Dive Brief:

• SpartanNash aims to continue reformulating private label products under its Our Family and Open Acres private label brands, the company reported in a press release. Through the effort, dubbed a "Clean Ingredient Initiative," the retailer will simplify and reduce ingredients to offer "free from" products with fewer processed ingredients and easier-to-read labels.  
• The company has already reformulated products and redesigned packaging for more than 425 products since last year under the initiative and will add another 175 products in 2019. SpartanNash has worked with manufacturers to remove MSG and synthetic flavors from soups, fruit-and-grain bars and more. Four ice cream varieties now only contain milk, sugar, cream and a single flavor.
• The reformulated products are designated with new packaging. Our Family items, which includes more than 1,700 products, will have leaf icons while labels for reformulated Open Acres products, SpartanNash’s private brand for fresh foods, will have a circular swoosh.

Dive Insight:

Midwestern food distributor and grocery retailer SpartanNash is capitalizing on two trends with its latest initiative: the growth in private label products and the increased demand for "clean" food.

According to the IRI 2018 Private Label Report, private label sales outpaced national brands last year, and eight in 10 Americans buy private labels frequently or occasionally. The findings also showed that 69% of people say private label product quality is as good as national brands. Given that private label sales also exceeded national brands in 2017, this growth is steady and may continue to climb. In fact, the dollar share of private labels in the U.S. is now projected to surpass 25% over the course of the next decade, according to CB Insights.

SpartanNash's initiative also acknowledges a growing need for "free from" products, which has increased as shoppers turn toward healthier eating and as a growing population discovers food allergies. A recent study in JAMA Network Open found that almost 11% of adults deal with food allergies and half of adults developed allergies in their adult years, leading many to choose elimination diets. 

Gluten-free, dairy-free and other allergen and chemical-free products are increasingly in demand, and retailers have responded in a big way. Kroger's Simple Truth brand, which now brings in more than $2.3 billion annually, bans a list of "not-considered-clean" ingredients from its products. Aldi has an entire private label line dedicated to gluten-free products with its LiveGFree brand. In 2017, Hy-Vee launched a clean ingredient initiative to eliminate more than 200 artificial ingredients or synthetic chemicals from 1,000 private label products. 

SpartanNash may be slightly behind competitors in cleaning up its private labels, but the company has long had a strong selection of private label products. Growing private label inventory has recently come into focus. At the beginning of 2018, SpartanNash introduced its Our Family brand to the Michigan market at 87 stores, including Family Fare Supermarkets and D&W Freshmarket. Last summer, SpartanNash introduced Good to Go! from Open Acres, a new private label brand designed for shoppers looking for healthy and convenient options. The line of entrées, sides and desserts includes popular foods that are both ready-to-eat or part of meal kits. 

Now might be a good time for SpartanNash to find ways to showcase its innovative programs and products. Last month, SpartanNash fell short of Wall Street projections for its 2018 fourth quarter and fiscal year despite seeing sales inch up. The company’s long-term strategy is focused on growth, attracting new customers and developing new programs. Its efforts in cleaned up private label products could pay off, giving the retailer potential appeal to a growing demographic of consumers who are looking for specialized items that fit their lifestyle.