30 years ago, the failure of white label products caused the industrial suppliers to be reluctant to risk a new project. Convincing them of the potential of private brand products was hard. For Pedro Veloso, a new market positioning based on quality and a careful developed image were crucial.
The strength of the Pingo Doce private brand is today strategic for the company. But 30 years ago, customers could find only brands by well-known industrial producers on Pingo Doce shelves. What has happened since to change that reality?
Pingo Doce launched its private brand in response to an initial, somewhat unsuccessful launch attempt made by a competitor at the time. There was a high degree of visibility for the retailer’s largely unsuccessful launch of a range of products with a relatively undifferentiated image, which today could be called a “best price” range. But consumers quickly identified the products as part of a low quality range. These generic, poor quality products were called “white label products”, which turned out to be a very deprecatory name, which is quite understandable. At the time, “white label products” figured very negatively in consumers’ minds, so we believed that it was crucial to devise our own Pingo Doce Private Brand launch based on two essential properties. First, indisputable quality comparable to the market leaders in each category, and second, a carefully developed brand image that reflected the new market positioning.
We wanted products of indisputable quality, we wanted to be aggressive in terms of pricing, and we wanted a detailed image that set us apart. All of these attributes are still associated with our private brand project.
INTERVIEW WITH PEDRO VELOSO
DEPUTY CEO AT SOCIEDADE FRANCISCO MANUEL DOS SANTOS (SFMS)
Do you remember what the first Pingo Doce private brand product was? What expectations did you have for it? How was it promoted to customers?
We launched quite a complete range of private brand products simultaneously, and one of the stand-out products was the washing powder produced by Unilever. At that time, we wanted to present a range that would meet the basic needs of consumers and feature at least one reference product in each of the main sales categories. Our most significant sales force was the Pingo Doce operations team. We made several presentations to all store managers – some of the older ones still mention it to me today – intending to transmit enthusiasm for this, the chain’s great innovation. Francisco Soares dos Santos, Pingo Doce CEO at the time, was very enthusiastic about the project. And this was a tremendous help in launching it.
How do you overcome the initial resistance of industrial suppliers, who often make products for other brands and have their own products?
After the failure of the “white label products”, the industrial suppliers were very reluctant to sign up to a new project. Convincing them to become involved was no easy task, all the more so because there were no exclusive private brand suppliers back then. All our suppliers made their own brand products, which did not make the decision easier. Having said that, Mr Ribeiro Soares, the project coordinator, has always been convinced that it was possible to persuade the most reputable industrial suppliers, and they have always been our main target. I think he was proved right in his definition of priorities.
I would say that we managed to guarantee the involvement of many of the leading brand companies of the day, which may appear strange in light of the strategies pursued by these companies today. After a lengthy initial period of underestimating the potential of private brand products, large brand companies became disproportionately resistant to them. They chose not to produce private brand products, thus opening up a path towards specialisation for other large industrial companies in this market sector.
In 1991, Pingo Doce launched its first Private Brand products with brand references that are still part of the consumption habits of the Portuguese people. Thirty years later, Jeronimo Martins’ supermarket chain in Portugal continues to win the hearts of consumers more varied and sophisticated options.
Given the experience the group gained through the development of private brand products, what insights were passed on to other group companies, such as Recheio, Biedronka and Ara?
I sincerely believe that we have many reasons to be proud of the progress we have made with our private brand over the last 30 years. The simplicity of the offering is one of the shared characteristics of all our chains. The quest for innovation is another attribute of our brand image; the time to be a ‘me too’ has long ended. I also believe that nutritional content was a concern we took on board before most of our rivals. More recently, I think we are in the vanguard as far as sustainability in all its forms is concerned.
When you go into a Pingo Doce store now, 30 years later, do you see any legacy of the first private brand products?
The products today are infinitely better and more sophisticated, but I would like to think that there has been little change in the essential positioning since the time of the first launch. We wanted products of indisputable quality, we wanted to be aggressive in terms of pricing, and we wanted a detailed image that set us apart. All of these attributes are still associated with our private brand project. Accordingly, I would say that if there is something that has lasted over time, it is the initial positioning of our private brand.
Do you have a favourite private brand product?
Unsurprisingly, I’m a private brand fundamentalist. It means, in most cases, that Private Brand products are my first choice when shopping. Having said this, it is not easy to pick a favourite. Originally, Pingo Doce mayonnaise was a truly iconic product for our customers, and I was no exception. Currently, the Angus beef products are among my favourites.
