CINCINNATI — The Kroger Co. plans to add 80 new protein-focused products to its Simple Truth natural and organic brand.
Ronald Sargent, chairman and interim chief executive officer, disclosed the upcoming rollout when reporting fiscal 2025 first-quarter results. The new product launch for Our Brands, the name of Kroger’s private label portfolio, will be “soon,” he said.
“Our Brands is creating new products that support customers’ healthier eating habits; for example, earlier this year, we identified protein as a major customer trend,” Sargent told analysts in a conference call. “Targeted directly at this important trend, these products include everything from bars and powders to shakes, all from a natural and organic brand that customers trust. This is just one way that Kroger and Our Brands are innovating to stay ahead of what our customers want.”
Kroger saw identical sales excluding fuel rise 3.2% in the first quarter, with Our Brands as one of the catalysts along with fresh food, e-commerce and pharmacy.
“As more customers search for value, we are excited about the potential for Our Brands business,” Sargent said. “We’re growing sales by offering high-quality products to customers at all budget levels. This quarter, Our Brands grew faster than national brands for the seventh consecutive quarter. Simple Truth and Private Selection led our sales growth, highlighting that customers want premium products while also spending less.”
In response to an analyst question on Our Brands’ growth, Sargent said the opportunity for the portfolio “could accelerate even further in the years ahead.”
“The quality is terrific; it creates great value to our customers,” he said. “It allows us to lead the pack in product innovation. I referenced the Simple Truth protein line, but I think that’s a great example. People are eating healthier, so we’re going to jump on that trend. High-protein products also tie into customers using GLP-1 medications. And the best part about Our Brands is that it differentiates us from our competitors. There’s only one place you can get the Kroger brand or Simple Truth or Private Selection, all of it just at Kroger.”
A new study by consumer insight technology firm First Insight Inc. found that, of more than 1,200 adults polled, 34% said they’re more likely to shop at a retailer specifically because of its private label offerings. Furthermore, 45% said they’ve permanently switched from a national brand to a private label when the private brand product met or exceeded their expectations.
Over 90% of Kroger customer households purchased Our Brands items in fiscal 2024, when the Cincinnati-based grocer said it launched more than 900 new private label products, including 370 fresh items.
Among recently introduced Our Brands offerings, Kroger at the end of March rolled out five new products under its Private Selection, Simple Truth and Kroger labels. The items under the Private Selection brand include muffins in four flavors plus six varieties of salad kits. Under the namesake store brand, the retailer launched kettle-style tortilla chips and an Italian salad dressing, while an organic instant mushroom tea was added to the Simple Truth line.
In the product realm, Kroger also is keeping an eye on policy changes in Washington, DC.
“There’s certainly a trend going on in Washington to eliminate anything artificial, particularly in the area of (synthetic food) dyes,” Sargent said in answering an analyst question. “I think many CPGs are reformulating their products to address that and deal with that. And certainly, we’re all over that for Kroger brands and Our Brands. From a regulatory standpoint, I think we’re spending a little more time on tariffs than we are on artificial food ingredients, although our customers are looking to eat healthier and buy healthier products. And we are trying to respond to that.
“In terms of tariffs, we’ve really seen very minimal impact, and where we do see impacts in areas like produce, flowers, we are working very hard to mitigate that impact,” he said. “And we’re pushing back on any suppliers who would like to pass along the additional cost. We’re looking at some of the country-of-origin stuff, and we’re even discontinuing some items where it doesn’t make sense for our customers.”