Tesco, as readers will be aware, is the largest food retailer in the UK and now the third largest in the world. Inside the UK, the brand has a vast reach and outside of the UK is growing its international operations exponentially year on year.
By announcing in 2007 that it was entering the American market Tesco was fulfilling an ambition that it had been working on quietly for several years. The Fresh & Easy Neighborhood Market launch will probably become it's most significant effort at international expansion to date.
North America was always seen by the brand as a potentially lucrative market and therefore an opportunity for continued growth. As Tesco's CEO has commented, the company is looking to build a business there as big as in the UK, firmly believing that the American market can accommodate such an expansion in the food retail sector. To achieve this goal, the company plans to spend around $2bn over the next few years.
The speed at which the company is entering the American market with the Fresh & Easy concept is breathtaking. Based on a small- to medium-sized store format with a strong emphasis on freshness and convenience and also including a strong focus on ready-made meals, the brand is distinctly different from any current grocery retail offering, a fact that has already been positively commented upon by scores of Fresh&Easy shoppers.
Unlike other global brands attempting to enter the American market, Tesco opted for the development of an entirely new operation with small store formats that provided the most appropriate solution for the market and provide a refreshing counterpoint to the established "big box" format of the US hypermarkets.
To help it achieve success with the new brand, Tesco decided to bring with it longstanding UK suppliers such as 2 Sisters Food Group, a Midlands-based private company that supplies chilled fresh poultry and meat to Tesco's UK and European stores, and Pemberton & Whitefoord, the London-based branding consultancy that has worked on the Tesco roster for over 20 years.
There are currently plans to open more than 100 Fresh & Easy stores over the next few months in four regions which include Los Angeles, San Diego, Las Vegas and Phoenix. Unsurprisingly, embarking upon such an ambitious venture needed secrecy, not just from the Tesco team but from all the suppliers involved.
What Business Week colourfully describes as a "covert operation" began as early as 2005 by getting to know the American consumer's eating and shopping habits inside out. A team of management and anthropologists were embedded in no less than 60 American families examining their grocery preferences in minute detail. Tesco wanted to understand every aspect of the US consumer from a food retail viewpoint before it embarked on the Fresh & Easy venture.
Pemberton & Whitefoord was brought on board to help develop the brand in 2006. Working alongside the Tesco team, the American advertising agency Deutsch and the brand retail company Schorleaf, the end result was a unique brand that is distinct from Tesco's current UK and European look and feel, and entirely appropriate for the American market.
Much has been written about Tesco launching its stores in the US but the Fresh & Easy programme required a lot more than simply "importing" a Tesco Express or Metro. The resulting brand strategy was the fruit of many months of painstaking research and the collective skills and vision of minds from both sides of the Atlantic.
The marketing strategy to break into the US market centred around three key areas: affordability, freshness and convenience. It was considered key to accomplish a strong price advantage, to centralise supply chains operations and to make Fresh & Easy own brand 50% of the product on offer.
The Fresh & Easy name, intended to target the health-conscious shopper, was to be used not only for the corporate identity but also for in-house products and to reinforce Tesco's overall marketing message. In essence, the idea is simple, but highly innovative when put in context. Good healthy foods at discount prices in an attractive, easy to shop environment.
Simon Uwins of Fresh & Easy underlines the point: "Fresh & Easy is different than any other supermarket. We offer fresh, wholesome food at affordable prices with a range of authentic products and national brands, as well as our private label."
The hook of healthy food is perhaps surprising to us in the UK - we are inclined to pigeonhole the American consumer as a fast food junky. As in the UK there are plenty of them about, but also, as with the UK, there is a growing concern about obesity and a desire to follow a more healthy diet. If anything the average consumer in LA may be savvier about issues such as trans fats than their British counterpart. Making sure they get it right Tesco has a team of 10 food technicians in the US, helping suppliers develop products for it.
Tesco listened and developed a brand that gives shoppers what they asked for rather than attempting to impose a conventional European format. "Based on extensive research, we've built a store from the ground up for American customers," says Simon Uwins, "We've designed a modern grocery store for the modern American. We found customers were shopping lots of different stores to piece together their weekly shopping trip, so we put together a format to simplify customer's lives."
When Pemberton & Whitefoord first became involved with the brand, the concept was still in its infancy although the mock up store, designed by retail interiors specialists Schorleaf, was pretty well advanced (tucked away in that warehouse in Hawthorn).
What was needed at this point was a distinctive design language for the Fresh & Easy brand that summed up all that the new venture stood for. The resultant design solution was born of the collaboration between P&W and Deutsch. It is unique to Fresh & Easy and stands clearly apart from established American category norms.
What we achieved was a strong brand architecture mixed with the unexpected. For example, the design of the tortilla packaging is based on the brightly coloured hand painted signs and adverts seen on the walls outside of roadside restaurants and cafes. A member of our design team picked up the inspiration for this on his travels through Latin America.
Careful attention was paid to the colours used to make sure they were authentic. Blank walls in Mexico and Central America were photographed before having the graphics applied and the packaging was developed with the help of a Latin American designer for further authenticity.
Everyone involved in the project has made a contribution to what is already being hailed as the major retail story of the decade. We have just employed our first full time American citizen and we are hopeful that the relationship between Pemberton & Whitefoord and Fresh & Easy will go from strength to strength.