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What's The Real Deal Behind Generic Products?

What's The Real Deal Behind Generic Products?

And what's the difference between generic and private label?

July 24th, 2012 by Daryl Nelson of ConsumerAffairs in News

Sunkist or orange soda? Green Giant or simply sweet corn?

When it comes to choosing between brand name and private label items, many consumers aren't sure of the true difference.

In an effort to remove some of the mystery surrounding private label items, ConsumerAffairs contacted food distribution company Private Label Sourcing Inc. based in Franklin, Tenn.

Bert Edwards, who is president of the company and has been in the private label industry for nearly 30 years, explained where private label products actually come from and how they compare to national brands.

"The majority of products come from manufacturers specializing in producing private label products," he said. "While there are some national brand companies that also produce private label products, that number is relatively small. This is significant because branded manufacturers often will not produce a true match to their own brand, while private label manufacturers work hard to match national brand quality where applicable."

Oftentimes, consumer choices will default to brand name products because of familiarity, without knowing the true difference -- if any -- in quality between brand labels and private.

"In terms of product quality, this is generally driven by the retailer these days," says Edwards. "Most larger retailers will work with their manufacturers to create the quality they (the retailer) want to offer under their own brand. Sometimes this is a direct match to the national brand; while other times a retailer may want a product they perceive to be better than the brands."

Private vs. generic

But wait a minute. When did we start referring to generic brands as private label brands? What happened?

"Generic was applicable as recently as the 1980's," Edwards explained. "When there really were not many product specifications in place and the quality more times than not was whatever a supplier could make at the lowest possible cost."

Also, "beginning in the 80's and early 90's most retailers began getting serious about the quality of their private label products. That has continually improved over the last couple of decades, with most retailers being very specific in the products they offer."

In other words, generic brands were by and large a lower-cost option. This seemed to turn many consumers off. 

"The private label industry is much different than when I started," said Edwards. "The main change has been in product quality. For years many retailers simply offered 'generic' products - they often looked for the lowest price, and quality did not really factor in. You might get a great product one time and something terrible the next."

Not just beans

Things started to change when retailers began putting their brand name on what had previously been generic products. Instead of "beans," a product became LivingFree Beans, or whatever.

Packaging also began to improve, in an effort to give a more upscale look to what would otherwise just be a can of corn. 

"Packaging became more upscale so consumers would not feel as though they were buying an inferior product. And marketing picked up as well. Finally, a sense of ownership and pride in the brand began to permeate throughout many retailers," said Edwards.

But are there certain brand names consumers shouldn't deviate from?

Edwards says it really depends on the retailer, as quality consistency may differ from store to store. If one finds a specific location that carries at least one private label brand you like, the chances are high that same retailer will have many good private label items.

However, Edwards says there's a good chance that all the private label products may not be to your liking at one store, and there shouldn't be a difference in the way you choose non-brand name items from the way you choose brand named ones.

"Just as you may like many products offered by Kraft (or any national brand company), my guess is there are some items they offer that you do not buy. It is the same with private label," said Edwards. Makes sense, right?

He also says when choosing a private label item, customers should  try to eliminate their prejudices and give the non-branded item a fair shake. Also, just because you may have been dissatisfied with one private label product, doesn't mean other retailers will carry the same level of poor quality. 

Consumers should be careful not to judge the entire private label industry just because one store owner chose low prices over everything else.

Shop around

Consumers should also remember to use the same shopping logic when looking for private labels as when looking for national brands. "Find the private label items you like and buy those. If you switch just 25 percent of your purchases to private label, your savings will be measurable," said Edwards.

In addition, shoppers should use the overall appearance and level of quality in other store areas to give a better indication on the quality of its private label items.

Meaning, if the produce looks wilted, or the bakery section has a poor selection of breads, cakes, and pies, there's a good indication all of the products in that store could be suffering from the same inadequacies.

"The bottom line is, with the quality of private label products available at many retailers, you should be buying private label products because it saves you money on products you like, not because you are settling on those products to save money," Edwards concluded.