‘Baby’ steps for Walmart

The gigantic retailer has given birth to a new member of is 10-year-old Parent’s Choice Infant Formula – an exclusive brand manufactured by PBM Nutritionals in Georgia, Vermont and Covington, OH.
It was announced on March 23 that Perrigo is acquiring PBM for $808 million, adding the maker of Private Brand infant formula to its growing product portfolio. Perrigo, which makes Private Brand pharmaceutical and nutrition products, has benefited from consumers trading down during the recession.
The “new and improved” milk based Parent’s Choice “Premium” Infant Formula contains nucleotides, DHA, ARA and prebiotics, which “may” support baby’s immune system and help with brain and vision development. On its web site Walmart says moms can save as much as $600 a year by switching from one of the national brands to Parent’s Choice, and they use a cool looking online “Parent’s Choice $avings Calculator” to compare their brand with Enfamil, Prosobee, Similac and Isomil. In the U.S. all baby formulas are required to be manufactured in accordance with, and meet the nutritional requirements of, the Federal Food, Drug and Cosmetic Act for Infant Formula under the regulation of the U.S. Food and Drug Administration. The Infant Formula Act is a law, enforced by the FDA, which sets the nutritional standards and specifies procedures in manufacturing for commercial infant formulas to make sure their safety and high quality. That means for $600 less (according to Walmart) consumers can get a product just as good as the higher prices, higher image national brands. In this case: perception ain’t reality. Retailers should do a better job of educating consumers about the “sameness” of PB and NB in the relative categories.
Like Ibuprofen. A recent scan of a CVS pain relief aisle found an 80ct container of Advil Liqui-Gels for $10.99 immediate left of the same ct container of CVS Liquid Filled Ibuprofen for $7.99 (both 200mg – see photo). The only consumer call-out was the little shelf tag. If my brand were 30% cheaper than another brand – yet they were exactly the same ingredients – I’d have a mariachi band singing its praises in the aisle.

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Christopher Durham

President & Chief Strategist at My Private Brand/Folio28 LLC

Christopher Durham is the president and founding partner of the retail and Private Brand consultancy Folio28. He is a consultant, strategist and retailer with close to 20 years of real-world retail and corporate experience, creating, launching and building billion dollar Private Brands.

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