Bartell’s new private label focuses on local products

Taking a page from successful retailers such as Trader Joe’s and Costco, Bartell Drugs is deploying its own private-label brand.

Dubbed “Emerald & Spruce” and launched late last year, the brand seeks to highlight Bartell’s connection to Seattle and the Puget Sound region.

Containers for its ice cream, made by Snoqualmie Ice Cream, are ringed with colorful triangles that evoke the mountains that surround Seattle; they sport names such as Capitol Hill Coconut, Viaduct Vanilla and Sammamish Salted Caramel. Packages for dog treats made in Monroe come with a map of local dog parks on the back.

Jean Barber Bartell, who is the granddaughter of the company’s founder, and the vice chairman and treasurer of the 63-store pharmacy chain, said Emerald & Spruce will focus on local products and a “Trader Joe’s-type idea, where it’s good value, but it’s still good.”

Bartell’s experiment, which comes as the Seattle-based chain celebrates its 125th anniversary, underscores how much the image of private-label products has changed.

Once associated with cheap, low-quality goods, these days private labels are perceived differently: While still providing good value, they’re not necessarily the cheapest option available. And they can even generate some glamour, as Costco has found with its Kirkland brand, which the warehouse giant puts on everything from tuna to bottles of Scotch costing several hundred dollars.

Consumers flocked to private-label brands during the recession in order to save money and evidently decided they were pretty good. A recent study by Deloitte found 88 percent of consumers thought private labels were as good as national brands. Those heavily advertised national brands are now feeling the pressure.

Retailers also find that private labels are often more profitable, offering higher margins than national brands and giving them more bargaining power versus big-brand manufacturers, according to research by experts at the Yale School of Management.

For Bartell, the benefits of a private label are clear: It can buy products more cheaply at the wholesale level because manufacturers do not bake in the huge cost of marketing and advertising. That offsets whatever extra cost there is in designing the brand and the packaging, and it allows a higher margin.

The effort also helps Bartell differentiate itself from a bevy of competitors, ranging from grocery stores to national drugstore chains such as CVS, which recently entered the region.

Barber said the company used to market over-the-counter products under its own Bartell Drugs banner years ago. But the retailer was sometimes a low priority for large-scale manufacturers and had trouble getting its orders filled on time “because we weren’t that big,” Barber recalls.

So Bartell now partners with other regional chains that together have about 1,000 stores to sell these products under a collective private label, Premier Value.

But in the case of Emerald & Spruce, Bartell is dealing with smaller, local manufacturers for whom the chain is a big client, Barber said.

That doesn’t mean there haven’t been challenges already: In December Bartell issued refunds for its ice cream after a listeria recall by the manufacturer, Snoqualmie Ice Cream.

Barber says that the effort so far “is working well. It’s performing as we hoped,” she added. Bartell, which is a privately held company, keeps actual sales figures close to its chest, however.

Emerald & Spruce was created by Hornall Anderson, a brand agency based in Seattle. The idea was to play up Bartell’s being “Northwest neighbors, really delivering an exceptional experience,” said Michael Connors, the firm’s vice president of design. The agency toyed with a bunch of names — they were close to calling it “Hopscotch.”

But Emerald & Spruce — the words projected against a circle that resembles the cross-section of a tree — won out. The brand also has a pattern: a colorful patchwork of triangles that some consumers feel represents a mountain range interspersed with lakes, with lines and dots some see as rain or rivers, according to Connors.

So far Bartell is only selling ice cream, vitamins and dog treats under the Emerald & Spruce brand. Due to staff limitations, “we can’t roll out the quantity of product someone like Trader Joe’s can roll out,” Barber said.

But more stuff is coming: “At some point we’re going to have our own coffee.”