Losing the store brand stigma.

by Paul Michael on 11 January 2007 11 comments

5 cans of soda

When I was a young lad, I would cringe when my mother unpacked the groceries. We didn’t have much money and that meant scrimping and saving any way we could. So, out went the name brands and in came the store brands, or ‘generics’ as they are sometimes known. I can still remember the plain white cans with black army-surplus type covering the label. Baked Beans, carrots, tomato soup, dog food, you name it, we got it store brand. And I swear, as a child I knew they tasted awful. They really did.

Then I grew up. I went to college, struggled on little-to-no money and made do with store brands daily. They weren’t so bad. And now, I find them preferable to the big names like Heinz, General Mills, Proctor & Gamble and Campbells. Why? Well, quite simply, because they taste almost exactly the same (if not identical) and on average cost around 25-30% less than the big name brands. Sometimes, it’s almost 50%. Quite a margin for that can of soup or box of dish soap.

Now, the first reaction I get from people when I say this is usually this one…”there’s a reason they’re cheaper…they’re made from inferior ingredients or products.” Hmmm, really? I checked it out to confirm my suspicions, and I can sum up the major difference between store brands and name brands in one word – advertising.

When was the last time you saw a big budget ad campaign for Archer Farms, or Great Value? It never happens. It’s not that stores like Target and Wal-Mart are tight with their ad budgets. It’s simply because they don’t need to advertise store brands. The products sell themselves. If you need tomato soup, Campbells & Heinz have already spent the big bucks telling you all about the rich, creamy taste of their soups, and how wonderful they are on a cold winter’s day. So, what difference does it make if you get that same experience from a store brand?

Even more surprising is how well store brands fare in blind tests and Consumer Reports. Whether its zip-lock bags, foil or cooked ham, consumers are finding out that when it comes down to it, there’s very little difference except to your wallet. Even the labels and packaging of store brand products have evolved into something not just ‘ok’ but sometimes downright elegant (Target in particular, with Archer Farms & Market Pantry, do a great job).

Another question I often get asked when I champion store brands is “well who makes them then?” Some are made by companies that specialize in generic products for stores. But an awful lot are made by National Brand companies. That’s right, the same folks responsible for that aluminum foil you trust, or the canned tuna you put in your salads, is making the same product for the grocery store. They slap on a different label and you pay a lot less for what is basically the same product. Here are some companies you know well that also produce store brands:-

 

ARTICLE CONTINUES BELOW

Alcoa
KNOWN FOR: Reynolds Wrap aluminum foil
STORE BRAND PRODUCTS: Foil, wrap, plastic bags, disposable storage containers

Bausch & Lomb
KNOWN FOR: Contact lenses & eye medicines
STORE BRAND PRODUCTS: Eye-care products, nonprescription nasal remedies

Birds Eye
KNOWN FOR: Frozen veggies
STORE BRAND PRODUCTS: Frozen veg, canned soup, chili, pie filling

Chicken of the Sea
KNOWN FOR: Canned tuna (unless you’re Jessica Simpson)
STORE BRAND PRODUCTS: Canned tuna, salmon, specialty seafood, fruit and vegetables, pet food

Del Monte
KNOWN FOR: Canned fruit and veg
STORE BRAND PRODUCTS: Canned soup, broth, gravy

McCormick
KNOWN FOR: Spices, seasonings, extracts
STORE BRAND PRODUCTS: Spices, seasonings, extracts, salad dressings, dips

I could keep going, but you get the picture. You may wonder why so many major labels are producing store brands. If you think about it, they’re cannibalizing on their own sales. Trouble is, this is a case of play ball or lose out. Manufacturers everywhere know that store brands are growing and growing in popularity. If they don’t help supply them, they’re still going to lose sales to the generic products. Better to be involved for a lower profit margin than no profit at all.

But what does this all mean to you? Well, it’s only good news. Store brands taste and perform better than ever, often outperforming well-established national brands. Their impact is forcing major labels to reduce their pricing to remain competitive. And at the end of the day, you’re filling your house with groceries at a much lower cost, for no noticeable difference in quality. If you can get over the ‘shame’ of buying store brand, you’ll find yourself laughing all the way to the bank.

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Will Chen's picture

I was reading yesterday about how Vons (Safeway) water has a lot less impurities than some of the other more fancy national brands.

Great post as usual.

Guest's picture

You're right on with this one. It's amazing how many adults actually believe that brand name products are superior. The price difference is all advertizing!

Guest's picture
Jessie

back to costco again hahaha...  the kirkland brand batteries are duracell with a different label...  same quality same EVERYTHING.

 

that being said i would never buy store brand for things like ketchup. for some reason i just HATE all ketchup unless it is heinz...theres something different. if you know the store brand equivalent please let me know!

 

i tend to buy most of my groceries at places like whole foods anyways (hey i'm just buying for myself at this point and I dont eat a whole lot anyways...) because most of the stuff sold there is organic and tends to be less processed, have less fat, and have less calories.  its also a lot easier to resist temptations such as cheetos and other crap junk food if it isnt even there.  the healthier store affects my mindset and i dont even buy the junk food they do carry. 

Paul Michael's picture

I don't believe anyone can match the Heinz Ketchup formula, which is probably just as well as it unfortunately contains the most sugar of any ketchup on the shelves. This is why everyone loves it, including the kids.

Will Chen's picture

You know, I always dismissed the Kirkland brand because it just didn't sound "techie" enough. They need to rename those batteries as "neotech" or "ibats" or something.

As for Ketchup, I never run out because I always save the ones I get from fast food places. =)

Guest's picture
youdontownme

Generic laundry detergent -- sure, why not!  But nothing tastes like Coke except Coke.

Paul Michael's picture

I recently read Blink by Malcolm Gladwell. I can't go into detail here, it would take too long, but I think you'd be surprised in a blind taste test. It's amazing what the can and the decades of advertising can do to actually affect the way the brain perceives taste. Seriously.

Guest's picture
Brian

I always try to go store brand. It's not that I am poor, I am frugal. However, Weiss store brand has always been a disappointment. Except for their water -- $.67 per gallon!

Guest's picture
Johanna B

Back when I was teaching school we took the kids (3rd graders) to a facility that packages soft drinks. I watched as they simply changed the cans to a different "Brand" and kept filling them out of the same containers of product. That's when I stopped buying name brands.

Guest's picture
Guest

Why There's No Reason NOT to Buy Store Brand Baby Formula
Parent and Wise Bread blogger Paul Michael comments on the advantages of buying store-brand baby formulas compared to expensive national brand formulas that meet the same FDA infant formula guidelines.

The above Blog was posted on the website PBM Products. As we all should be aware of the short-comings of the FDA and its relation to the Infant Formula Act, shame on PBM for not providing definitive facts that their products are "same" as "private label" and/or "name brand" products. Don't be fooled by inventive target marketing...price should not be a factor when selecting the product that best meets the need of your infant.

Guest's picture
wonko

I would LOVE to see a huge collection of which name brands relabel and what they relabel too.

like the kirkland batteries = duracell

on a more regional note here on the west coast Foster Farms relabels their chicken to either sunny select or sunny side farms. I forget which one of those store brands is for meats (Those are the savemart brands). I got word of this from a guy who worked at Foster Farms.

so in short.

sunny side farms/sunny select chicken = Foster Farms chicken