Many stores have their own brands of national-brand products. My kids ate store-brand cereal this morning - which looks & tastes just like Capt’n Crunch. I took my Walgreen’s brand fiber this morning which looks & tastes just like Citrucel.
I always assumed these were national brand products with store brand labels. However, my fiber drink specifically says, now, that it’s not manufactured or distributed by Citrucel on its label. I’ve got another store-brand product here with the same disclaimer.
So - who’s knocking off all these national products? Is there a quiet industry of store-brand makers?
I’ll lay you odds Citrucel isn’t manufactured by Citrucel. They out-source the production to a plant, which makes the same things for every label, following the particular formula of any given brand. Watch the Food Channel sometime…they have shows on this regularly, usually Unwrapped and the like.
What silenus says. If you take a look at cans especially, you can tell some of them were at least in the same factory as each other. I went looking one day, and I recall Safeway and a name-brand canned pineapples each had exact same raised serial stamp on the bottom. Also a namebrand condensed milk and the store variety had the exact can size and printed font for the expiry date.
There are company’s that specialize in store brands, but some “name” brands also produce store brand versions of there own products. In Canada, people may not know Sunfresh Foods or Cott Beverages, but they’ve almost certainly had No Name and President’s Choice products made by them. IIRC, one of the big multi-nationals that produces canned vegetables under their own name also does some of the major store brand products.
I remember seeing a name-brand package (possibly a box of Kellogg’s cereal) than had a note indicating that they do not manufacture any store-brand products, so that you couldn’t expect to buy the cheap stuff and get the same product as the name brand.
In fact, there is quite an industry dedicated to producing “private label” products. Sometimes it’s the regular brand manufacturers using excess capactiy, sometimes it’s a company that uses similar manufacturing but doesn’t sell competitive products. Quaker, for example, used to (they may still, for all I know) had a thriving business manufacturing store-brand cereals that weren’t oats.
This can get really confusing. When Ralston-Purina spun off its cereal division into a new company, the new company was specifically forbidden from manufacturing no-name Wheat Chex.
This is a question I’ve wondered about. I’ve recently shopped at local Aldi stores, their home office is Batavia, Illinois, but if you go to their website,it’s a German company.
This store is muy low budget; All their products are their own brands, and laid out on pallettes. No bagging even, you load up into odd leftover boxes. It is incredibly cheap, though, and the quality is as good as the multiplicity of competitors.
I’ve wondered how they do this. Well, it’s by having their own brand, and that’s it. They don’t have all the rigamarole of dealing with other suppliers. But, their product, say, salsa, looks the the same as Pace salsa, and tastes the same.
So, yeah, how does this really work? I keep an eye out to manufacturing process, but have never heard it flat plain laid out. Do tell.
I used to work in a supermarket chain headqauters in mechandising, sourcing, and procurement. What some others have said are basically correct.
There is a whole industry centered around private label products and they follow every model you can think of. One of our big semi-private labels was called “President’s Choice” out of Canada and their business model was to source products of good quality all over the place, consolidate them into one brand, and then sell that brand to one chain in each market area. We had hundreds of President’s Choice products sitting right next to their name counterparts.
Then, there is actual private label. For any given product, there are many companies that are happy to sell you private label cornflakes or Windex type cleaner. The merchandising personnel at the headquarters will tell several companies to put out bids on a private label product. The companies may formulate something especially for a large potential customer or they just have stock products that they make and sell and relabel all over the country. The retailer picks between the private label makers based on quality, price, and other things like reliability of the manufacturer. It is a real problem when some fly-by-night factory stops shipping the cereal with your name on it in all the stores.
Private labeling isn’t really an alternate business model. Not every company wants to spend the ad dollars to have name recognition like Windex or Clorox. If you want to compete with an established brand, private labelling is pretty attractive all around.
I used to work for a company that made nutritional supplements and herbal crap. They packaged some of their stuff into up to a half-dozen different labels. It was the exact same material, coming off the same line, labelled with several different labels, including store brands for three or four large national chains.
I can only speak for the original German Aldi, our leading discounter.
They control their own brands, but many products are manufactured by “brand-name” companies and although they will never admit it, they know very well that the customers know. Their products regularly get excellent reviews, you don’t have to give up quality when you shop there. At least in Germany they have enormous market power and are able to negotiate excellent conditions from their suppliers. They treat their employees well and they treat their clients well, but they reduce their stores to a minimum. The products are placed on the shelves in their shipping boxes. No muzak, no decoration, no rebates, no coupons, no checks, and of course no baggers (in Germany we don’t have those anyway.) If at all possible, they own their stores, never pay rent.
So far they fought of the attempted Walmart invasion, Aldi’s prices are noticely better (although some cultural insensitivities from Walmart certainly helped)
Kellogg’s did (or does?) manufacture cereals for Aldi.
I work as a Nightfill Guy, and some of the “Generic Brand” stuff comes in boxes with the manufacturer’s name on it.
I’d probably be inadvertently breaching various marketing agreements and so on if I said who made what, so in the interests of caution and prudency I won’t name any specifics, but you don’t have to be a genius to work out there’s only two major Sugar Refineries/Companies in Australia so there’s a pretty high chance that the “Generic Brand” Sugar that says “Made In Australia” is from one of the two of them.
Similarly, the “Generic” Fruit Juices and Bottled Water are from respected companies (there not being that many bottling plants in Australia), and in my own experience at least 95% of the “Generic Brand” or “Store Brand” stuff is equally as good as the “Name Brand” stuff. There’s always exceptions of course, especially depending on personal preference, and, of course, marketing.
In short, I’d estimate at least 50-60% of the “Generic Brand” stuff at our store is made by well-known companies, 35-45% of the stuff is made by companies that specialise in making “Generic Brand” stuff, and as for the remaining 5-10%- well, you can’t win all the time.
I can’t speak for the veracity, but I have read that the store brand vegetables were blemished. So the name brand would sell them as store brands. The vegetables were still good, just not as pretty.
Remember, just because the storebrand ketchup might come out of the Heinz factory (I’m pretty sure Heinz produces stuff for storebrand purposes, anyways) doesn’t necessarily mean that it’s actually the same was the ketchup in a Heinz bottle. It might be, but it could be some cheaper-to-manufacture formula, too.
That isn’t necessarily right or wrong. It depends on the private label brand and the specific product. There are premium store brands believe it or not that strive to high quality standards using a different model than costly direct-to-consumer image marketing. They can spend just as much money on the product but save on advertising and use that savings in other ways. Others are designed to be of lesser quality to serve cheaper customers. There is going to be some product flaws coming down the line so it is better to sell it somewhere (and not to premium paying customers). That is what they do.
Private labeling is a much more complicated business than the premium label brands. They come in all different types from same as the premium brand to different but higher quality than the premium brand to crap for the cheapskates.
The fact that some come from the same factories doesn’t mean all that much either. Factories can make just about any type of bulk order. I also worked in the shoe manufacturing business for a while. There are huge factories in the 3rd world that make shoes - for everyone. They take orders from Nikes to Payless generic brands. Design a show of any quality you want and they will make you 100,000 pairs in a month. That doesn’t mean all shoes are of the same quality however.
Kroger Corp. actually has THREE DIFFERENT store brands with different marketing plans.
They have one brand that’s slightly cheaper than the name brand, and mostly as good or better than name brand.
They have another brand that’s very competitively priced and quite good.
They have yet another brand that’s frequently the cheapest one in the store, and still of passable quality.
It’s actually quite easy to produce an off-brand superior to a name brand. Without the advertising overhead, you can spend lots more on the product itself and still undercut the big brand with ease.
Oh yeah, and if you wanted to talk about motor oils, the Wal-Mart store brand Supertech has been made by a number of different vendors including ExxonMobil, Warren and Quaker State.
It looks like Supertech ISN’T the same as the big boy’s branded products, (seemingly different chemistries every time someone analyzes it), but it does perform quite well.
I do know that Exxon Superflo and Mobil Drive Clean 5000 have been the same product from time to time, despite a 20-30% price premium for the Drive Clean 5000 product…
I was a gorcery manager in a big chain after I graduated a little over a decade ago. I remember the Nabisco rep throwing a fit because Wal-Mart was threatening them to dump their products if they did not make a Wal-Mart brand of Oreo. I was surprised that Wal-Mart had the cloutt o bully such a brand back then. Things have changed much in a decade. I did buy my Nilla Wafers from Wal-Mart last week, but I don’t know if Wal-Mart has the store brand Double Stuffed on the shelves since I never buy them.
Makes good sense, thanks for the background. On a local National Public Radio show here recently in the US, Aldi was illustrated as one of the few competitors WalMart had their alert bells on. So, they gotta be doing something right…
