Brand Strategy

Kroger spent millions advertising its own peanut butter—why?

Private labels are hot, hot, hot.
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Kroger via iSpot

· 3 min read

This year’s AFC Championship Game had everything—Joe Cool, a hold-your-chest, game-winning field goal, and…Kroger-brand peanut butter?

That’s right. Kroger, the largest supermarket operator in the country, spent $2.5 million, per iSpot estimates, on an ad that emphasized the brand’s own private-label products, about a fifth of what Kroger spent nationally in 2022. “When you get proven quality at lower-than-low prices with Kroger brand products, it feels like you’re winning,” the ad’s voiceover said.

It wasn’t the first time Kroger advertised during an NFL game. However, this game was a shot at the Super Bowl for the Bengals, the home team for the Cincinnati-based grocer, Marisa Cranswick, integrated media strategy lead at Kroger, said. “The stars aligned,” she told us.

But it also comes at a time when private labels are having a moment. Many shoppers have turned to them in response to inflation, according to a recent IRI report. Retailers have responded, expanding their private-label offerings and looking to “lure cost-conscious shoppers,” according to the Wall Street Journal.

Kroger CEO Rodney McMullen said during the company’s Q4 earnings call that the “quality and value proposition” of the retailer’s private-label portfolio, which it calls Our Brands, “is especially important when inflation is affecting so many of our customers’ lives.” “We will continue expanding Our Brands to more categories with innovative product offerings,” he said, noting that sales in the category grew 10% year over year.

It isn’t small peanuts—Kroger made almost $28 billion in sales from its private-label brands alone in 2021, according to the retailer, which brought in nearly $140 billion in sales that year. Suffice to say, the brand probably could have bought a Super Bowl commercial, had it been interested.

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Private labels, specifically food and drink products, generally represent 18%–19% of sales in the grocery industry overall, according to John Owen, associate director of US food and retail at Mintel.

“It’s a big chunk,” he said. “Why would a retailer promote their private labels? Because private label is really profitable versus national brands.”

Within the last decade, private labels have largely shed the perception that they’re “low-price generics for cash-strapped shoppers,” Owen said. “It’s now strategic branding.”

For example, Kroger’s Private Selection brand, which it describes as providing “culinary excellence,” includes chocolate ganache lava cakes and chile-marinated green olives. Meanwhile, Simple Truth, its line of organic and natural products includes items like a plant-based cream-cheese alternative and plant-based chocolate-chip cookie dough.

Whether Kroger is increasing ad spend for its private-label products is unclear; it didn’t say whether it’s allocating more advertising dollars to its own products.

When asked about the overall advertising strategy, Kroger Our Brands Senior Growth Manager Myrna Rexing said in an email that the retailer has “always supported our private brands across multiple channels” and that it’s not “marketing differently than any other national brand.”

“The Kroger brand, along with Simple Truth and Private Selection, are each multibillion-dollar brands. Therefore, we treat our private labels as any CPG would treat their own national brands,” Rexing said.

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