Private Label Brands Continue to Profit from their Loyal Consumers
After attending the 2012 PLMA expo on November 12-13th (held at the Rosemont Convention Center in Chicago, IL,) it wasn’t surprising to see the overwhelming amount of exhibitors for the following industries: Food, Pharmaceutical, Personal Care, Animal Health/Petcare and Household...
So what does private label mean? Private label products are brands owned or sponsored by a retailer or supplier and made by a contract manufacturer and most private label products continue to be sold under retailer brands but are produced by firms further up the supply chain, according to The Private World of Private Label Food Brands.
The rising rate of private label brands has really made a spot for themselves on retail shelves worldwide. According to the article, Store Brands Step Up Their Game and Prices from the Wall Street Journal, “Every year, U.S. shoppers buy more generic goods, many of them trading down from more expensive, name-brand labels to save money. But consumers are developing loyalty to store brands for reasons besides price, and that could be a problem for food and consumer-products companies as the economy rebounds.”
This so-called loyal fan base has made such an impact on current markets that for the food industry alone “Private label food brands are a $90 billion business accounting for 17.4 percent of retail food sales in the U.S. and over the past six years, while most food categories have been struggling, private labels have grown at a rate of 6 percent per year,” from The Private World of Private Label Food Brands article.
A majority of the store brand items have jumped on the private label wagon by carrying the same name. For example, Costco's Kirkland, Whole Foods' 365 Everyday Value products, Dominick’s Safeway, and Walmart's Great Value and Marketside has created a loyal fan base that not only saves its consumers money but also maintains the quality and freshness of the product. These store brands have been able to position themselves as premium brands by “mimicking or bettering the national brands packaging” - shape, size, graphics and labels. And because of this copy-cat effect, many consumers today think that they are buying a national brand rather than the private label brand.
So the next time you find yourself deciding between a name brand or private label just ask yourself, what’s really in a name?
Tuesday, December 18, 2012 at 3:05PM 
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