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Store Brands Vs Name Brands?

Store Brands Vs Name Brands?

Gone are the days of black and white generic store brand offerings and the accompanying consumer perception of poor quality. More retailers are competing with nationally recognized brands both in appearance, and more importantly, substance. So what are store brand products doing to compete in the retail space?

Many times the manufactures who make name brand products are the same ones producing the store brands which sit right next to them on the shelves. This is why so many retailers keep sensitive information under wraps about who exactly is making their product lines. Some stores like Whole Foods differentiates its "365 Everyday Value" line by modifying ingredients to target nutritional information by lowering fat or salt.

Some products like saltines and black beans have very few ingredients to modify. In these situations, the only thing to change is product packaging. ConAgra CEO Gary Rodkin says the company shifts "differentiation as far downstream as possible." Sometimes the only difference between a store brand and name brand bag of chips may be seasoning and packaging.

Whether a retailer manufacture's its own product line, as in the case of Kroger which operates 37 plants that make about 40 percent of its store brands, or delegates that task to an outside producer the landscape is changing. Retailers have adapted quickly to consumer expectations and have made promoting quality store brand offerings a top priority to stay competitive.

Given the fact that store brands still only make up about 20 percent of packaged foods in the U.S. there is still plenty of room to grow. Other countries came to this realization years ago with store brands accounting for 36 percent in the United Kingdom and 44 percent in the Netherlands. In the end, consumers benefit from the increased competition resulting in more choices, better quality and lower prices.

Image by: Adam Lederer