Target is making perhaps its biggest push yet into private label by launching a flagship grocery brand. The new line, Good & Gather, will be Target’s largest in-house brand across the entire store, with more than 650 products launching on Sept. 15 and 2,000 products to be rolled out over the next 18 months.
The retailer is forecasting that Good & Gather will become a multi-billion-dollar revenue driver. The food items, designed with the shopper’s health in mind, will include household staples such as dairy, produce, ready-made pastas, meats and more, and full meals such as an avocado toast salad kit, beet hummus and heat-and-serve roasted poblano macaroni and cheese. The products will not include artificial flavors, synthetic colors, artificial sweeteners or high fructose corn syrup.
Over the last several years, Target has been building momentum in its food and beverage business, coinciding with the company’s $7 billion investment plan for its stores. As part of the store remodels, the company implemented new in-store displays and lighting in the grocery department. With the increased focus on grocery, Target has posted seven straight quarters of sales growth in food and beverage and has been gaining market share in the category. Target is one of the top 10 grocers in the U.S., with grocery accounting for approximately 20% of its $75 billion in annual sales.
The Good & Gather launch is anticipated to “drive additional traffic, which in turn will drive increased sales of higher margin private and exclusive non-food items,” said Charlie O’Shea of Moody’s in commentary provided to Retail TouchPoints. “This new initiative is a necessary change for the company as it continues to improve its competitive position.”
Target reasserted its grocery emphasis in January with the promotion of Stephanie Lundquist from Chief Human Resources Officer to the newly created role of EVP of Food and Beverage. Lundquist oversees all merchandising and operations for food and beverage, including strategy development and implementation, with a focus on accelerating progress and strengthening cross-functional alignment.
To launch Good & Gather, Target stepped up its taste testing and hired more food experts and scientists to help develop the products. The retailer also worked out of a new test kitchen at its Nicollet Mall headquarters.
Good & Gather will include product extensions in four categories: kids, organic, seasonal and premium. The new line will replace the present Archer Farms and Simply Balanced lines over time, while the Market Pantry line will be reduced. Select items from these three lines will be reformulated with new ingredients under the Good & Gather label.