Consumers Increasingly Seek Store Brand Quality
by Thom Forbes, 25 minutes ago
Store brands are coming after brand marketers’ Boar’s Head meat and Idaho potatoes: the inferred promise of higher quality. Hannah Karp has a fact- and anecdote-rich piece about the accelerating trend in the Wall Street Journal this morning.
According to Symphony IRI data, private-label products still cost an average of 29% less than branded goods but prices jumped 5.3% last year compared with the industry average of 1.9%. Sometimes private label goods are the most expensive product in a category, Karp reports, as retailers position their labels as gourmet or specialty items.
“It’s much less about value and price than it used to be,” Clarkston Consulting analyst Steve Rosenstock confirms. He says 28% of respondents to a survey of major grocery and drugstore chain customers Clarkston conducted didn’t cite price as a factor in choosing store brands over name brands. Loyalty and positive experiences drove their purchasing decisions.
Generics’ market share of food and beverages is now 29%, according to the NPD Group. They traditionally have been at about 20%.
And the store brands aren’t just copycats anymore, either. Karp cites Diane Dietz, the VP of marketing at Safeway who brought nearly two decades of experience watching what consumers actually do while she was at Procter & Gamble. The store’s Snack Artist chips come with resealable bags as a result, and the ingredients for the Open Nature “100% natural food” brand are listed on the front of packages.
In a lead story for Supermarket News’ “Store Brands 2012” roundup last week, Carol Angrisani reports on how aggressive supermarkets are getting in promoting their store brands through social media and websites.
“I immediately ran to ShopRite after I read a recipe for ‘Almond Crusted Tilapia’” on the chain’s Potluck blog, Angrisani writes. “My reason: It was healthy, sounded delicious, and required just a few ingredients.” (And I just found a “Game Day Chili” with lean ground beef or ground turkey for Sunday, although it seems a little rich on the shredded cheese, judging by the picture.)
Angrisani also reports that the Private Label Manufacturers Association is launching StoreBrandsUSA.com next month, featuring “video cooking demonstrations showing how private-label ingredients from Safeway, Kroger, Stop & Shop, Giant Eagle and other food retailers can be combined to make creations like chocolate coffee mousse and a breakfast strata.” It will be the PLMA’s first consumer communications initiative.
Other stories in the Store Brands 2012 package are:
Consumer Web Connect
Head of the Class
Store Brands With a Cause
Shopping is not just about meeting the needs of the bipeds among us, of course. Pets are consumers, too. According to a new study by the Packaged Facts division of MarketResearch.com — “Pet Product Retail Channel and Consumer Shopping Trends in the U.S.” –- store brands are on the rise. That’s “further complicating strategies and options for traditional national brand marketers,” according to a story in Progressive Grocer’s Store Brands.
According to the Packaged Facts study, 49% of pet product buyers are buying more store brand food and beverage products for household use these days, and 45% of them agree that “store-brand pet products are often as good as national brand name products.”
Price, of course, still matters to consumers –- even more so than in more “normal” times.
Perrigo, which produces 45 billion generic pharmaceutical tablets a year that are sold in stores such as CVS Caremark and Walgreen, announced earlier this month that it was expanding its store brand business and offering new products, Bloomberg’s Tal Barak Harif reported.
“It’s still a very challenging economy,” according to CEO Joseph Papa. “Consumers have to cut back and they get between 25% to 30% in savings” with generic brands.
Click here for a recipe list for chicken pot pies from ShopRite’s private labels featured in the Supermarket News story. Alas, you’re on your own if you want to whip up dinner -– the actual recipe is not included in the story — but know that the total cost is about $15.52 for six people.
Those of you with long memories might argue that you’ve seen here’s-a-recipe-for-our-ingredients come-ons since forever. Ann Page would probably agree with you, wherever she has kicked up her high heels.