Decadent ice cream bars, chocolate lava cakes, French brioche and blueberry streusel are just a few of the more than 700 food and beverage items Target Corp. hopes consumers will savor when on April 5 it launches Favorite Day, its newest owned brand.
The retailer wants to capture the wallets – and palates – of consumers who started to appreciate life’s small pleasures during the Covid-19 pandemic and are looking for ways to satisfy their taste buds. Favorite Day’s sweet and savory products spanning categories such as bakery, snacks, candy, premium ice cream, beverage mixers and mocktails, among other things, are designed with indulgence in mind, and priced below $15.
Over the past five years, Target TGT has launched 30 owned brands, from women’s apparel labels with inclusive sizing, such as Auden and Colsie, to home collections for babies and kids like Cloud Island and Pillowfort. Ten of the retailer’s brands generated $1 billion or more in sales last year, and four hit the $2 billion threshold.
Favorite Day’s sweet and savory treats will complement Good & Gather, the retailer’s flagship food and beverage brand, which generated $2 billion in sales in 2020. Target a year ago launched Good & Gather Signature, a premium line of 60 items such as gourmet pizzas, small batch pasta sauces and specialty coffees, which joined the brand’s more than 2,000 products.
“We’re thrilled to build on Good & Gather’s success and the strength of Target’s food and beverage business by launching Favorite Day,” said Rick Gomez, executive vice president and chief food & beverage officer at Target. “Rooted in guest insights and developed by our talented Target team, Favorite Day is a sweet and savory addition that tastes amazing and makes life’s little moments of indulgence even sweeter, while continuing to differentiate Target’s owned brand portfolio.”
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Target approaches each of its brand the same way, by conducting consumer research to understand what shoppers want. Favorite Day was no different. The retailer consulted 11,000 guests during multiple rounds of research to perfect its recipes, and learned that “guests believe in treating themselves as a balance to everyday schedules and stressors,” Gomez said.
Target’s fourth quarter comparable sales grew 20.5%, reflecting comparable traffic growth of 6.5% and a 13.1% increase in average ticket. Store comparable sales increased 6.9%, and digital comparable sales grew 118%, accounting for two-thirds of the retailer’s overall comp growth.
The retailer is expanding the assortment of fresh, refrigerated and frozen food items available for pick up and drive up, services that will be available for Favorite Day, along with same-day delivery from Shipt. Target said consumers who first shopped for items through one of the services last year, increased their shopping frequency by one visit per month. On average, these customers raised their food and beverage spending by between 20% and 30%, while spending about 20% more in other categories.
Target CEO Brian Cornell, during the retailer’s March 2 meeting for the financial community, said investments in food and beverage have paid off with strong results, however, categories that are consumed mostly at home, including food and beverage, essentials, home and hardlines, which accelerated over the last year, could see some softness the country emerges from the crisis.
“Good & Gather is off to a tremendous start, a multibillion-dollar brand in a short period of time. It’s been well received by our guests, it’s great quality, and a great value. It typifies the things we do with our owned brands,” Cornell said. “We’re very excited about the momentum we [have] in food and beverage. We took significant market share throughout the year. The guest has certainly recognized and appreciates the Good & Gather brand. We think that’s a way for us to continue to differentiate our offerings.”
Target food scientists leaned into nostalgia and added their own twists to products such as smores, chocolate bark with Golden Graham pieces, and a newfangled take on the classic ice cream truck orange ice cream bar, turning it into a trail mix. One of the taste-tester favorites is an ice cream flavor made with cold brew Columbian coffee, caramel swirls and espresso-chocolate chunks with bits of coffee grounds that melt on the tongue.
The Favorite Day assortment will also include macarons and non-dairy frozen desserts, baked goods such as cupcakes and artisan breads like ciabatta, candy and cake decorating supplies, including sprinkles, candles and icing, all backed by a money-back guarantee.
The retailer tried to find a food and beverage brand that checked all the boxes, including being designed around celebration and indulgence with a wide variety of categories. It said no such brand existed, so in typical Target style, it decided to create a brand from scratch.
Source: Forbes – Business