1. Sunripe Marketplace: A Private
Label Strategy
Karan Jaidka (12P141)
Mayur Kumar (12P216)
Nikhil Lilani (12P218)
Suraj Khanna (12P235)
Retailing and Franchising (R&F) – Section B – Group 11
PGPM 2012-14, Management Development Institute (MDI), Gurgaon

2. Introduction to Sunrise Marketplace
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Founded by Will Willemsen in 1982
Present in 2 locations in Canada: London, Ontario
and Sarnia
The first few years were challenging as Willemsen
was in charge of sourcing as well as managing the
store
It had two fresh food oriented shops and a unique
set of distribution and storage system level that
distinguished Sunripe from other supermarkets
Willemsen tried to ensure that only the best and
freshest products were available at his stores
Its stores had several private brands that customers
loved

3. How was Sourcing done?
The Ontario Food Terminal (OFT)
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Produce from over 11
countries
was
present
under one roof
More than 835,000 tonnes
of food was sold annually
to
independent
wholesalers,
distributors,
etc.
Willemsen made a onestop sourcing trip to the
OFT, about twice a week
Advantages of this method
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Willemsen personally hand-picked
and chose the produce he needed,
searching tirelessly for the best of
every item on his shopping list
He was able to develop good
relations with a number of wholesale
buyers, who set aside top-quality
produce to sell (at a small premium)
to Willemsen
He could purchase all his produce
from a single location
Willemsen’s customers could get
produce up to a week fresher, as
compared to any supermarket
Willemsen was able to earn a
decent margin in this way

4. Customer Profile of Shoppers at Sunripe
Frequency of visit:
Once or twice a week
Profile: Involved in
the community,
focussed on
environmental and
social issues
Reasons for
shopping at
Sunripe: For its highquality fresh produce
Demographics:
Aged 35+ and
earning above
average incomes
Customers
of Sunripe
What they were
looking for: A
satisfying shopping
experience, wellmerchandized and
decorated stores,
informed employees

5. Product Portfolio at Sunripe (1 of 2)
Fruits and
Vegetables
Meats
Similar to
supermarkets
Purchased from
the OFT
Apples, oranges,
pears, lettuce,
broccoli and
tomatoes
Cheese and
Deli meats
Purchased from
the OFT
Beef, chicken,
pork, frozen
seafood
Bakery
Products
Shipped in daily
from Sunripe’s
Sarnia store
National dairy
brands
Kept in stock to
save customers
trips to
supermarkets
Neilsen and
Danone
Private Label
Products
Branded items
included
Charcoal Beef
(fresh beef),
Cacklebury Max
(fresh chicken)
and Brick Bread
Sunripe branded
items included
ready-to-eat
salads, juices,
roasted chicken

6. Product Portfolio at Sunripe (2 of 2)
Portfolio of Sunripe’s Private Label Products
Private Label Brand
Product
Annual Sales
(USD)
Gross Margin (%)
Fresh Chicken
400,000
40%
Charcoal Beef
Fresh Beef
320,000
30%
Pink Lady Pork
Fresh Pork
240,000
40%
WWF Breads
Bread
160,000
35%
Beaver Tails
Marinated Chicken
48,000
50%
Value-added Salads
Salads
48,000
65%
Value-added Juices
Juices
160,000
60%
Dips, Jams,
Cookies
224,000
40%
1,600,000
41%
Cacklebury Max
Sunripe Branded
Others
TOTAL

7. Why did Sunripe’s private label strategy
work out well?
Specific Products
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Charcoal Beef: Sunripe was the
only retailer in that trade area to
prepare beef in the traditional
way (natural aging, corn-fed).
Charcoal Beef outsold packaged
beef by a 2:1 margin
Cacklebury
Max
Chicken:
Prepared in the traditional way
(grain-fed and air-chilled), it did
not shrink in weight while being
cooked. Parity pricing was
followed
Brick Bread: Prepared as a
handmade, heavy, dense, ovenbaked with a soft crust. Midrange price followed
Success Formula
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Products were prepared in the
traditional way, the way customers
liked it
These methods of production were
not
followed
by
general
supermarkets
The private label products were
priced similarly to other high-end
supermarkets
Processes were in place to ensure
that the products were always fresh,
without any blemishes
The display was appealing, to
avoid rummaging by customers
Sunripe’s spoilage rate (0.5%) was
well below the industry average (810%)

8. Outcomes of the Private Label Strategy
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A competitive advantage was created for Sunripe
Customer loyalty was being built steadily
It allowed Sunripe to build a brand for itself (e.g.: people
demanded Charcoal Beef by name)
The products gave customers enough reasons to drive
past supermarkets and come to Sunripe’s stores for
private labels which were available at Sunripe only
Sunripe adopted a parity-pricing system and hence, did
not play on price. It focussed more on quality, value
addition and freshness, things which mattered more to
its target customers
The entire category generated 5-10% higher average
gross margins than other brands
Costs were under Sunripe’s control itself as it sourced
and manufactured its own private label products

9. What were Sunripe’s competitors doing?
Loblaw's
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Two distinct private label
umbrella
brands
were
sold:
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At
higher-end
stores:
President’s Choice Brand
was predominant, which was
packaged in premium quality
wrappers,
positioned as
premium private labels of
high quality at prices similar
to national brands
At economical No-Frills
stores: President’s Choice
products were mixed with
discount-priced No Name
brand of private label
products
Great Atlantic & Pacific Company
(A&P)
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Private label products
were positioned as lowcost
alternatives
to
national brands
Umbrella
brands
included Master Choice
(higher level products)
and
Equality
(lower
priced products)

10. Decision Dilemma
The Current Scenario
Willemsen believed that having
distinctly branded private
label items (distinct from the
Sunripe brand) allowed each
product to develop its own
brand image and recall
However, Sunripe’s competitors
focussed on a single umbrella
brand for their private labels
Customer Response to the Current Strategy
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Sunripe’s customers, being drawn to the store by the fresh
produce, were satisfied with the quality, taste and price of
the products
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A significant number of customers purchased private label
products at Sunripe
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The Sunripe brand was well-known to its loyal customers
and was already being used on some items like jams
Alternative available
Leverage the Sunripe brand with
extensions
into
additional
private label and value-added
products (single umbrella brand)

11. The Way Forward
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Continue with the existing strategy of carrying both distinctly branded private label
products and value-added products (Sunripe umbrella)
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Juices and salads are not frequently purchased staple items, as compared to the private label
meats and bread being offered
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Though Sunripe branded products have better margins, the private label brands have much
higher annual sales
There is very clear demand and customer satisfaction for the existing private label brands,
hence, replacing them with Sunripe-branded equivalent products is undesirable
However, Sunripe-branded products have a promising future, hence, based on
customer profile and suggestions, new items can be introduced such as exotic
fresh foods, gourmet items, etc.
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Possible risks: A single unsatisfactory product can ruin the entire brand image of Sunripe, so
adequate care must be taken to prevent this
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Sunripe can leverage upon its well developed and trusted store brand of considerable repute
Introduction of too many new brands under the Sunripe umbrella should be disallowed to avoid
confusion and brand dilution
The same rigourous focus on quality and freshness should be continued and the
parity-pricing should be maintained. A premium can be charged on products which
provide a distinct competitive advantage to Sunripe

12. Thank You!