Global Retail   //   May 6, 2024

Why Ace Hardware is selling its own private-label line of barbecue sauces and seasonings

There’s a new retailer getting into the private-label food business, and it isn’t your local Walmart or Target. It’s Ace Hardware. 

On April 25,  the Oak Brook, Illinois-based retailer debuted a store-owned product line of barbecue sauces and seasonings developed by the company exclusively for Ace stores. It’s the retailer’s first store-owned line of edible products. The assortment, known as Loud Mouth, includes two flavors of sauces, all priced at $8.99, and five different types of rubs, which cost $6.99 per bottle. The products are available at the hardware chain’s warehouses for its cooperative of nearly 5,000 locally-owned stores in the U.S. to pull from year-round. 

Store-branded goods have increasingly become a go-to for many shoppers. Private-label brand sales climbed 6% year-over-year in the U.S. to $217 billion in 2023, according to research firm Circana. Retailers are racing to cash in. In February, Target launched a new budget brand dubbed Dealworthy, offering shoppers everyday necessities at prices starting at less than a dollar. Last week, supermarket giant Walmart rolled out a private-label grocery brand geared toward Gen Z shoppers called Bettergoods. Like other retailers, Ace is betting on private-label goods, which are typically cheaper than big-name brands, to bring in higher margins while catering to price-conscious shoppers.

“We felt like we had you know the opportunity to really provide something that was high-quality at a mid-price point, ” Ace’s Director of Retail Innovation Melanie Hill said in an interview.

Historically, the lure of a store-owned brand was the price tag. Indeed, the recent surge of low-cost offerings from retailers comes as shoppers are feeling the squeeze on their wallets. U.S. consumer confidence fell in April for the third consecutive month to the lowest since July 2022, according to data released last week. The Conference Board survey found that elevated prices for food and gas, in particular, have weighed on American shoppers. It’s no surprise that consumers have been reaching for cheaper offerings in recent years amid the highest inflation in decades. 

“We’re in a very value-conscious market right now, where people are trying to save money, and that’s why you’ve seen new offerings from Walmart and Target that are both focused on value,” said Jason Goldberg, chief commerce strategy officer at Publicis Groupe. “The play to create owned brands is super timely and super smart.”

Nevertheless, the latest crop of store-owned lines, which include catchy names, bright, colorful packaging and premium ingredients, represent a new generation of such products. These days, generic brands can even carry a certain amount of cultural cachet, like 365 by Whole Foods, where the average shopper makes $80,000 a year. In other words, style and quality are just as important as price when it comes to grabbing shoppers’ attention. As generic goods continue to take over supermarket aisles, Ace’s foray into the creation of sauces and rubs is a sign that the trend is catching on among non-grocers, too. 

For Hill, the venture represents a bid to boost loyalty and demand for all things Ace Hardware. 

“We know a lot about the barbecue consumer. They walk into our stores every day,” said Hill. “We sell grills and accessories, so private label seemed like a natural fit to round out that offering.”

Production got underway about a year ago, said Hill, who previously worked at outdoor grill manufacturer Weber. Ace partnered with Old World Spice to help develop the flavor profiles. From there, the hardware chain conducted taste tests, came up with ideas for a marketing campaign and got the items produced. As part of the line’s marketing push, Ace will throw summertime barbecue parties at its store locations, where the seasoning and rubs will be demoed. 

While Ace has no immediate plans to develop more store-owned food products, Hill said the door is always open in the future. Food aside, Ace has looked to attract more shoppers to the brand a newly launched private-label line of apparel clothing, called Vintage Threads, which is sold in retailers like Urban Outfitters and Nordstrom.

While it stands to reason that a shopper going to a hardware store to buy a grill would also pick up a bottle or two of barbecue seasoning during the same trip, the frequency of such types of purchases could prove to be a hurdle for Ace, said Goldberg.

“Most people are going to buy a grill every five or ten years, and it’s unlikely Ace is going to be the destination for replenishment of barbecue sauces and rubs for a customer that’s grilling every week,” he said. “It’s a very ambitious and challenging category to enter.”