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Grocery Store Brands Have Come a Long Way

Posted on: Sunday, 3 February 2008, 06:00 CST

Which can would you buy? Store brands have come a long way from old white-label days.

Winthrop University student Sarah Standeffer looks for a bargain wherever she can. At the supermarket, that means scouting for store brands that can trim her grocery bill by as much as 25 percent.

Shopping with her roommate at the Rock Hill Super Bi-Lo, she dropped Bi-Lo's Southern Home tuna salad, seafood salad, deviled eggs and drinking water into her cart.

"We're always looking for food that's healthier than the burgers they serve in the dorm," Standeffer, a 21-year-old psychology major, said last week. "A lot of times, we'll come get a (Southern Home) rotisserie chicken, and those are very good."

Supermarkets have offered store brand foods for years. Recently they've ramped up their selection of the items because of increased competition with the likes of Wal-Mart. The so-called "private label" brands have grown beyond basic staples such as eggs and milk to such foods as gourmet salsa and organic salad dressing.

Experts say the exclusive store brands could become even more popular among consumers this year as higher food prices and a sluggish economy have shoppers looking for ways to trim grocery bills.

Over the past five years, store brands have consistently made up about 16 percent of supermarket sales, according to the Private Label Manufacturers Association, a trade group for companies that make store brand products.

Last year, 41 percent of shoppers polled said they frequently buy store brands, up from 36 percent five years ago, according to the association. The growing confidence in private label products comes at a time when consumer grocery store visits are declining overall.

Traditional grocery stores see private label products, which sit alongside national brands, as a way to attract customers as big-box players such as Wal-Mart and Target have expanded grocery departments with lower prices.

Store brands used to be known as "generic" foods, packaged in plain black and white bags and boxes. They were popular in the 1950s when steep food prices had consumers looking for cheaper options, said Bill Greer, spokesman for the Food Marketing Institute, an industry trade group.

In recent years, stores have improved quality by hiring manufacturing companies or national brand companies such as Heinz, to make products for them. Some, including as Kroger and Safeway, run their own manufacturing plants.

Retailers keep the source of their store brands secret, however. Even the private label trade group doesn't keep track, said Dane Twining, spokesman for the Private Label Manufacturers Association.

"It's a pretty common question -- people want to know, for example, if the store-brand ketchup is made by Heinz," Twining said. "It's difficult to follow because some stores have multiple manufacturers and they change often."

Rock Hill Food Lion shopper Alex Guthrie, 44, said he's noticed an improvement in the quality of store brand items -- especially processed food -- over the years. Typically, however, he sticks to basic store brand staples like sugar and flour.

"I do buy more than I used to, because you can save money," said Guthrie, a sales clerk. "But sometimes the stuff is nasty -- it just doesn't taste right."

Loading her car at the Morrocroft Harris Teeter last week, Sherri Carnes said she regularly buys store brands. That day, her bags were filled with Harris Teeter brand milk, bread and chicken.

"They're a lot cheaper and a lot of times you can't tell the difference with the taste," said the Charlotte mother of three.

Matthews-based Harris Teeter has had store brands since the 1950s, but last year, the chain expanded its private label offerings with the "At Home" brand of laundry and baby products.

"We see it as a great opportunity for our shoppers to have an alternative to conventional items and save money," spokeswoman Jennifer Panetta said.

Private-label products can reduce a retailer's expenses because they're often cheaper for stores to buy or manufacture than national brands, said Mike Mannion, director of sales planning and corporate brands for Mauldin, S.C.-based Bi-Lo supermarkets. National brands cost more because they must cover research and advertising costs, he said.

"But (a store brand) still only benefits you if customers acknowledge and accept the brand," Mannion said. "A poor private label can chase a customer away as much as a strong label can build loyalty."

Harris Teeter and Food Lion officials declined to say whether they make more money on private-label products. Because stores have different ways of supplying the items, the products vary in profit margin, industry experts said.

Not all consumers are keen to load their shopping carts with store brands, however.

Theresa Ortiz, 51, said she consistently buys national brands, even though she knows store brands are cheaper.

"It's just how I was raised," the Charlotte laundry worker said at Bi-Lo last week. "I guess I just think the regular brands come with a certain quality."

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Most popular store-brand products

The following is a list of the most popular store-brand items nationally, based on percentage of all private label sales.

Fresh eggs 70%

Milk 59%

Unprepared frozen

meats and seafood 41%

Frozen vegetables 34%

Cheese 32%

Bread and baked goods 26%

Paper products 25%

Deli dressings, salads

and prepared foods 24%

Fresh produce 15%

Packaged meat 13%

-- Source: Private Label Manufacturers Association

Source: The Charlotte Observer (Charlotte, N.C.)

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