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The Honolulu Advertiser
Posted on: Friday, June 8, 2007

Rewards of buying store brands outweigh risks

Gannett News Service

Who makes the store brands you see at your local supermarket? Neither retailers nor big-brand manufacturers are anxious to reveal that information, and you won't find any clues on product labels.

Of the thousands of manufacturers of store brands, many are national-brand companies. That doesn't mean that national brands simply slap a different label on products that are rolling off the same assembly line: They sometimes manufacture a different type of product to be sold as a store brand, and even if it's the same type, they make it to the store's own specifications, which could mean a change in ingredients or quality.

What's more, suppliers can change any time: The company that made your store's chocolate-chip cookies last week might have been replaced by another this week.

Still, trying store brands carries little risk - most offer a money-back refund if you're dissatisfied - and the rewards can be considerable.

Peter Berlinski, editor of Private Label magazine, estimates that consumers can generally expect 15 percent to 20 percent average savings across all categories on store brands vs. national brands sold at supermarkets; 25 percent to 30 percent at drugstores; and as much as 50 percent at mass-merchandise stores.

If you're thinking about buying more store brands, here's the info you need to make savvy choices:

  • Know the role of the manufacturer. The fact that a national brand also makes store brands doesn't mean the products are identical. Actually, big-brand companies don't often cannibalize their own sales by making store-brand versions of their signature products. For example, Del Monte makes soup, but not fruit, for many retailers.

  • For every rule, however, there's an exception. McCormick, the nation's largest supplier of spices, seasonings and extracts, is a major player in store brands of those products. Even so, the spices it packages for itself may not be the same as those it makes for others, says Laurie Harrsen, McCormick's public-relations director.

    As with wine, coffee, and other products of nature, she points out, spice quality can vary with soil, climate and region. Quality also depends on the retailer's specifications. If a store brand wants to emphasize value, it might opt for lower-grade ingredients or accept more broken leaves.

  • Be aware of differences within the same national brand. A national-brand manufacturer might make several formulations of the same product to appeal to consumers with different needs - and snatch valuable shelf space from competitors. Be aware of differences within the same store brand, too. Most store brands come in several tiers, to dispel the notion that store brands are strictly for penny pinchers.

  • Consider whether you want to be on the cutting edge. Industry insiders agree that branded goods are more likely to be in the forefront of product technology because they're backed by bigger budgets for research and development. Brand-name diapers, for instance, might be the first to incorporate some innovation in absorption; or brand-name packaging might be first with a new convenience. That said, national-brand manufacturers are increasingly likely to license innovative technology soon after incorporating it into their own brands, thus allowing its use in store brands.

    Source: Consumer Reports, August 2005