Page 12 - Food&Drink Magazine May 2022

PRIVATE LABEL
What’s in a label
A trailblazer of private label manufacturing, Steric is still an industry leader while also creating its own branded products. Kim Berry speaks to CEO Richard Brownie.
brands, but as the number of retailers consolidated and grew in scale, so did their purchasing power and mindset about generic branding.
“Right through until the early 2000s, retailers were very much sellers of branded products with an entry level offering of private label products. That started to change when retailers realised that a strong own brand could drive customer loyalty.
“It has seen the evolution from generic label to a more sophisticated private label model ranging from value to premium branded products,” Brownie says.
Market research company Nielsen found premium tier private labels experienced 6.9 per cent growth between 2016/19.
For retailers, strong private label performance is lucrative. It differentiates them from competitors, can foster loyalty from consumers, and delivers larger margins.
Deloitte’s paper, Has private label become branded? says while price
is key (the original driver for private label), consumers are also willing
to pay more for products that meet their evolving needs of health, convenience
and sustainability.
Private labels are shifting
to more premium, innovative products positioned on the cutting edge of consumer
societal trends, causing the lines to blur between private labels and branded products,
Deloitte says.
While the market matures,
Brownie says the strongest foothold for private label is still in commodities including oils, flours, and sugar.
“High volume products that can be bought in bulk and repackaged cheaply remain the foundation,” he says.
LEAN AND NIMBLE
While Steric is a contract manufacturer, it also produces its own branded products including Australia’s first electrolyte sports drink Staminade and Mrs Mack’s Instant Batter Mix.
Steric’s latest own branded product for the retail market is a range of fermented hot sauces under the Billy B’s label, named after Brownie’s father.
The business has around 100 employees with its product development team central to its work.
“There are four people in the team and a chief technical officer, who brings extensive industry experience to the table,” Brownie says.
The plant has three liquid filling lines and dry powder lines, manufacturing own brands as well as private label products for retailers.
He says working with clients from initial product development, through trials to final product, and then manufacturing and packaging sets Steric apart.
“It is a whole team process and there are a lot of steps in that process. You need a thousand things to go right to get a good product on the shelf, it is incredibly satisfying,” he says.
WHEN private label manufacturing began in earnest in the 1980s, it was a different beast to what it is today.
Richard Brownie’s father William (Bill) and his business partner Brian Rich began Steric in the mid-60s manufacturing everything from food products to motor oil, birdseed and washing detergent.
“ A thousand things need to go right to get a good product on the shelf.”
But Bill Brownie’s cadetship at the Campbell’s Soup Company and his degree in food science, fuelled his
determination for the business to focus solely on food.
It was the introduction of generic ‘no name’ or ‘home brand’ grocery labels that turned Brownie’s goal into reality and ultimately established Steric as an industry leader in Australia.
“When generic branding first began, the grocery and whole FMCG sector was dominated by large companies with strongly branded products,” Richard Brownie says.
Steric’s early success in the market came from working with Franklins on its No Frills brand and Jewel Food Stores’ No Name label from the 1970s.
Initially, private label had little impact on the major
12 | Food&Drink business | May 2022 | www.foodanddrinkbusiness.com.au