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High value in private label brands.

Brands

June 3, 2015

A couple of months ago, I wrote about how brands influence and assist us in every aisle of the grocery store. The bright colors and iconic images of our favorite brands provide a mental shortcut in our decision-making process. If we’re going to talk about grocery store brands, though, we have to also talk about private label (formerly known as generic) brands. 

Years ago, private label brand packaging was no-frills, as this old Albertson’s ad details:

Albertsons Generic Ad - Tag Strategies Blog

The price-conscious consumer was assured of savings because they were paying only for the food in the packaging, without any of the costs associated with a big marketing budget. There wasn’t even room in the budget for adjectives, only the food.

Now consider the private label products we’re buying today. Private label foods, which are produced and sold under a store-owned label have experienced a resurgence in recent years.  In the past three years, sales of private label brands grew 8.8%, compared to only 0.7% growth for leading national brands (source: Harvard Business Review ).  No longer the ugly, dented can on the bottom shelf, private or store-brand items are getting prettier labels and better shelf positions. My grocery store even has a private label line of foods imported from Italy, including a chocolate-hazelnut spread that is SO delicious, and less expensive than the big brand.

Hazelnut Spread - Tag Strategies Blog

Interest in store brands increased in the years following the Great Recession of 2007, and the stores that invested in their private label brands have seen great returns on their investment.

At Tag we are also fans of Trader Joe’s and Target products, both of which deliver high quality products in well-designed packaging. Trader Joe’s brand story is the story of a strong private label brand.

From their website: “In ‘67, our founder, the original Trader Joe, changed our name (yes, to Trader Joe’s) and the way we do business…Most importantly, we started packaging innovative, hard-to-find, great-tasting foods under the “Trader Joe’s” name. That cut our costs and saved you money. Still does. And that’s important, because “value” is a concept we take very seriously.”

Target, like Trader Joe’s, understands that their shoppers are looking for a discount, but aren’t willing to sacrifice quality in pursuit of a lower price. They needed to build their Archer Farms brand, but not in the same way that a large, national brand would. They built brand love with innovative packaging, inventive flavors, and a lower price, rather than with national media buys. Stores like Shoprite, Target and Trader Joe’s take advantage of their unique ability to put their products in the most desirable shelf positions and see big returns.

I fill my cart with the Archer Farms Garlic Parmesan chips, in the resealable bag, every time I walk that chip aisle.

Archer Farms Chips - Tag Strategies Blog

What private label or store brand products are your favorite?

 

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