In this excerpt from a May 26, 2009, article in the Orlando Sentinel the newspaper takes a look at Private Brand growth, quoting the usual suspects. With some interesting details on Florida based grocers Publix and Winn-Dixie.
In tough economy, store brands are in demand
Store brands, once the ugly ducklings of the grocery-store world, have turned into swans. Demand for supermarket-label milk, snacks, paper towels and other generic products has ramped up because of budget-conscious consumers seeking the best deals in a tough economy.
The trend is evident at Publix’s Lakeland dairy-processing facility, where dozens of products carrying the grocer’s label travel on conveyor belts into crates and off to hundreds of stores.
The milk is trucked in by tankers, each carrying 5,600 gallons. Then, inside a maze of stainless steel, it gets pasteurized, mixed with flavoring and made into ice cream, yogurt and cottage cheese. And, of course, it’s also poured into plastic bottles.
Production at the plant, one of three dairy facilities operated by Publix, has jumped 11 percent over the past year. In all, Publix says its store brands generally sell for 10 percent to 30 percent less than national labels.
The trends could mean trouble for less-popular national brands.
“Those No. 3 and 4 name brands are going to be in trouble,” said Lisa Rider, vice president of retail marketing at Nielsen, during the company’s recent conference in Orlando. “Why does the retailer need to keep them?”
Publix spokeswoman Maria Brous said customer preference dictates what products go on the shelves, and “we haven’t changed all that much in selection.”
As it has emerged from bankruptcy and seeks to improve its image, Jacksonville-based Winn-Dixie has made big changes in its store brands, including redesigned packaging.
Winn-Dixie continues to offer Thrifty Maid, the least-expensive of its brands, and its Winn-Dixie label. Winn-Dixie also has added premium products under the gourmet Winn & Lovett brand, using the company’s former name from decades ago.
While some products, such as many of Publix’s dairy foods, are manufactured by the supermarkets themselves, others are produced for the supermarkets by other companies.
Brous said the products go through rigorous testing to make sure they’re of the same quality as national brands, which often produce the store brands anyway. For example, Publix paper towels are made by Georgia-Pacific, which manufactures Brawny, Sparkle and Mardi Gras brands. Its long-grain rice is made by Mahatma.
“We are very proud of the standards that we set,” Brous said.
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