The Rise of Private Labels & The Role of Strong Brand Names

rise of private label brand names

“Consumers are buying private label food and drink products in greater numbers, typically because these products represent better value” (Mintel, The Private Label Food and Drink Consumer, Dec. 2010). But, is this causation or correlation? Are consumers knowingly buying private labels in larger quantities because of their perceived value, or is something else driving the increase?

This same Mintel study identifies several private label names (e.g., Target’s Archer Farms and Dominick’s/Safeway’s Lucerne) where more consumers believe they are actually buying a national brand  than a private label.

While part of this perception is certainly due to clever packaging and well-crafted brand-building strategies, we believe that some of the credit clearly goes to the name. Take for instance two other names that are quickly identified as private labels among almost all consumers: Walmart’s Great Value and Supervalu’s Shop ’n Save. Are any of us really surprised at this? Is there any doubt that a name like Archer Farms just inherently has more national brand potential than a name like Great Value?

But what is also interesting is this takeaway from the Mintel study: “most consumers do not perceive a clear difference between the quality of branded products and those sold under a retailer’s private label” (Mintel, Dec. 2010). This same conclusion has been reported in the press and other studies, with seemingly increasing frequency in recent years. Some herald this as foreshadowing the inevitable demise of national brands. Yet others point to the premium prices, incredible customer loyalty and high margins that certain brands continue to command today (e.g. Apple, REI, Ferrari & Tiffany’s).

So what does all of this mean?  It may mean that national brands have not just an opportunity but an absolute obligation to better differentiate themselves from private label competition. The competition is becoming savvier with respect to brand-building and much better at developing private label names that rival the best national brand names out there.

We do both. We help retailers of all sizes develop strong private label names with the potential to usurp the incumbent national brand’s dominance.  We also help small to large manufacturers and service providers, in both the B2C and B2B arenas, create new brand names that engage, connect emotionally, differentiate and build strong loyalty and preference in a market.  Let us do the same for you.

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