A new age of retail owned BRANDS

This article comes from the oldest continuously published newspaper in Australia The Sydney Morning Herald and addresses the age-old dilemma of mimicry by private labels. In Australia they call them home brands but the idea is the same classic late 1980’s early 90’s private label – pick a national brand and leverage its equity with remarkably similar private label packaging and product – this is not so much branding as copying.  The strategy continues to be executed in many American grocers most notably Supervalu and Aldi.

It is my hope that as we emerge from the recent economic unpleasantness a new age of retail owned BRANDS will emerge. Brands will be created that are more than price points and mimicry they will claim their  place in the hearts of our customers; brands, which cross multiple categories and present unique solutions to problems in ways that no manufacturer could hope.

Home brands’ trick of the eye

In a quest to boost the sales of their private label products, retailers are coming ”dangerously close” to misleading consumers by mimicking the packaging of established brands, say experts.

Woolworths Select Great Start cereal features the same sunny orange and yellow color scheme as Kellogg’s Just Right. Coles Spaghetti comes in a green packet similar to that of Vetta’s spaghetti, and Woolworths’ generic scented garbage bags are packaged in the same shape, size, scent and color of those by Multix.

”In the old days, the home brands were in plain packaging. The problem is when the packet starts to look like a specific branded product,” said consumer and competition law expert Frank Zumbo, an associate professor at the University of NSW.

The fight over Australia’s $80 billion supermarket spending has always been cutthroat. But the consumer group Choice said the recent growth of supermarket brands had been phenomenal. A decade ago, home brands made up 10 per cent of grocery sales. Late last year it was almost 25 per cent.

But there are concerns that the expansion of private labels is hurting Australian companies, crowding their products off supermarket shelves, forcing prices below sustainable levels and stifling manufacturers’ ability to compete.

Professor Zumbo said he believed some packaging – especially in cereals and biscuits – could come ”dangerously close” to breaching section 18 of the Australian Consumer Law, which prohibits misleading or deceptive conduct, including conduct ”likely to mislead a consumer into error”.

”If the supermarkets create an impression that this product is really a branded product of a supplier, it could come close,” he said.

Australian Food and Grocery Council chief executive Kate Carnell agreed the retailers aimed to make their products closely resemble their branded rivals, ”without ending up in court”.

The Australian Competition and Consumer Commission said it received ”occasional” complaints from people who believed packaging had misled them into buying the wrong product, but it had not taken recent action in such cases.

Coles and Woolworths denied that they set out to copy branded products with their packaging, both pointing to the fact that their private label brands – Woolworths Select and Coles – carried similar designs across different products.

”If our packaging was close to another brand’s, I’m sure the brand owner would, in a heartbeat, sue us,” Coles head of merchandising John Durkan said.

Coles and Woolworths said their own brands offered choice and value.

”[Private label products] have to earn their place just like branded products earn their place,” Woolworths spokesman Benedict Brook said.

Source: The Sydney Morning Herald

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.