Dive Brief:

• Target on Monday announced the launch of Good & Gather, its largest food and beverage brand to date. The new flagship line, which will roll out across kids, natural and organic, signature and seasonal categories, will be available in stores and Target.com for same-day delivery starting September 15.
• By the end of 2020, the brand will more than 2,000 products including dairy, produce, ready-made pastas, avocado toast salad kits, beet hummus, granola bars and sparkling water. All products are made without artificial flavors, sweeteners, synthetic colors and high fructose corn syrup.
• Good & Gather products will replace the retailer's Archer Farms and Simply Balanced food brands. It will also scale back on the number Market Pantry products it offers, "simplifying the food and beverage shopping experience," according to Target. 

Dive Insight:

Target's grocery efforts have intensified over the past few years as it's rolled out improved sets, dedicated grocery teams and food retail accelerator programs. Although the retailer has seen comps growth in food and beverage over the past seven quarters, it still struggles to be seen by consumers as a proper grocery store. 

"In our view, the new label is a major step forward that introduces excitement and interest to the food department," wrote Neil Saunders, managing director of GlobalData Retail, in an email to sister publication Grocery Dive. "Good & Gather both creates a more cohesive and compelling food offering as well as being a platform for the launch of some new and interesting lines which should entice consumers."

By unifying the majority of its grocery offerings under one brand, Target is bucking the industry trend of grocers rolling out a variety of private label brands across value, specialty and premium lines. According to the release, years of research and R&D investment went into ensuring the line encompasses all of the latest consumer demands including convenience, free-from products and everyday items. 

Private label can help Target gain store loyalty and offers higher profit margins than national grocery brands. It also sharpens Target's positioning as it goes head to head with big retailers like Amazon and long-time competitor Walmart, both of which are rolling out their own private label grocery lines. In an interview with CNBC, Stephanie Lundquist, the company's head of food and beverage, said 75% of shoppers are grabbing at least one food product when they shop — and when they do, their baskets are twice the average size.

"Target’s announcement that it was upping its food game with its new 'Good & Gather' initiative is credit positive as it will drive additional traffic, which in turn will drive increased sales of higher-margin private and exclusive non-food items,” said Charlie O’Shea, vice president of Moody’s in an email to Retail Dive.

Target has devoted significant resources to launching and relaunching private label lines across its stores. This includes furniture, household cleaning products, apparel and electronics. Over the past three years, Target has rolled out more than 20 new store brands.

"During its recent strategic transition, food was not a primary focus, and this new initiative is a necessary change for the company as it continues to improve its competitive position," O'Shea wrote.

Target has been focused on other parts of its business, as well. This includes e-commerce initiatives like store pickup and its Shipt same-day delivery service, which recently expanded payment options to include a flat $9.99 per order. Target is also rolling out store remodels, lowering prices and enhancing its digital capabilities.