Walmart follows trend with launch of branded food line
Plant-based options, ‘chef-inspired’ items are added. Can it build a following as Trader Joe’s and Costco did?
Trader Joe’s has its iconic Two-Buck Chuck, chocolate lava cake and dumplings. Costco’s in-store brand, Kirkland Signature, is so beloved that shoppers recently swarmed to buy loungewear bearing its logo.
Now Walmart wants in on the hype.
On Tuesday, the retail giant launched a line of storebranded groceries, stocking shelves with items such as hot honey seasoning, a frozen dessert made of oat milk, strawberry-flavored sparkling water and several offerings for shoppers avoiding gluten or added sugar.
The line, called Bettergoods, marks a push by Walmart to build a more loyal base of millennial and Gen Z shoppers. It also is looking to seize some of a market dominated in recent years by companies such as Monrovia-based Trader Joe’s and Costco, whose storebranded items — think Trader Joe’s peanut-butterfilled pretzel nuggets and Costco’s 3-pound bag of walnuts for less than $10 — have built cult followings of their own.
Private-label store brands have grown more popular in recent years as consumers have faced rising costs. Supermarket giant Kroger Co. previously announced it plans to add more than 800 private-label products this year.
“Walmart wants not only more younger consumers, but loyal younger consumers. Consumers who will stick around even when they can return to shopping at more expensive brands,” said Sara Lebow, a senior analyst at EMarketer, a market research firm.
Most of the new Walmart items will sell for less than $5, and the priciest will top out at around $15, according to a statement from the Bentonville, Ark.-based company.
Lebow said the retailer, whose $98-a-year Walmart+ subscription plan is vying to compete with Amazon’s Prime, probably sees the new food line — “more upscale-looking options at affordable prices,” she called it — as a step toward ensuring that consumers who sign up during times of high inflation or during busy shopping periods such as the holidays don’t cancel the service later.
Scott Morris, Walmart’s senior vice president of private brands, food and consumables, described the line as “quality, unique, chef-inspired food at an incredible value” — a nod to the premium consumers put on both trendy, flavorful foods and cutting costs amid stubbornly high inflation.
Lebow, who hosts a retail podcast that did a segment recently on Trader Joe’s and other grocers with passionate, loyal customer bases, said it’s hard to compare a behemoth like Walmart with the far smaller chain. Costco’s success building a cult following among “people who are proud of the fact they buy cheap goods” is more akin to what Walmart likely is hoping to achieve, she said.
Lebow recalled spotting someone recently who was wearing a sweater with the Kirkland brand logo emblazoned across the chest. She called it a clear example of the “loud budgeting” trend on TikTok, the counterpoint to the “quiet luxury” trend, in which many pricy brands have in recent years opted to use logo-free branding.
The new Walmart items fall into three categories: items geared toward food trends, plant-based options branded with green packaging and “Made Without” products for shoppers looking for items without gluten, added sugar or artificial flavors or colorings.
Among items customers can now find on shelves: a container of hot honey seasoning for around $3, an oat milk dessert for $3.44 a pint and a line of soups served in jars for around $4.
The addition of 300 items will mean less coveted shelf space for other brands fighting for placement in stores.
The launch, which was reported first by the Wall Street Journal, comes as Walmart scales back investments in other areas, including closing several health clinics it opened in recent years.
A Walmart spokesperson declined to say how many people would lose their jobs but said the clinics probably would close in two to three months.