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August 15, 2008

Generic Naming and Branding Ups Its Game

People are turning to supermarket brands as times get tougher (as many as 60% of us), but that may be a good thing.
Store brands are no longer the boring stuff of yesteryear. Kroger's "Private Selection" and "Naturally Preferred" look enticing on the shelf, and Kroger, alongside Supervalu and Safeway, all seem to be creating a surge in their private label branding, and it doesn't hurt that their offerings are high quality.

Not only do store brands need the same finesse as regular brands, but as store brands get more popular, they may find themselves growing beyond their home stores.

Safeway's "O Organics" and "Eating Right" brands are really a case in point, and are taking on Whole Foods on its own turf. O for Organics is looking for $400 million in sales and isn't really all that cheap, it's just less expensive than its nearest competitor.

Consumer's rising comfort level with generic grocery naming is likely to spread to generic drugs as well. This means that private labels are going to have to up their game.

According to a WPP report, private label penetration is growing globally at 5% per year.

In Germany and the UK, private labels now count for almost 50% of all products sold, but the United States it's 17% and growing at 7% a year.

It seems to me that the opportunities for naming and branding are coming from both directions: generics will want to use really sophisticated naming practices to keep up the attack and their competitors are going to have to find distinctive brand names to stop the onslaught.

One look at "The Eating Right" and "O Organics" range of products demonstrates that store brands are doing their marketing homework. People don't just buy these because their cheap: they buy them because there is some really enticing brand names and brand quality.

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Posted by William Lozito at August 15, 2008 8:04 AM
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