In fact, store brands traditionally haven’t been considered true competition, often ridiculed as a cheap and nasty substitute.
But what about reality?
The October edition of Consumer Reports puts store branded products head-to-head against the traditional brands in blind taste tests.
If concern about taste has kept you from trying store-brand foods, hesitate no more. In blind tests, our trained tasters compared a big national brand with a store brand in 29 food categories. Store and national brands tasted about equally good 19 times. Four times, the store brand won; six times, the national brand won.
What's more, the store-brand foods we tested cost an average of 27 percent less than big-name counterparts—about what you'd find across all product categories, industry experts told us. The biggest difference: 35 cents per ounce for Costco's vanilla vs. $3.34 for McCormick's. (Prices are the averages we found across the country.) Price gaps have less to do with what goes into the package than with the research, development, and marketing costs that help build a household name.
Clearly, the writing is on the wall, and it has been for quite some time – in big, black indelible ink.
Traditional branded manufacturers must take the rise of private label brands seriously.
Who is the true competitor? Another branded manufacturer who must also fight for shelf or warehouse space– or the powerful retailer (or distributor) who can slowly push the traditional manufacturer out by offering a product that matches or exceeds its offerings?
The real kicker? Many of the branded manufacturers are actually producing the retailer’s products.
More on that later.