The concept of store brand food is a recent innovation and has become increasingly popular at supermarkets as a competitor to brand-name products from companies such as Heinz, Coca-Cola or Nestle.
It is clear that store-brand food versus brand-name food has certainly gained a greater place in consumers’ consciousness. Indeed, some studies have even predicted that store-brand foods will represent 20% of sales in the next few years.
There are several reasons for this innovation, which include better margins, a more vertically integrated supply chain and more control over the customer experience and business operations. All of these are relevant factors to consider when comparing store-brand food versus brand-name food.
The history of store brands
Although some brand name companies argue that their products provide better quality than those of store brands, this myth has been widely debunked by companies such as Loblaws.
The company has been actively increasing the presence and credibility of store brand foods through their President’s Choice, which was widely touted as the first premium store brand, an innovation which was widely duplicated in the grocery industry. This is just one example of the prominence of store-brand food versus brand-name food.
A great advantage that President’s Choice and other store-brands had over their brand name competitors from the onset was that the cost of selling their product was always below their brand name counterparts, which created greater incentive to give them more shelf space, flyer space and advertising exposure .
Since the grocer has control over what he or she displays on the shelves, it became easier for store brands to gain prominence in the consumer’s mind.
The argument for brand names
Brand name companies argue that their products are better quality and also contend that the brand names are often the ones driving innovation within the industry, only to be copied by store brand imitations.
Unfortunately, it is very difficult to patent or trademark a food recipe so brand names are very susceptible to this type of competition, the ethical implications of which have been debated by many.
However, as store brands gained more exposure, customers began to appreciate that the quality in many cases was in fact comparable or better than the supposedly ‘more premium’ items created by the big multi-national conglomerates.
Nonetheless, brand loyalty has helped large companies like Pepsi maintain their staying power and continue their reach to millions of customers. Especially for products which are difficult to differentiate such as Pepsi, the power of the brand name is even more pronounced than normal.
It is clear that there are arguments to be made in favor of both store-brand food versus brand-name food. While there is debate as to whether the quality of food is superior to brand name providers, there is no doubt that their exposure will decrease as supermarket and grocery chains realize their store brand items are able to earn better profits for their stores.