![\"\"](\"https:\/\/rangeme-blog-images.imgix.net\/blog\/wp-content\/uploads\/BrettCramer.png?auto=format%2Ccompress\")
<\/figure><\/div>\n\n\n\nBut while it looks simple\u2014private label = lower price\u2014it\u2019s not always that<\/em> easy to get into a retailer\u2019s private label portfolio. <\/p>\n\n\n\n Brett Cramer, owner of The Spice Lab, Pompano Beach, Florida, which produces spices and spice blends for many large and small grocery chains, got into it by chance. Two years ago, a retailer asked the 11-year-old company if it would produce a line of spices to run under its private label.\u00a0<\/p>\n\n\n\n By the end of the first year, The Spice Lab\u2019s private label business had doubled, and now it\u2019s up 40% from a year ago. Currently, 30% of Cramer\u2019s business is private label, and he expects it to be closer to 70% by early 2022.<\/p>\n\n\n\n The Spice Lab provides quality spices and doesn\u2019t compete on price. \u201cPrivate label done the right way can be a gigantic value-add for merchants,\u201d Cramer says. \u201cIt\u2019s better to have a higher quality product that people will come back and buy again and again.\u201d<\/p>\n\n\n\n Here\u2019s are some tips on how you can get into private label products:<\/p>\n\n\n\n Marc-Andr\u00e9 Lamy is the founder of EMMA Marketing in Quebec, Canada, and has launched many grocery store private label products working with Unilever, Kraft, and many small brands. <\/p>\n\n\n\n Typically, he says, retailers approach brands first about creating private label products. But it certainly doesn\u2019t hurt for brands to let them know they\u2019re open to doing so. Big chains have entire departments dedicated to their private label inventory so it is recommended to contact the person responsible for sourcing new products.<\/p>\n\n\n\n \u201cRetailers know precisely the status of a category\u2014whether it\u2019s saturated or not\u2014and will only invest if all the parameters, margins, demand, and size of the category are worth investing time and money in,\u201d Lamy points out.<\/p>\n\n\n\n It seems counterintuitive to launch a private label product in a category in which you already sell your own goods, but it isn\u2019t. \u201cConsumers love choice. And if you have competition you can grow your brand,\u201d says Lamy.<\/p>\n\n\n\n Sometimes, though these tweaks can be minor, such as altering the spice ratios.<\/p>\n\n\n\n You also need to ensure your product is cheaper than the market leader. \u201cPrivate label works by being good but not very different to the best-selling product in the category,\u201d says Lamy. However, he points out that national retailers with strong private food and beverage brands are looking more and more for unique flavors.<\/p>\n\n\n\n The Spice Lab offers some of its spices and blends as-is but also produces custom blends. For these, the customer has to purchase minimums to make the development worthwhile, says Cramer. <\/p>\n\n\n\n The company began using an outside firm to develop these blends but now has an in-house chef, which has accelerated the process from months down to weeks.<\/p>\n\n\n\n Typically it\u2019s the retailer who reduces his profit margin on private label products, Lamy says, which is especially true in the drug industry. \u201cDrugstores usually take a loss on private label but it\u2019s a trip-driver so they use it to drive competition and give choice to consumers.\u201d<\/p>\n\n\n\n For Cramer and his spices, the lower the margins, the more jars of spice his company makes. Since large retailers buy huge amounts with lower margins; for smaller retailers, the margins are higher. \u201cWe don\u2019t lose money,\u201d he points out.<\/p>\n\n\n\n No, typically a retailer offers a very short contract to begin with, \u201cto make sure the customers are there,\u201d Lamy says. If the product sells, retailers usually offer a one-year contract then renew based on sales.<\/p>\n\n\n\n In Cramer\u2019s experience, large retailers don\u2019t do trial runs because of the costs of the labels and because they created shelf space for a private label product. Instead, he typically signs two-year contracts with them. <\/p>\n\n\n\n Very few, beyond manufacturing the product, says Lamy, since larger retailers usually manage the packaging and marketing. They might request that you do some promotions throughout the year. Smaller companies, meanwhile, will work with suppliers on the packaging, he adds.<\/p>\n\n\n\n With the big retailers, The Spice Lab provides the products and the retailer takes over, but they work closely with smaller companies, with collaboration on both sides. The Spice Lab creates packaging using the retailer\u2019s logo to make something customers want to buy. \u201cYou can have the best product and an ugly label and no one\u2019s going to buy it,\u201d Cramer says. <\/p>\n\n\n\n Offering a private label to retailers can be a nice way to expand business \u2014 without reinventing the entire wheel.<\/p>\n\n\n\n![\"\"](\"https:\/\/rangeme-blog-images.imgix.net\/blog\/wp-content\/uploads\/The-Spice-Lab.jpeg?auto=format%2Ccompress&w=1024&h=1024&fit=crop\")
Who should you contact?<\/strong><\/h2>\n\n\n\n
![\"Marc-Andr\u00e9](\"https:\/\/rangeme-blog-images.imgix.net\/blog\/wp-content\/uploads\/Marc-Andre\u0301-Lamy-3.png?auto=format%2Ccompress\")
<\/figure><\/div>\n\n\n\nWhy compete with yourself?<\/strong><\/h2>\n\n\n\n
Do you have to change your recipes?<\/strong><\/h2>\n\n\n\n
Are your margins lower?<\/strong><\/h2>\n\n\n\n
Are you signing up forever?<\/strong><\/h2>\n\n\n\n
What responsibilities do you have?<\/strong><\/h2>\n\n\n\n