The Myth of Choice! National Brands & The MegaConglomerates Who Own Them

Christopher Durham Jun 1, 2014 2

Choice

Standing in Americas grocers large and small manufacturer brands like Coke, Tide and Campbells are ubiquitous. They have claimed the high ground as National Brands – supposedly better and morally superior to those “compare and safe” mimicking private labels. They have convinced many consumers and the mainstream media that their marketing spin and spend give them the right to be real “BRANDS.” While all other pretenders large and small are somehow less.

But a closer look at who they are and what they do reveals a story of multinational conglomerates who own the majority of the real “BRANDS.” A 2013 study by the U.S. consumer rights group, Food and Water Watch, examined the market share of 100 common grocery items and unearthed a disturbing truth: American consumers who buy national brands, no matter what the name on the pack, are actually supporting 2-4 mega-conglomerates.

For instance, I Can’t Believe It’s Not Butter!, Shedd’s Country Crock, Imperial, Promise and Brummel & Brown seem to be competing margarine brands, but they’re all owned by Unilever. Similarly, ConAgra Foods owns Blue Bonnet, Parkay and Fleishmann’s. Between the two giants alone you have eight supposed margarine national brand choices. As many as33 more categories are dominated by 2-4 big players.Clearly, that’s not much of a choice.

Despite the popular mythology of “national brand” there is nothing that makes these mega-conglomerates superior to any retailer or their portfolio of private brands.

  • Retailers and their brands must place customers at the center of all decisions.
  • Retailers and their brands must provide the relevant choices that consumers need.
  • Retailers must leverage their weekly interaction with customers to forge unbreakable relationships.
  • Retailers must stop apologizing for owning brands and start leveraging them to fill their customers unique needs in specific ways that nameless faceless mega-conglomerates simply cannot.
  • Retailers must own a robust portfolio of brands that address unique business needs and consumer needs.

Below is a fascinating infographic from Alex Hillsberg that reveals the ownership of manufacturer brands.

Top Grocery Brands Comparison: Pepsi, Coca Cola and Dr Pepper Dominate Over 90% of the Market

Prepared by business comparisons | Alex Hillsberg | Follow our Pinterest

 

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Christopher Durham

Vice President of Retail Brands at Theory House

Christopher Durham is the founder of My Private Brand and the VP of retail brands at Theory House, the branding and retail marketing agency. 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.

2 Comments »

  1. Howard Barrett Jun 2, 2014 at 9:42 am - Reply

    Congrats-Great article !!
    Yes- as objective as I can be,there is too much power. I’ve been part of and studied hundreds of new product lauches and extensions-from supplier brand to retailer brand, both large and small.
    The concentration you refer to is great for the multinationals and their relative cost of doing business with retail chains, but, in my experience-often stifles and/or blocks smaller suppliers from new + exciting products. They cannot compete at the same level in both consumer and trade marketing support. As well- a glimpse of several of the North American new product contests over the years shows a domination of “new” awards going to multinationals-whom clearly have pricing,distribution channel,marketing and sales strength over the smaller companies/marketers.
    Your article and the incredible infographic that illustrates the point are very relevent.
    Hopefully, the playing field will level out a bit-for the sake of the Consumer.

  2. Scott Francis Jun 6, 2014 at 1:37 pm - Reply

    With the strong consolidation in power among the top CPG brands there has been even more among the top retailers with the top five grocery retailers now being responsible for the majority of all commodity volume being sold. – Does it take a Goliath to do business with a Goliath?

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