

To implement new Ingredients for Life strategy, Safeway has been remodeling existing stores and opening new stores under its new "Lifestyle" format. Safeway describes this format as offering an inviting décor with warm ambiance and subdued lighting that highlights its high-quality fresh products. The Lifestyle format also includes some unique product offerings including a large selection of natural and organic foods, full-service meat counters, full-service bakeries and floral design centers, as well as sushi bars and olive bars.

Destination Brands

Rancher's Reserve is Safeway's proprietary brand of tender Angus beef. It is positioned as a destination product that draws customers into its stores.

"As we look at the new brand positioning, I view Ingredients for Life as the culmination of work that we have been doing for several years now," says Brian Cornell, executive vice president, chief marketing officer. "It started with the focus that we put on our perishables, and the creation of a number of our proprietary brands like our Rancher's Reserve beef program and our Signature soups, salads, and sandwich program.

"It also encompasses a number of efforts that we have undertaken in the center of our stores to bring new innovative brands to our consumers who we believe are looking for a complete shopping experience."

In particular, Cornell believes that it is critically important for Safeway to become known as a destination for high-quality brands in perishables.

In the case of Rancher's Reserve beef, says Cornell, "we can guarantee our consumers the tenderness of that beef. And the only place they can find Rancher's Reserve is in one of our Safeway branded stores."

To insure the product's tenderness-which is the most important attribute when it comes to beef-Safeway works with an exclusive supplier and employs an ongoing monitoring program that includes a 90% approval standard. "In fact, we are seeing that 98% of the time we are providing our shoppers with a product that they consider tender," points out Cornell.

In the case of Signature soups, Safeway works with an exclusive supplier that services white tablecloth restaurants. "So when we talk about Signature soups to our shoppers, we really position it as restaurant quality," says Cornell.

Consumer-Driven

The task of developing new proprietary products for Safeway falls to Doug Palmer, vice president, corporate brands. "When we look at new items and new programs, it is important that we establish what are the current and future consumer needs and trends," says Palmer. "We spend a lot of time on research and resources to make sure that before we launch anything that it is going to be right for our consumer base."

In this regard, says Cornell: "There are some overriding trends that we are seeing with shoppers today.

• "Consumers are looking for higher quality products.
• "They are certainly more concerned than ever before about health and wellness.
• "They are working longer hours, they are spending more time in cars, they are really managing a more a more complex lifestyle. So they are looking for convenient meal solutions. This is why we put such a focus on building our foodservice position. We want to meet that consumer's need that right now is more challenged than ever before and is looking for simple solutions in life.

"So quality, health and wellness, convenience are virtually universal trends that we are seeing with shoppers today."

Employee Involvement

Says Palmer: "At Safeway we feel that every associate is a sales person for the brand and a resource to help market our product both internally and externally.

"We do product launches internally from time to time by giving out free samples or coupons for either discounts or free product to our associates so that they will try the product and become advocates for that particular item."

Store Brand Promotion

Safeway's The Incredibles Sweepstakes featured characters from the popular Disney movie on select store brand products.

In 2004, Safeway entered into a groundbreaking marketing partnership with Disney/Pixar in a major movie tie-in with the release of The Incredibles in October 2004. This joint marketing program-called The Safeway Sweepstakes-utilized a variety of marketing vehicles including print advertising, radio, point-of-sale, displays, and special store brand packaging featuring characters from The Incredibles. Store brand products selected for the promotion included: Safeway Select soda, Safeway Select Verdi pizzas, Safeway 10-pack aseptic juice, Lucerne ice cream, and Lucerne milk.

The Safeway sweepstakes gave consumers a chance to win one of 10 grand prizes and employees the chance to win one grand prize: an "Incredible" room makeover designed by a Pixar artist.

"The larger-than-life sweepstakes reinforced the home makeover trend that has been popularized on television, and leveraged the highly imaginative assets from Safeway's Disney/ Pixar partnership," says Bradley. "This gave shoppers a once in a lifetime chance to win a truly incredible prize, and the only place you could participate was at Safeway Inc. company stores in the U.S. and Canada with a club card.

"This ground-breaking partnership, linking Safeway to one of the biggest movie releases of 2004, elevated Safeway's private label products to national-brand status."

Safeway Facts

Safeway operates 1,802 Safeway stores across the U.S. and Canada. They include 325 Vons stores in Southern California and Nevada, 113 Dominick's stores in the Chicago area, 137 Randalls and tom Thumb stores in Texas, 38 Genuardi's stores in the Philadelphia area, and 17 Carr's stores in Alaska. The retailer posted annual sales of $35.8 billion in 2004.

Safeway has one of the most extensive store brand programs in North America. It offers customers more than 2,500 products under its Safeway, Lucerne and Mrs. Wright's brands and an additional 1,250 premium store brand products under its Safeway Select band.

The company operates more than 30 food processing plants in the U.S. and Canada that supply private label products for its own stores as well as for outside retailers.

Safeway's proprietary foods include Rancher's Reserve beef and Signature soup, salad, and sandwiches.