NEW YORK — Once stigmatized as a second-rate alternative, store brands are taking on their name-brand counterparts with splashier packaging and a growing number of organic, all-natural and higher-end products.
The push is part of a broader expansion of store brands into every corner of the supermarket; shoppers can now find cheaper versions of Greek yogurt, organic frozen pizzas, gelato and even specialty chocolates.
At Target, shopper Charles Rawls said he didn’t even realize that Archer Farms was the big-box retailer’s in-house brand when he first started buying the snacks a few years ago. Rawls tried them only because he noticed they cost less.
“The packaging is very colorful and there are nice big pictures of the food,” said Rawls, a 34-year-old Philadelphia resident who works as a marketing manager for a bank. “There’s not a connotation of a lack of quality.”
The transformation of store brands – aka generics, house brands, and private-label brands – is being driven largely by economic conditions.
To start, supermarkets are being pressured by rising fuel and commodity prices, which have forced them to pay more to keep shelves stocked with name brand products. But grocery chains fear passing on those higher costs could send shoppers running.
So to keep expenses in check, they’re revamping the taste and packaging of their house brands to boost sales. The added benefit is that once shoppers get used to a particular product, they’re more likely to keep coming back and try other items in the line.
“It starts on price – that’s why people gravitate toward it,” said Steve Rosenstock, who heads the consumer products division for Clarkston Consulting in Durham, N.C. “But what we’ve seen is they develop loyalty to store brands that is commensurate with the loyalty they had with national brands.”
Consider that store brands now account for 28 percent of all food and drink consumed in the United States, up from 20 percent about a decade ago, according to market researcher The NPD Group.
Here’s what you need to know about store brands on your next trip to the grocery store.
Most supermarkets already offer at least two tiers of store brands; a basic line that competes squarely on price as well as a more premium line. But the options are expanding.
Kroger, for example, this past winter rolled out organic milk and eggs under the “Simple Truth” brand and plans to add to the line this year. At Safeway, shoppers can pick from Safeway Select, Eating Right, O Organics and Open Nature lines.