Regional Market and Food Co-packer Partner for Private Label Success

Learn Walt Churchill Signature Foods' Recipe for Profit and Customer Delight

Walt Churchill salad dressing
Co-packer Case Study. Walt Churchill's Market

Walt Churchill's Market (WCM) is an old-time Ohio business known for rare and interesting items, exceptional customer service, unparalleled variety and connections to Midwest producers. Owned by the founder’s grandson, WCM decided to develop a store brand so customers could take home food products similar to those they so often enjoy at the stores’ deli departments. 

The Walt Churchill Signature series of foods, co-packed with Milo's, has met with great success, featuring in store recipes developed by this regional grocer’s award-winning chefs.

Learn step-by-step how and why this regional grocer went about creating this successful food product line with a co-packer.

How the Idea to Develop a Co-packed Store Brand Came About

The journey began in 2012 when a local glass company approached the grocer, suggesting they create a sauce that would work well in a new jar the glass company wanted to launch.

Coincidentally, WCM had been discussing developing a private label food line. The two companies decided to collaborate, and a WCM chef developed a marinara sauce recipe based on a sauce that customers had enjoyed in various dishes at the deli counter.

Searching for the Right Co-packer

Initially Kunal Dawar, assistant store manager who also handles purchasing and advertising, chose a co-packer, or contract manufacturer, whose production minimum for the marinara exceeded the level of inventory they would be able to store and sell quickly. They went on a search for another co-packer who could still produce efficiently with the quality.

(Here are tips on working with co-packers.)

They chose to produce the marinara product in partnership with a nearby co-packer Milo’s which for 12 years has been making a wide variety of branded items, from salsa to pasta sauce to salad dressings—and, it turned out, with an owner whom Kunal had met previously, Jonathan Milo Leal.

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Measuring Results: Co-packed Marinara Sauce is a Winner!

When the Walt’s Marinara launched in 2012 they had high expectations for a good reason:  the sauce was delicious. However, at the time, the the sauce had lots of in-store competition from other pasta sauces, ranging from $10 all the way down to $1.19.

They priced the private label product at $8.49. Well played. “We sold more product than we expected in the first two weeks. Since then we lowered the price to $7.99 after we reduced the jar size by two ounces to 24-ounces from 26,” says Kunal.

How Product Development With the Co-packer Works

Strategy: Kunal says, “We see what’s working for us in the deli then consider how we can create a private label shelf-stable item like the marinara sauce which is used in our deli to create chicken parmesan.”

Because of the breadth of Milo’s product knowledge, they are well-positioned to help retailers like WCM create and produce store brand lines based on their own signature recipes.

Estimate: The Milo’s production team estimates how many hours development would take, based on  recipe complexity, and comes up with a project fee. A complex recipe means more trial and error which leads to higher cost.

Development and production: Milo’s has a full-time chef on staff who can take any product, like the cocktail sauce similar to WCM's refrigerated version which they sell at the fish counter, and reverse-engineer it to create a shelf-stable version. Says Jonothan, "We often get customers who have a finished product but don’t have an actual recipe, for one reason or another.  Our chef can help figure out the recipe, and work to make a duplicate version that hits the cost point the customer is looking for.”

Once the recipe is approved, Milo's produces, packages and labels the food products.

Testing: Milo’s also handles shelf-life testing, working with a nearby lab which also does an ingredients analysis.

(Part 2)

Clear Guiding Principles Are Key To Private Label Product Success

After WCM's successful marinara launch came Walt Churchill's Signature Series Salsa Rustica and a Honey Chipotle BBQ  sauce also developed with co-packer Milo's. WCM also conceived of a Greek Feta Dressing for which Milo's created the recipe from scratch.

When working with a co-packer, or any third party, it's especially important to clearly define and document the desired results.

The following fundamental principles guided the WCM product line—serving as a point of reference should any decision points arise:

Versatile: The WCM team wanted to create a versatile sauce that could be used with chicken, grilled vegetables, as a bread topper like bruschetta and with seafood to make a cioppino stew. They wanted the sauce to pair well with any pasta, from straight noodles to cut pasta. More recipes = more sales!

Natural: The goal was to create a natural food free of chemicals and preservatives. “We have an agreement with Milo that whenever we make a tomato product we are going to use locally sourced ingredients.” Tomato products for Walt Churchill’s Signature Series Marinara Sauce, Salsa and Cocktail sauce are sourced from Hirzel Canning Company in Toledo, Ohio, a company with a rich family history who are long time friends of the WCM team.

Real Ingredients: Before creating the Greek feta dressing, they had considered a bottled cilantro lime dressing, based on a fresh, refrigerated version made in-house.

When the lab reported that the shelf-stable version of the dressing couldn't use fresh cilantro, they scratched the plan.

Such a decision is known as a must-have. Know your must haves.

They were, however, able to make a cocktail sauce using fresh horseradish.

This is an important lesson that each ingredient and recipe has its quirks that need to be tested and analyzed.

Take These 5 Lessons For Developing a Private Label Store Brand

As the company introduces new private label items, they learn from previous projects. Some key learnings include the following.

Cross-promotion works: In addition to dedicating extensive shelf space to the Walt Churchill’s Signature line, WCM drives sales by cross-promoting the products in the deli. For example, chicken parmesan eaters see a sign that says "Made with Walt's Marinara sauce." They promote the products in ads as well as discounts in conjunction with demos.

Experiment: WCM thought Honey Chipotle would appeal to more people; they stopped making the BBQ sauce due to low demand. The chipotle was a little spicy for our customers (then again after they stopped making it, customers started asking for it).

Be flexible: WCM has transitioned from its original jars to a more "stock" jar that Milo’s sources, which helps keep costs down.

Keep good relationships: Notice that the ingredients, packaging and co-packer all came together based on good relations with the WCM team. Making the right decisions comes more easily with happy collaborations.

Commit to quality: Customers aware of WCM's consistent good taste can trust the company’s house brands.

Says Kunal Dawar of WCM, “We only put our name on the best tasting products that are the best value for our customer. We want to focus on items that will become a family favorite, that people will pass on to their friends as trustworthy and quality products."

An Additional Private Label Line

WCM works with different food manufacturers to private label excellent products with the WCM brand—such as existing coffee, canned peanuts, packaged nuts, seasonings, olive oil and pickle products. 

In some retail stores, “private label” implies cheap and not so good. Not so for Walt Churchill’s Market. Says Kunal, “When we do a private label item we source products that we strongly believe in and that will taste good.” For example, they were sourcing good quality, locally produced honey for the Honey Chipotle BBQ sauce.

For Grocery Stores Partnering With a Co-packer is a No Brainer

Partnering with a co-packer, whether a larger factory or a local artisan making foods similar to those you wish to sell, can help retail stores:

  • add another source of revenue
  • build brand equity
  • put the retailer in control of proprietary merchandise that makes a store special

All without the hassles and expense of setting up your own production facility.

Aspiring food product entrepreneurs wanting to focus more on marketing than manufacturing can take these same lessons to find a co-packer and get your foods on retailer shelves.