New Hope 360 Blog

Brand names continue to lose their luster

Imagine a grocery store filled entirely with private label goods. It may not be as far off as you think.

I grew up in a Jiffy house. Skippy, or even worse Peter Pan peanut butter never graced our pantry. My family's cupboards were stocked with the brands we believed in—Tide, Doritos, Big Sky Cola etc.—and rarely did my mom deviate from what we liked. Today's households look at lot different though. We know that during the recession, to save money many consumers opted to ditch shiny big brands, instead buying what used to be referred to as "generic" or "no-name" labels. Because these foods tasted nearly identical to the products we were buying, studies show shoppers are sticking to private label choices.

There's also the millennial factor. Having endured the hardship of graduating from college only to find ourselves jobless and scraping by living in our parent's basements, our priorities have shifted. Though Millennials were raised in brand-loyal homes, we're much less likely than mom and dad to trust big names. We're skeptical. We have questions, but trust no one. We do our own research and read other customer reviews before making any big purchasing decisions. In the grocery store, price is king.

Big-box retailers, hungry to capture today's cost-conscious consumers have been quick to promote their private label brands for delivering quality at reasonable prices. Target's Archer Farms positions itself as "natural" and includes a bevy of healthier snack options, and Whole Foods' 365 Everyday Value offers many certified organic products with significantly lower prices. Most recently, Walgreens debuted Ology, a line of home products free of harmful chemicals which will likely appeal to the growing audience of natural curious shoppers.  

A new "Private Label" report from the Integer Group with commentary from a recent Time article offers more insights into our penchant for private label.

Women are especially likely to check out store brands. Most shoppers scope out both private-label and name-brand products before making purchases: 77% of all consumers report doing so. But women are far more likely to compare store and name brands—9 in 10 are look at both options before making selections.

Guys are cool with generic health-and-beauty products. Unsurprisingly, women care more than men when it comes to products that go on their skin and in their hair. While 74% of women report a preference for name-brand health-and-beauty merchandise, just 56% of men say they like name brands better.

Brands make a big difference with laundry detergent. Of the eight product categories covered in the study (including batteries, ice cream, milk, cereal, and cookies and snacks), consumers think brand names are most important when it comes to laundry detergent: 69% prefer name brands in the category.

But not so much with medicine and milk. Only 26% of consumers report a preference for name-brand over house-brand milk. As for aspirin, cough syrup and other over-the-counter medicines, 68% of shoppers say they actually prefer the generic store-brand versions—presumably because they know the ingredients are virtually identical to pricier name brands.

Race plays a role in name-brand preference. African Americans are more likely to report a preference for name-brand detergent (76%), cereal (72%), cookies (68%) and ice cream (62%), compared with whites (68%, 61%, 56% and 50%, respectively). More whites, on the other hand, go for name-brand batteries—65%, compared with 57% for African Americans.

If you don't offer private label, how are you capturing these shoppers in your store?

Discuss this Blog Entry 1

Peter Wennstrom (not verified)
on Nov 19, 2012

If you are a household brand you need to stay loyal to the household for better and for worse. Consumer solidarity is a very good way to keep the brand loyalty. And that means lowering your prices AND telling the consumers that you do it to help them keep the quality they like. Used by Danone on Russia in 2009 and now by Kellogg's in Spain.

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