The Evolution of Produce Private Label

As stores seek to satisfy shopper demands, private label can build greater customer loyalty.

Private label has long been a staple in center store, and now the once-hesitant produce department is embracing new applications and opportunities.

Private label has shifted the conversation in produce from price-only to value, trust and consistency, says Robert Colescott, president and chief executive of Southern Specialties in Pompano Beach, FL. “In a category where seasonality, weather and origin introduce constant variability, private label gives retailers the ability to define expectations and own the customer relationship.”

According to Mark Cotê, regional produce supervisor for Redner’s Markets in Reading, PA, with 44 locations, private-label products typically offer retailers higher profit margins than national brands because they entail lower marketing and distribution costs.

“They also provide retailers with greater control over pricing, quality, sourcing and merchandising,” Cotê says. “By offering exclusive products not found at competitors, such as Walmart or Kroger, retailers can strengthen their brand identity and build customer loyalty. When shoppers trust a store’s private label, they are more likely to return, increasing repeat business and long-term profitability.”

“When shoppers trust a store’s private label, they are more likely to return, increasing repeat business and long-term profitability.”
— Mark Cotê, Redner’s Markets, Reading, PA

Though private-label brands started as a price strategy, they’ve become much more.

“Over time, these brands have gone from being seen as cheap alternatives to store signatures, with their minimalist design evolving into modern packaging for easy brand recognition,” says Jordan Grainger, vice president of sales and business development for Ben B. Schwartz & Sons in Detroit, MI. “This evolution in packaging allowed retailers to communicate key information about each product, such as ‘hand-selected’ or ‘carefully sourced,’ organic and sustainability positioning, or promoting specialty grower programs.”

Considering a few key questions will help retailers determine if private label is right for their produce department.

1. WHY PRIVATE LABEL IN PRODUCE?

The produce department has become one of the most strategic places to execute private label. “A strong private-label program allows retailers to differentiate themselves in an otherwise commoditized space,” says Colescott. “When private label is executed correctly, it becomes less about competing on price and more about delivering a consistent eating experience.”

Private-label products create shared value by driving differentiation, stronger margins, and deeper retailer-supplier partnerships, explains Quinn Hansen, marketing assistant at Reichel Foods in Rochester, MN.

“They allow retailers to build loyalty and control the shopper experience while leveraging supplier expertise,” she says. “It boosts perceived value, improves profitability, and helps make the produce department a destination for shoppers.”

Private label sets the store apart from others, agrees Marc Goldman, director of produce and floral, Morton Williams Supermarkets, in New York, with 17 stores. “If you do a good job, it really benefits the store.”

Private label offers flexibility. “Retailers can design pack sizes, ripeness standards, and merchandising formats that align with their shopper demographics and pricing strategy,” says Colescott. “Private label also enables closer collaboration with growers and shippers on varietal selection, packaging formats, sustainability initiatives and food safety standards.”

Private label can create options. “Private labels, once considered budget-only options, have expanded into tiers so consumers can buy premium items, as well as legacy value options,” says Grainger. “And, given they weren’t bound by nationally recognized brand specs, private labels became the testing ground for innovation, whether trying new compostable packaging or adding QR codes.”

2. WHAT PRODUCTS SHOULD BE CONSIDERED?

Private label is especially common in high-volume, everyday produce items. “Staples, such as bananas, apples, bagged salads, tomatoes, potatoes, onions, and citrus fruits, dominate this category,” says Redner’s Cotê.

Packaged and value-added items, including pre-cut fruit, salad kits, and organic greens, also perform strongly under retailer brands, states Cotê.

“Retailers that offer these products succeed because shoppers prioritize freshness, price and convenience over brand loyalty, making store brands a trusted and cost-effective choice,” he says. “Additionally, private-label produce enables retailers to showcase local sourcing, organic options, or premium selections, thereby aligning with customer preferences.”

For berries and tomatoes, the clamshell packaging lends space for branding, explains Grainger of Ben B. Schwartz. “If a retailer consistently delivers reliable freshness, they can protect their margins in a volatile pricing category. Specialty items, such as organic produce or pre-cut and prepared items, lend well to private label because retailers can control the differentiation — everything from recipes, to portion sizes, to packaging.”

Fresh-cut produce and grab-and-go snack packs are prevalent because they deliver convenience, consistent quality, longer shelf life, and strong perceived value, according to Hansen of Reichel Foods.

“They also help retailers differentiate their produce department and drive higher margins beyond commodity items,” she says. “Private label in the produce department has evolved from basic commodity to value-added, convenience-driven solutions.”

Morton Williams offers private label on all its cut fruit and vegetables. “We also do a huge line of dried fruits, nuts and candies in private label,” says Goldman.

A unique example is in horseradish root, where retail-focused wholesalers often request a private label offering, according to Matt McMillin, vice president with J.R. Kelly Company, Collinsville, IL. “We offer either a hang-tagged horseradish root or individually shrink-wrapped roots that have a sticker to display a brand and space for a barcode or PLU. Whether you’re looking to boost your brand, catch the eye of potential buyers, or speed up the checkout process, private label is a great option.”

3. HOW SHOULD PRODUCTS BE PRESENTED?

Historically, private label in produce was positioned as a value-­tier option, but that has changed. “Today’s private-label programs are brand-forward and quality-led,” says Colescott. “Modern private-label programs now emphasize origin, grower stories, sustainability, and flavor, while spanning conventional, organic, value-added, and ready-to-eat formats.”

According to Cotê, produce departments can effectively source, market and merchandise products by focusing on freshness, seasonality, and strong supplier relationships. “Highlight seasonal and organic options through clear signage, sampling, and storytelling about the farms’ origins. Train staff to be knowledgeable and approachable.”

“Since private-label products have a long-standing reputation as being budget products, or what customers may assume is lower quality, grocers should use self-assured messaging on their labels, such as ‘Our Best’ to convey confidence.”
— Jordan Grainger, Ben B. Schwartz & Sons, Detroit, MI

Make sure the value proposition is clear to the consumer and not crowded with too many claims, suggests Grainger. “Focus on one element, such as ‘locally grown’ or ‘fresh cut daily.’ Labels can also be used to promote key information to humanize the brand, such as if it comes from a nearby farm. In addition, regional grocers can take advantage of more in-store sales opportunities with everything from app push notifications to QR codes on labels.”

4. WHAT SHOULD A RETAILER WATCH OUT FOR?

Compared to grocery items, produce private label exhibits unique challenges. “Challenges include managing freshness, ensuring quality, forecasting demand and educating shoppers,” says Hansen. “These challenges are solved by partnering with experienced fresh-cut suppliers, leveraging longer shelf life, keeping assortments focused, and using clear on-pack branding and in-store signage to drive confidence and repeat purchases.”

A prime issue is that the store’s name is on the line. “With private label, the retailer owns the brand promise,” says Colescott of Southern Specialties. “Any quality failure reflects directly on the retailer — not a third-party brand.”

Stores must do private label right because, if not, you can really hurt your name, agrees Goldman of Morton Williams. “Make sure to pick good partners. That’s always important, but even more so when your name is on the package.”

Cotê suggests considering several solutions. “Retailers can partner with experienced contract manufacturers, utilize data breakdown for demand forecasting, implement strict quality assurance programs, and differentiate their products through unique packaging, pricing strategies, and targeted marketing.”

Grainger admits packaging with custom labeling can be expensive. “It’s even more so if using certain materials. Regional grocers should look at packaging as a greater opportunity to signal their values, whether it’s community tie-ins or sustainability, and pilot packaging formats in limited runs before scaling.”

5. HOW CAN STORES DECIDE?

Private label is not a one-size-fits-all solution. “Retailers with limited scale, inconsistent volume, or fragmented sourcing often struggle with private-label execution,” says Colescott. “The same is true for suppliers who lack vertical integration, food safety depth, or packaging and logistics capabilities. Private label works best when both sides move away from transactional buying and toward long-term partnerships.”

Private label is not for every retailer, but works best for those focused on differentiation, consistency and long-term category growth, says Hansen. “Retailers should evaluate private label based on their shopper base, operational capabilities, and goals for margin, loyalty, and convenience. The right supplier can help determine the right assortment, volumes, and execution to ensure success.”

Grainger emphasizes private-label items will only magnify a grocer’s established reputation. “If they’re disciplined, trusted, and focused on quality, these items can become a powerful asset,” he says.

“If not, they could be a liability. Grocers who succeed with private-label brands will have well-defined operations, such as concrete receiving, rotation, and display standards, and be able to execute these functions across stores. Their customers should also already have trust in their products and a sense of loyalty.

“Lastly, these grocers should be nimble and willing to fix mistakes or pivot quickly if something isn’t working, and have a long-term mindset to build a successful brand customers can come back to again and again.”

Before committing to private label, Colescott advises retailers evaluate whether they have the necessary scale, infrastructure and partners in place.

“Retailers need to ask if they can support consistent programs, enforce quality standards, and truly own the brand promise — good and bad,” he says. “If those pieces aren’t in place, a mixed strategy may be the better option.”

• • •

A Mixed Strategy: The Role Of National Brands

The strongest produce departments don’t treat private label and national brands as competitors, but employ a mixed-brand strategy.

“The best retailers use both intentionally,” says Robert Colescott, president and chief executive of Southern Specialties, Pompano Beach, FL. “Private label excels at loyalty, margin control and differentiation. National brands excel at trust, innovation and category growth. The key is understanding where each fits.”

Stores should consider their profit margins, brand positioning and customer loyalty when deciding on labeling strategy, advises Mark Cotê, regional produce supervisor for Redner’s Markets in Reading, PA.

“Retailers such as Costco and Trader Joe’s demonstrate that private labels can enhance profitability and create a unique market presence,” he says. “However, established national brands can attract customers and drive traffic to the store.”

“It’s important to analyze the preferences of the target market, assess the competition, and evaluate supply chain capabilities before making a commitment to private labels,” he adds.

While private label has gained momentum, stores must keep in mind the important role of national brands. “National brands bring built-in trust and recognition that’s hard to replicate,” says Colescott. “In produce, that trust helps reduce shopper uncertainty and drive quicker purchase decisions.”

Marc Goldman, director of produce and floral, Morton Williams Supermarkets, in New York, with 17 stores, describes how they once tried private label juice from a major successful national brand. “But, we couldn’t give it away,” he says. “Shoppers wanted the brand. There are times when it’s better to have the national brand label.”

National brands also invest heavily in marketing and innovation, helping grow entire categories. “They act as innovation engines,” says Colescott. “Retailers get access to proven concepts without assuming all the R&D risk internally. There’s also a level of risk-sharing with national brands. That’s especially important in high-velocity categories such as leafy greens.”