The following is the second post in a three part series written by Eric Ashworth, Chief Strategic Officer of Anthem Worldwide for the package design website Popsop.
Manutailing: Part II – History of the Private Label
The History of Private Label
For over a century, consumer packaged goods manufacturers have dominated brand innovation, formulating products and driving consumer motivation for purchase, while retailers have served as the real estate managers governing where these new products are sold. Essentially, CPGs invented and retailers stocked the shelf. This approach became so integrated that through the concept of category champions, CPGs took control of retailers’ merchandising strategies – and in some cases drove store layout. But as this model evolved, the more progressive retailers began packing products under their own brands and the industry of “private label” was born.
Private label was initially successful due to the simple proposition of value alternative. For individuals shopping on a budget or for higher income shoppers in low involvement categories, private label provided an attractive price point. This concept flourished, as it not only provided incremental revenue for the retailer via better margins, but it also positioned the competing CPG offerings as more innovative and of higher quality, thereby substantiating the price premium at which they still operate today.
Eric Ashworth is Chief Strategy Officer for Anthem Worldwide where he leads large-scale branding initiatives for major retailers and CPG companies across the globe. Eric has held senior brand and marketing management positions at global branding agencies and consumer product companies. Eric has served as a guest lecturer on brand strategy at the Haas School of Business at the University of California, Berkeley.