National Brands, Private Brands and the Quality Imperative

This past week the New York Times ran a lengthy and detailed article on the troubles of the CPG giant Johnson & Johnson titled, “Can Johnson & Johnson Get Its Act Together?” The article examines the recent recalls and quality problems of the faltering manufacturer of Motrin, Rolaids, children’s Tylenol and adult Tylenol, Zyrtec, Mylanta and Pepcid AC just to name a few. Last year J& J recalled close to 288 million items including 136 million bottles of children’s liquid Tylenol. The story is a cautionary tale for national and Private Brands alike. The misstep opens a window of opportunity for Private Brands that combined with the economic downturn could spell disaster for once dominant brands.

While the drugstore signs that helpfully suggest “Try CVS/pharmacy brand” are intended to assist frustrated shoppers in identifying alternatives to missing brand-name products, they also serve as constant reminders of another of J.& J.’s continuing problems: It must persuade millions of disappointed customers to once again pay a premium for products that may no longer seem to be of any higher quality than the less expensive store brand.

“I don’t even consider buying them any more,” says Thien-Kim Lam, a mother of two and a blogger in Silver Spring, Md. In a post last spring titled “Makers of Tylenol, I’m Disappointed in You” on the blog DC Metro Moms, Ms. Lam wrote about the huge recall of J.& J. infants’ and children’s medicines.

Now, she says, the frequent recalls have prompted her to switch to generic cold and cough medicines for her children. “It’s like a breakup,” she says. “I’m done. I’ve moved on.”

Private Brand Managers take note although quality has increased significantly over the last five to ten years quality is critical to customer trust and ultimately brand loyalty. Retailers can and should gain share when this type of opportunity presents itself, however the gains can just as easily be lost if we cannot or do not maintain quality. Consistent Quality is Imperative.

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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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