Kroger reformulates prepared foods, hones in on private label products

23-Jan-2024 - Last updated on 23-Jan-2024 at 14:32 GMT

Image source: Getty/JulPo

As grocery prices are predicted to decelerate, with an expected increase of 1.2% this year, Kroger’s strategic reformulation of its deli and bakery goods is focused on expanding value and convenience for its shoppers with a focus on flavor, quality and packaging.

With budget, convenience and quality as top of mind for grocery shoppers, private label offers a reliable alternative—with retailers offering 25% in savings compared to national brands, according to Consumer Reports data.

Kroger’s reformulation of several of its Our Brand deli and bakery items will focus on flavor, quality and packaging, according to a recent press release.

Dan De La Rosa, Kroger group’s vice president of fresh merchandising said given the popularity of several of its Our Brand “basket staples,” the national grocery retailer is now offering homemade-style recipes to grab and go in-store for its products including, Home Chef fried chicken, Private Selection signature buttercream cakes, Private Selection cinnamon rolls, Private Selection cinnamon crumb cake, Private Selection French baguette and its packs of fresh basked chocolate chip cookies. Kroger also plans to roll out its Private Selection croissants made with butter later this year.

Cost of food is expected to rise in 2024, private label still offers value for consumers

Between supply-chain disruptions, including increased transportation costs, labor shortages and the Ukraine conflict, ongoing inflation impacted grocery prices, contributing to a 5.8% spike in food prices last year, according to data from USDA Economic Research Service.

While experts predict inflation to simmer this year, USDA forecasts a 1.2% increase in grocery prices.

Younger generations, particularly Gen Z, are brand fluid, driven by quality and price rather than brand loyalty, according to Mintel, which provides an opportunity for retailers to boost their private label and prepared food products, while aligning with budget-minded shoppers.

As a result of inflation, total multi-outlet sales of private label food and drink in 2022 increased by 15.5% in the US, narrowing the gap with national brands and cementing their position as a key player in stores.

Combining the ease of quick-service restaurants with the variety of grocery shopping, whether it’s multi-nationals like Kroger and Walmart or regional, like Earth Fare, retailers’ prepared food departments have a leg up in leveraging their existing assortment to deliver and innovate on-the-go meals that consumers can rely on both daily and seasonally; and further solidifying themselves as a go-to destination for high quality, prepared foods.