Private Brand Research Reveals Customers Do Not Care Who Owns Brands

Consumers prefer certain Private Brand products over others, and many have no idea they are purchasing Private Brands, according to a new study by research company Market Force Information. The panel research study, conducted in March with 6,100 participants, was designed to uncover which Private Brand products consumers buy and whether they know they are actually buying Private Brand.

Market Force’s customer satisfaction survey revealed a direct correlation between Private Brand awareness and adoption. Among the grocery categories, consumers were most aware of Private Brand dairy products and were more likely to buy them than Private Brand cereal and snacks, while cleaning supplies ranked low in awareness levels and purchases. Walmart’s Great Value emerged as the most familiar Private Brand across all categories.

Got Milk? Consumers Thirsty for It
It is no surprise that milk was the most popular and familiar of the Private Brand categories studied by Market Force. Of the 84% who know their store sells Private Brand milk, almost one-fifth said they buy it all of the time and 45% buy it some of the time. Interestingly, taste does not seem to play a significant role in consumers’ thirst for dairy, with only 7% citing it as a factor in their private-label milk purchases. Price was the overriding purchase factor with 81% mentioning it, followed by value with 53%, and coupons and promotions earned 16% to rank as the third most important consideration.

Walmart’s Great Value brand was the most familiar among Private Brand milk buyers, with 666 out of 4,808 respondents (14%) calling it out. In general, consumers were aware of a high number of Private Brand milk brands and could specifically name nine others in addition to Great Value.

“Walmart’s emphasis on its Great Value brand is paying off in both brand recognition and preference,” said Janet Eden-Harris, chief marketing officer for Market Force. “By pricing its private-label products 5-20% less than named-brand products and putting serious marketing muscle behind its brand, Great Value now accounts for 10% of the chain’s food sales.”

Private Brand Cereal Brand Awareness Low
While taste might not be a great concern with milk, it is a deal-breaker for many cereal buyers. More than 29% of survey participants said they never purchase Private Brand cereal, compared with only 4% for milk. Taste was the primary reason given for not purchasing the cereal. Out of the 71% who do purchase Private Brand cereal, their top reasons echo the milk category: price, value and promotions.

Private Brand recognition was also lower with cereal than it was with milk. When asked, consumers could only name nine specific private-label cereal brands and only three of those didn’t include the store’s name. This could point to an awareness issue, since only 6% of those surveyed knew for certain that their store sells private-label cereal, or it could be that consumers cannot discern the difference between private-label and national brands.

“We discovered that the distinction between private-label and named brands is fading for consumers and they may not even know that certain brands are private label,” said Eden-Harris. “This situation could pose some real challenges for the national brands who must maintain a distinct identity.”

With Snacks, Taste Matters
Shoppers aren’t quick to gobble up private-label snacks like chips and crackers either. Approximately one-fifth of survey respondents said they never purchase private-label snacks, citing taste as the predominant reason. Other reasons given for steering clear of private-label snacks were a preference for name-brand products, quality concerns and brand loyalty.

Meanwhile, price and value were the top two factors that drove others to purchase Private Brand snacks, which corroborates an IRI report showing 54% of consumers are buying snacks based on cost as opposed to brand. The Market Force study revealed fairly low Private Brand snack brand recognition, with consumers capable of specifying only four brands that do not include the store name: Great Value (Walmart), Kirkland (Costco), Clancy’s (Aldi) and Archer Farms (Target).

Cleaning Supplies Not Cleaning Up at Register
One of the biggest private-label industry pushes has been with eco-friendly cleaning supplies, but these efforts are not paying off in awareness or trust. More than one-third of respondents said they never buy Private Brand cleaning products, primarily because they do not trust a new brand or because the quality is inferior. However, this finding must be tempered by the fact that 40% – the highest percentage of any category – admitted not knowing if their store offers Private Brand cleaning supplies. Likewise, those surveyed could only name 10 specific Private Brand cleaning brands, and many offered generic answers such as “Kroger” or “Target” or “HEB.”

Of those who do purchase private-label cleaning products, price and value again ranked as the highest influencers, while the absence of additives and the fact that the product was organic mattered to very few.

Survey Demographics
The survey was conducted in March 2011 across the United States and Canada. The pool of 6,100 respondents reflected a broad spectrum of income levels, with approximately 70% reporting household incomes of more than $50,000 a year. Respondents’ ages ranged from 25 to 64 years old. Approximately three-quarters of respondents were women – the primary household consumer purchasers – and an equal percentage work full or part time. Half of the respondents have children at home and two-thirds are married.

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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.