Premium Private Label Is Your Edge: Inside IGA's That's Italy

Private label isn't just a low-cost product option anymore. It's moving into the premium and better-for-you tiers, and independents who move with it can win shoppers and margin at the same time.

In a recent webinar, IGA President and CEO John Ross sat down with IGA Senior Director of IGA Exclusive Brands Tom Venere and Houchens Food Group Senior Director of Merchandising Jonathan Brown to talk about That's Italy, the first line under IGA's new Merchant's Choice brand. Watch the webinar below, or keep reading for a recap of what IGA retailers and wholesalers need to know.

Shoppers are trading up, and private label is following them

Ross opened with the big picture. Private label has outpaced name brands for years, and it's now showing up in categories and quality tiers where it never used to compete.

"Private label started off as a low-cost alternative, and that was true and continues to be true," Ross said. "But today, if you look at private label, they're in almost every segment, and increasingly they're in the average and the better-for-you segments."

What's driving the shift? Savings, yes, but also authenticity and trust. Shoppers want to know their store stands behind what's on the shelf. "We as retailers, we better be paying attention to private label," Ross said.

What is That's Italy?

That's Italy is a line of authentic Italian products, made and imported from Italy, sold under IGA's Merchant's Choice brand. "They are clean label. They are non-GMO," Venere said.

IGA found the line through its global network. "As a global retailer, IGA does business in well over 30 countries," Venere said. "We partnered with this company called Coop Italia; they have over 7,000 private label SKUs, and they're just a tremendous partner."

The products are already proven sellers in Italy, and IGA worked with Coop Italia to brand them for American shoppers. Ross summed up the strategy: if you want to win in Italian, "go straight to the country of origin and start with product that's already selling."

The quality story is rooted in the regions behind each product:

• Pasta from Tuscany and Sardinia, made with 100% durum wheat semolina, including bronze-cut varieties
• Pasta sauces from Sicily
• Balsamic vinegar from Modena
• Pestos rounding out the core set

The line has launched with about 20 SKUs, including 11 pastas. "This is the real deal," Ross said.

Affordable premium, with margin to match

That's Italy isn't built to compete with your entry-level private label. "It's an affordable premium," Venere said. It's priced just below premium national pasta and sauce brands while matching them on quality.

That means it adds to your shelf instead of duplicating it. "It's not stepping on other SKUs, so it provides incremental draw for your category," Ross said. It's also designed not to compete with your wholesaler's private label program.

The numbers make the case:

• For shoppers: "You save 10 to 15% versus what's currently out there on the shelf by other brands," Venere said.
• For retailers: Margin "is in the 30 to 40% range, which is about 10 to 15% better than what they're getting from the branded items."
• Early sales: Venere reported that That's Italy bronze-cut pasta and pasta sauces are selling at roughly a one-to-one rate with the leading national brands on comparable items.

"For a new brand to be getting that kind of share is really unprecedented," Ross said. "And then you won't see it at Walmart, so it's a real advantage."

Built with retailers, proven in stores

That's Italy was developed by the alliance, for the alliance. Brown and the Houchens team helped choose products, shape the name and logo, and guide go-to-market planning.

"What I think is most exciting is meeting our customer where they want to be," Brown said. "Private label allows for us to meet the needs of shoppers along the spectrum, but allow for us to bring a high-quality product that's really authentic."

At Houchens, spaghetti and marinara lead sales, with basil pasta sauce close behind. The key is getting that first purchase. "At first, they're seeing a new brand on our shelf. What is it? Who is it? Why should I try it?" Brown said. "Our customer, once they've picked it up and tried it once, is really excited about the quality."

The packaging does a lot of that work. "It's the most enticing packaging when you walk up to shelf," Brown said. IGA has created a sign kit to support end caps of the products, available here.

Houchens also took the brand to TV, producing a That's Italy commercial for Italian Heritage Month in October. "When you bring home good food and have good times, the family environment is just a difference," Brown said. The spot closes on a line made for the shelf: "One bite and you know that's Italy."

What's coming next

The core set is just the start. Venere said the line will grow to more than 65 items in the next year, expanding beyond red sauce and center store:

• Alfredo sauces in three flavors
• Authentic frozen That's Italy pizza, which Brown said has been in development for six to eight months
• Gelato, about six months in development. "We want to get it right," Brown said.
• Seasonal items, including panettone for the holidays, plus macarons

Merchant's Choice won't stop at Italy, either. "We're going down the multicultural road," Venere said, naming Hispanic, Latino, and Asian foods as next directions. The brand will also explore non-ethnic opportunities such as high-protein, GLP-1-friendly items, infused drinks, and jerky.

Ross described the strategy as using IGA's international footprint to find authentic, distinctive products that open new margin opportunities without crowding existing private label. "This is just the beginning," he said.

Get That's Italy in your store

That's Italy is available or rolling out at most IGA wholesalers. "If it's not at this time, pick up the phone, call your wholesale partner, inquire about it," Venere said. "We can always help you find a way for you to have this product so that you can delight your customers."

IGA has also built a full sign kit so you can promote the line from day one: shelf-edge signs, aisle violators, endcap headers, and ad blocks.

And if you want a hand in shaping what Merchant's Choice launches next, the door is open. "If any of our retailers out there would like, like Jonathan, to participate in brand development and packaging, that's what the Retail Advisory Board is all about," Ross said. "Just raise your hand and let us know."

Ready to bring the taste of Italy to your aisles?

• Call your IGA wholesaler to order That's Italy today.
• Order your sign kit in time for holiday entertaining.
• Request samples by contacting Tom Venere.
• Watch the full webinar and the Houchens commercial here.