CDMA, Federated sharing private-label brands

March 20, 2006

Why would a company that specializes in sales and marketing to the grocery, food service, drugstore, and convenience store business and an association of regional drugstore chains form a strategic alliance? If you are Federated Group and the Chain Drug Marketing Association (CDMA) the answer is to reap the benefits of sharing private-label brands.

Why would a company that specializes in sales and marketing to the grocery, food service, drugstore, and convenience store business and an association of regional drugstore chains form a strategic alliance? If you are Federated Group and the Chain Drug Marketing Association (CDMA) the answer is to reap the benefits of sharing private-label brands.

Ken Hillman, VP of account services for the Federated Group, Arlington Heights, Ill., told Drug Topics that Federated's customer base will have access to CDMA's Quality Choice brand of health and beauty care (HBC) products. Meanwhile, CDMA will be able to offer its members several of Federated's brands, which the company owns and sells to grocery customers.

Commenting on the partnership, James Devine, CDMA president, told Drug Topics, "We're excited abut the Federated alliance, not only for our large chains, but also for our regional wholesalers. This partnership will allow them to put commodity items in their warehouses and stores that they couldn't buy because of quantity restrictions or because the items weren't priced right. Now they can buy as little as a case, together with their Quality Choice items and at a competitive price so they can compete with Dollar Stores and mass-merchandisers."

"We'll expand based on what we believe is the best mix of products. We'll try to be sensitive to launch in a way that they can take on the initial lineup and have some successes and then take part in the program. This is a great opportunity for Federated to focus on regional players who may not have enough scale on their own to compete with chains such as CVS or Walgreens. This gives CDMA members the ability and scale to compete effectively," asserted Hillman.

Federated recently delivered sample boxes of its product line to 100 CDMA members.

Hillman believes this partnership will enable regional retailers and wholesalers to meet customer needs and create a compelling shopping experience. "If we don't create such an experience, shoppers won't come to our stores. We have to be competitive in price and have these compelling offerings and good customer service," he said.