In the 1970s, supermarkets featured less expensive generic brands in monochromatic packaging that had little appeal except for the price. Since then, a series of economic recessions has produced more frugal consumers, and house brands have vastly improved.
Today the turnaround is so complete that they’re often perceived by shoppers as better products than many national brands, according to a recent study. “I’m not loyal to a big brand,” says Ric Duarte of Malden, an accomplished home cook. “I go for price and taste. I’m pretty much a Stop & Shop-per and Whole Foods person. I trust their brands, I trust their food.”
Wherever you find a shopper, you’ll find they have strong opinions about store brands. But these shoppers are unlikely to know what they’re actually buying. Where house brands were once produced as side products of major companies such as Heinz or Del Monte Foods, these days they’re more likely to come from specialty manufacturers, who are not identified on the label. “It is almost impossible for consumers to determine which company makes a particular store brand product,” says Kathie Canning, editorial director of Deerfield, Ill.-based Store Brands magazine.
Also known as private labels, store brands go back to 1859, when A&P launched Eight O’Clock Coffee. Stop & Shop came out with its canned cocoa in 1920, Wegmans rolled out its brand in 1979, Whole Foods Market in 1997. Each retailer offers more than 3,000 store-brand products; most retailers have two- or three-tier brands of varying quality with different pricing. Some don’t even feature the retailer’s name and the consumer may be unaware the product is actually a store brand, such as Archer Farms, a premium food line at Target, or Happy Harvest, one of many private label products at the Germany-based chain, Aldi, with eight Massachusetts locations (Aldi Nord owns Trader Joe’s).
House brands are appealing because they cost less. “When I retired, I became more conscious of budgeting and getting better value,” says Bonnie Sashin of Brookline, who shops at Trader Joe’s and Wegmans.“I have confidence in some store brands that I’m not going to be embarrassed by the quality I serve.”
An “American Pantry Study” released in May by Deloitte Consulting LLP finds that “store brand quality is increasingly perceived to be the same or better” in many products. “What’s interesting is that three in 10 shoppers don’t feel they are sacrificing when buying a store brand. Store brands have done enough to improve their quality and brand perception,” says Rich Nanda, a Deloitte principal and coauthor of the study. He adds, “We haven’t seen any data that store brands are going to recede.”
They used to be moneymakers, says Canning, and yield “higher profit margins because retailers didn’t have to do marketing or advertising.” That’s changed. “Now it’s about competition, building customer loyalty by offering value, and differentiating themselves from other retailers.”
Rather than emulate national brands, grocery retailers are trying to attract customers with unique products. Sashin says Trader Joe’s is the only retailer where she can find lemon-pepper pappardelle. Duarte relies on Whole Foods for its 365 Everyday Value frozen artichoke hearts.
Wegmans works only with suppliers certified by the Global Food Safety Initiative. “We’re also going to check, to the best we can, that their values line up with our values,” says Mike DeCory, vice president of the Wegmans brand. “How do they treat their people? How do they treat their customers? Are they stewards to the environment?” He says the company constantly reevaluates and tweaks its products.
Stores are taking private labels seriously, and consumers are responding. The Deloitte study found that about 84 percent of the 4,024 shoppers surveyed view store brand condiments, bottled water, meal kits, and soup to be the same or better than national brand equivalents. Affinity for other store brand products such as cereals, desserts, and frozen food is also high at 61 percent.
Maybe that’s why most of the shelves at Trader Joe’s and Aldi are lined with their own labels.Peggy Hernandez can be reached at email@example.com.