Much has been written (or picked up) over the last week about the Amazon Manufacturer Accelerator Program. In the program Amazon partners with a manufacturer to create a line extension or exclusive label to sell on the site. Merisant, the maker of Equal even pushed out a press release touting the release of the label “Sugarly Sweet by Equal” which includes the following products:
- Sugarly Sweet Zero Calorie Sweetener made with the stevia leaf and Non-GMO Project verified; available in green packets and bulk granulated pouches
- Sugarly Sweet Zero Calorie Sweetener made with sucralose; available in yellow packets and bulk granulated pouches
- Sugarly Sweet Zero Calorie Sweetener made with aspartame or saccharin; available in blue or pink packets.
“Sugarly Sweet was developed in an unprecedented three months, from the initial idea to availability on Amazon,” says Brian Huff, North America President of Merisant in a press release. “The brand launch demonstrates Merisant’s larger, renewed commitment to a customer-first, agile business approach, as we breakdown internal barriers to create a culture of bold, empowered doers.”
Let me be really clear, this is not a private brand. A private brand by definition must be owned by a retailer. This is not a new or innovative strategy. “Sugarly Sweet” is a trademark owned by a manufacturer – Merisant (USPTO Serial Number 88055441) which re-labels existing products and sells them for a cheaper price. Although that gives Amazon an easy SKU – it’s simply a price play and the Merisant owned brand has no established consumer value.
This labeling technique has been a part of retail for decades. In grocery, this is often called a packer label or manufacturer label. Walmart mega private brand “Equate” was owned by Perrigo until the late 1980s/ early 1990s when it was transferred to the retailer. If you wander the aisles of any grocer you will discover dozens of labels you have never heard of, in all likelihood they were created for the retailer or are from the stable of names the manufacturer owns.
Retailers often work with manufacturers to create lesser quality/price brand extensions that play borrow the equity of the master brand. Baby and kids clothing brand Carter’s has created cheaper extensions of its brand at both Walmart and Target: “Child of Mine’ made by Carter’s” at Walmart and “Just one You, made by Carter’s” at Target.
Costco has a long history of partnering with manufacturer owned brands for new products in its Kirkland Signature private brand including Starbucks and Newman’s Own.
The Amazon Manufacturer Accelerator Program adds yet another strategy to Amazon’s quiver, but it is not a private brand strategy. Their private brand portfolio now includes more than 100 brands across dozens of categories each speaking to a different customer or accomplishing a different goal for Amazon. The robust portfolio includes industry-leading brands like Kindle and Fire, the traditional private label Amazon Basics and Mid-century modern furniture brand Rivet.
It is tempting to shoehorn Amazons private brand portfolio strategy into the one-note private label strategy of the last thirty years, but it’s also naïve and dangerous.
What is exciting, Private Brand has progressed so far the “National Brands” now are excited to claim private brand status.
To learn more about Amazon you won’t want to miss My Private Brand, President Christopher Durham when he presents The Extraordinary Rise of Private Brand at Amazon at this year’s Velocity: The My Private Brand Conference.