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Meal kits and fresh food gaining ground in private label

Store brands helping retailers capture sales from new alternative channels

The 2015 Private Label Manufacturers Association Annual Conference in Chicago this week featured several solutions that addressed three small but growing threats to a retailer’s business.

The first trend is the meal-kit. Blue Apron, Hello Fresh, Plated and other companies in the sector are expected to sell about $100 million in the U.S. this year and a comparable amount in Canada. These companies skip grocery stores and deliver repackaged ingredients with recipes directly to consumers.

A new San Francisco-based company called Handpick is working with retailers to win the meal-kit business using products already on the store shelf. These meals, which are packed in the store and are available for pick-up or delivery, are about half the price of the meal-kits offered by other meal-kit startups and build strong shopper loyalty at the retailers.

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The second trend is all about food trucks, which have become a foodie’s paradise. Food trucks create shopping excitement, and when a retailer can tie a store program to the phenomena via easily prepared recipes or meals available on the freezer shelf lifts sales incrementally. At least three vendors on the PLMA expo floor were offering programs for widely diversified meals and snacks like brisket sandwiches and Thai appetizers.

The last trend is for fresh foods. While this movement has been around for years, the push for store brands is relatively new, particularly in dairy, deli and bakery. Supermarkets have long had their own milk, egg, bread and juice programs, but now they’re moving aggressively into sub-categories like hummus and other specialty spreads, imported cheeses and gourmet bake-off cookies.

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In addition to these, organics and gluten-free products continued to proliferate the tradeshow floor. There were at least 100 gluten-free and organic vendors this year—roughly double last year’s number. Plus, dozens of more traditional suppliers are now promoting gluten-free and organic lines.

PatsyPie Gluten-Free Bakery, based in Lachine, Q.C., is getting set to launch its new chocolate chip cookie line that combines both of these trends. Plus, the cookies are okay for vegans. The cookie will be available early next year and is the latest product from the baker, which launched gluten-free brownies that can either be sold frozen or defrosted. Jesper Jonsson, PatsyPie’s president, said the show was very active and he expects to sign on new Canadian and American retailers in his second year as an exhibitor.

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Jonsson was joined by more than 70 other producers from practically every province exhibiting this year. The trade commissioners of Alberta, Manitoba, Ontario and Quebec organized an expansive pavilion on the main floor that features bakeries, vineyard, confectioners, snacks specialty foods, proteins and more. British Columbia and the Maritimes were also represented at booths showcasing a wide variety of products.

Canadian retailer attendance was stronger this year than it has been in recent years, with Sobey’s, Loblaw’s, Walmart Canada and several others spotted in the educational sessions, on the expo floor and at the networking events.

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