In the rapidly changing landscape of grocery retail, regional cooperatives like Topco play an invaluable role for their members, especially as they confront fierce competition from both national brick-and-mortar retailers and e-commerce giants. Executives from notable regional chains, including Jeremy Gosch of Hy-Vee, Pete Van Helden of Stater Bros. Markets, and David Rice of Associated Food Stores, recently discussed with Progressive Grocer the critical importance of their association with Topco and how it enables them to remain competitive.
Understanding the Cooperative Advantage
Topco functions on a cooperative model that is essential for independent regional grocers. This model fosters collaboration rather than competition among its members, allowing them to work together to secure better pricing, marketing support, and access to high-quality private label products. For many regional grocers, the cooperative model offers a unique advantage. As Gosch explains, “Our relationship with Topco allows us to compete with others that are much bigger than Hy-Vee,” ensuring they can deliver value to their customers while maintaining competitive pricing.
The current grocery market is characterized by national retailers that dominate shelf space and pricing power. In contrast, the cooperative’s unique model offers not just collective bargaining power but also shared resources and knowledge. This is critical, especially in an era dominated by large mergers and acquisitions in the retail sector. Van Helden notes that “Topco represents the little guy,” providing tools and resources that smaller retailers could not manage alone.
Access to Product Diversity and Quality
One of the key benefits of Topco is its extensive catalog of private label products. Such offerings are often inaccessible to smaller retailers due to the high costs of product development and sourcing. The cooperative model alleviates these barriers. David Rice emphasizes that “the foundation of our relationship with Topco is the selection of private brands they offer,” which allows retailers to enhance their product range without facing the financial challenges of creating their own.
For example, Hy-Vee leverages Topco’s expertise to enter product categories like paper goods, which would otherwise be unfeasible as an independent entity. Gosch highlights that joining forces allows his team to create a private label paper program that combines quality and variety, ultimately providing greater product selection for their customers.
Overcoming Challenges with Cooperative Support
The ability for Topco members to adapt quickly during unforeseen challenges has proven invaluable. Van Helden cites the example of Stater Bros. losing a cottage cheese supplier. Due to their relationship with Topco, they seamlessly transitioned to offering a private label cottage cheese under the Food Club brand. “If it wasn’t for Topco, Stater Bros. would not have had a private label line of cottage cheese,” he points out.
Moreover, the collaborative environment promoted by Topco encourages members to share production knowledge and strategies. As more than just a vendor, Topco embodies a collective spirit that enhances camaraderie among its members, ultimately translating into better market performance.
Meeting Diverse Retail Needs
Topco’s diverse membership extends across the United States, encompassing grocers in varied markets from California to Virginia. Each member, regardless of location, faces unique challenges in securing suppliers for specific product categories. As Gosch explains, “Finding a supplier of frozen potatoes is challenging. But those are the things Topco can do for us.” This alignment toward finding solutions collectively ensures that all Topco members can deliver quality products at competitive prices.
The cooperative’s strength is bolstered by a commitment from its members. Van Helden highlights this, noting that “the move to having committed members has made Topco a much stronger organization.” By consolidating volumes from committed retailers, Topco can negotiate better deals with suppliers, benefiting all members substantially.
The Evolution of Private Label Products
The evolution of private label brands has been significant in recent years, with Topco guiding many of its members through successful product development efforts. For instance, the Crav’n Flavor product line represents a shift from previously unsuccessful products to ones that directly target consumer demands. As Gosch reflects, “the key is getting a quality product at the right price,” leading to items that rival national brands in both quality and pricing.
Even as technology continues to revolutionize retail, smaller retailers can remain competitive through their partnership with Topco. A focus on technology allows members to share resources, streamline operations, and improve overall efficiency.
Looking Ahead
What does the future hold for members of Topco? There is no shortage of opportunities. As mentioned by Gosch, areas such as retail media, supply chain procurement, and technology integration are ripe for development. The collaborative nature of the cooperative empowers its members to bring ideas together and create actionable strategies that benefit everyone involved.
Topco’s initiatives around improving product offerings and enhancing brand perception through successful private label marketing are set to continue transforming the grocery landscape. Rice concludes, “Topco gives us a place as regional retailers to come together and develop solutions,” showcasing the cooperative’s pivotal role in maintaining competitive edges for its members.
By joining forces through Topco, regional grocers are not merely surviving against their larger counterparts; they are thriving, showcasing that cooperation remains a powerful driver of success in the grocery sector.