Private Label, Cheese & Crackers

High prices and tighter regulations are driving conversations around:

• Private labels’ strategic relevance
• Kids’ nutrition at school and home
• The industry’s reaction to new labor rules

Private Matters

Heavy hitters Walmart, Ahold Delhaize and Aldi have all upped their respective private-label games with different strategies. Even hardware stores are seeking a piece of the action. 

• On April 30, Walmart launched “bettergoods,” its biggest private-label launch in two decades. The retailer described the brand as “trend-forward and chef-inspired food approachable and affordable, with most items priced under $5.” 
• The New York Times cited Scott Morris, Walmart’s private-label lead, who emphasized consumer expectations for products like “oat-milk frozen desserts, plant-based macaroni and cheese, and frozen appetizers like chicken curry empanadas.” 
• Food & Wine provided additional background on private-label leaders, such as Target’s 2019 Good & Gather, Amazon’s 2021 Aplenty, and the venerable Kirkland by Costco. 
• Private-label-focused publication Storebrands relayed Ahold Delhaize subsidiary Giant Foods’ strategy of leaning on its store brands, such as Nature’s Promise. In addition to expanding its loyalty program, Giant hopes to lure new customers with lower prices. 
• The Wall Street Journal’s Patrick Thomas explained Aldi’s success, noting that the retailer’s shelves are stocked with 90% private-label goods. “Nearly every aspect of Aldi’s operation revolves around saving money. The small-store format means cheaper rent, lower energy costs and fewer employees.”
• Ace Hardware is getting in on the action. Capitalizing on its reputation as “the place” for grills and grilling accessories, the company announced its own line of barbecue sauces and rubs: Loud Mouth Barbeque (Food Business News). 

Our Takeaway: Amid generational inflation, high prices and intense competition in retail grocery, private label goods have become integral to retail food. Store brands will continue to serve as not only low-price alternatives but also differentiators for the retailers’ brand presence.

Schooling Nutritionists

The school year will be ending soon, but policymakers and industry groups have plenty to say about what constitutes a nutritious school meal. Meanwhile, the influence of social media and advertising on youth diet patterns has drawn interest from researchers and senators.

• Biden-Harris administration announces new school meal standards to strengthen child nutrition | USDA
• SNA reacts to release of final school nutrition rule | School Nutrition Association
• NMPF thanks USDA for keeping low-fat flavored milk in schools, culminating 12-year effort | National Milk Producers Federation
• A look at which states have the healthiest school lunches | Foodservice Director
• Sanders, Booker, and Welch unveil ban on junk food ads targeting kids | Common Dreams
• On teens, nutrition, and exercise: How to encourage healthy habits | Tufts University
• Social media can be used to increase fruit and vegetable intake in young people | ScienceDaily 

Our Takeaway: The Biden administration’s rule updating school meal standards has been accepted more widely than similar rules proposed during the Obama administration. Part of this stems from incorporating the feedback of school cafeteria workers (represented by the SNA) regarding which foods are likely to be eaten versus going to waste.

Labor Favors

There’s never a dull week in labor reform. The U.S. Department of Labor (DOL) dropped a pair of rules that affect workers from farms to foodservice. Additionally, Los Angeles County joined a string of cities that seek to limit scheduling uncertainty for retail workers.

• On April 26, the DOL published its final Farmworker Protection Rule, which regulates workplace conditions for immigrant workers under the H-2A temporary visa program. The rule addresses a range of issues, including recruitment transparency, whistleblower protections, seat belt availability and wages. 
• The United Farm Workers President Teresa Romero welcomed the rule: “The power of the federal government has sided with farm workers … who for too long have been exploited, silenced, displaced or harmed by the H-2A program.”
• While “wholeheartedly support[ing]” the rule’s intention, American Farm Bureau Federation President Zippy Duvall warned that it puts too much strain on farmers: “The workers most supported by DOL are the lawyers needed to interpret the tsunami of new rules that keep moving the goalposts.”
• The DOL also issued a rule on April 23 that would require employees to be paid overtime if they are salaried at less than $58,656 per year.
• The National Restaurant Association opposed the wage change as damaging to restaurant owners’ profitability, noting: “Because DOL created a one-size-fits all rule based on national income data, rather than regional data, this change is going to disproportionately impact restaurant owners in the South and Midwest.”
• On April 26, the Los Angeles County Board of Supervisors voted to require that retailers provide schedules two weeks in advance or face fines per violation (Los Angeles Times).
• The LA County rule echoes a “fair work week” measure approved in several cities — including Chicago, New York, Philadelphia, San Francisco and Seattle. Progressive Grocer shared attorney George Morrison’s take on the challenges such laws present.

Our Takeaway: The labor market remains hot, with many employers in the food and agriculture industry struggling to fill all of the desired positions with domestic labor sources. Rules like these will help improve working conditions and wages, but they come at a heavy cost to employers in a labor-dependent industry. Some of these costs will likely be passed on to consumers.