How is the For More Value (FMV) company tied into Kroger

Factual Questions
1

Kroger sells alot of products which are made by some company called FMV. FMV = For more value. What is this company exactly, is it an independent company or one tied into kroger? I know that Wal-Mart has alot of products by a company called Equate but if FMV is a Kroger subsidiary why don’t they just sell their products under the Kroger name? I don’t see how else they could get their products as low priced if they weren’t tied into Kroger somehow.

This may be my most useless post yet.

2

in a word, yes.

I was, frankly, surprised. I thought they just had Kroger Brand, and Private Selection as the premium lable. I was unaware of the economy line. As an aside, I have had very good luck with Kroger brand items, for the most part (stay away from the A-1 sauce knockoff, though).

3

Hmm. I see my pithy way to give a linked answer made less sense than I thought. Next time, we will try preview!

4

http://www.foodprocessing.com/Web_First/fp.nsf/ArticleID/THAR-4YCPKX/

This site explains the reasoning in detail, but in a nutshell:

Private labels don’t increase sales, but they increase profits. The FMV is the Fred Meyers label that Kroger optained when they bought it. Kroger west had a lower market share of private labels than Kroger east. Kroger kept the familiar FMV label to increase the base of profitablility while expanding the other two Kroger private lables were introduced to the new customers.

Eventually FMV may disappear, but Kroger may keep it around as another label to use in its other other non-Kroger named stores. Remember,Kroger is a major food manufacturer.

Why do I care about this? I used to work for K-Rodger some years back and nurse a grudge against them. Good business, but bad personel handling.

5

I googled “FMV” + “Kroger”.

Result number three told me the answer to your question.
Kroger has three levels of “Store Brand”. FMV products are the lowest-priced and lowest value-add of those three levels.
www.kroger.com/globalincludes/corporate_pdfs/sec4.pdf

The following explains it.
Kroger private-label products are produced and sold in three quality “tiers”:

  1. Private Selection is the premium quality brand designed to meet or beat “gourmet” or “upscale” national or regional brands or can be unique items. Ten of our Private Selection products have earned the Good Housekeeping Seal, one of the most widely recognized symbols of quality and value in America. At year-end 2002, Kroger offered approximately 600 different Private Selection items.
  2. Our “banner brand” (Kroger, Ralphs, King Soopers, etc.), which represents the majority of our corporate brand items, is designed to be equal to or better than the national brand and carries the “Try It, Like It, or Get the National Brand Free” guarantee in most divisions.

Page 2
The Kroger Co. 24
Before Kroger will carry a banner brand private label product, it must meet three tests:
A. Quality must be equal to or better than the national brand
B. Must be able to sell at a retail price lower than the national brand equivalent
C. Must be able to make more pennies profit per item
3. FMV (For Maximum Value) is the value brand that is designed to deliver good quality at a very affordable price.
Kroger’s three-tier corporate brands strategy generates enhanced profit margins. Our “good, better, best” approach enables us to serve a broader customer base than before the merger with Fred Meyer.

6

And Equate is one of Wal-Mart’s house brands.