Refrigerated & Frozen Foods Retailer

Well, I’ll probably get some hate mail from a few branded folk for writing about private label this month, as if doing so were the moral equivalent of tweeting nuclear secrets to the Taliban. (Do Taliban tweet? Do frogs blog? Gawd, how I miss the old days.) But private label isn’t going away, and it’s certainly top-of-mind among our retailer readers, who are seeing their store brands growing faster than China.

Mercifully, people finally realize it’s no longer relevant to discuss the days of “generic black and white” private label anymore, or how A&P blew it by doing too much private label 87 years ago. Ancient history. Shut up already.

Things have changed so quickly that it’s hard keeping up with “best practices,” let alone “mediocre practices.” Key opinion leaders are weighing in with surprises.

 

Don’t believe me? Then take this handy dandy quiz. Who said:

“Manufacturers who view the rise of private label as only a threat will soon find themselves at odds with their retailer partners.”

A. Osama Bin Laden
B. The Private Label Manufacturers Association
C. Jerry Garcia
D. The Grocery Manufacturers’ Association

 

If you guessed “A,” like I did, you’re wrong. “B” is wrong, too. The correct answer is “D,” The Grocery Manufacturers Association. That surprised me also. I’d thought the GMA was totally knee-jerk anti-store brand. But there’s a really well-thought-out piece starting on page 22, where Stephen Sibert of the GMA holds forth with some research that may raise an eyebrow.

 

So it’s clear that the branded folk (albeit reluctantly) recognize a need to change. That’s significant. But precisely what will those changes be, and how will they affect the industry? Some tweeters say brands are already dead, just like print media died several years ago. (I’m miffed that nobody told me.)

 

But in self-defense, branded houses are reinventing themselves, to find synergies with private label programs. Scary stuff, and a tightrope for both sides. Retailers now use private label as a differentiation tool and two or three of them (so far) now actually market their private label as if it were a brand.

 

But are brands going to hell in a handbasket? Nah. The equities are too strong, and there’s a pendulum effect to most everything, anyway. True, structures have to be reinvented, and change will be painful. But we’re looking at change for brands, not death.

What’s interesting is that many “best practice” brands have come to terms with this, and are collaborating on private label with retailers to build profits for all while serving consumers better. (And print media is collaborating with electronic media and finding synergies, despite Luddites like me.)

Some retailers have for too long bled brands dry with slotting, market development fun(ds), research, golf outings, deductions and vileness various. It slowed manufacturer innovation while making retailers junkies for fast fixes unrelated to sales. If nothing else, the move by retailers to marketing private label is helping them understand how to be better merchants, while illuminating the often-overlooked importance of the contribution of brands.