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February 12, 2009

Private Label Branding Finds Perfect Storm of Success in Recession

The debate around private label brands versus commercial brands is rearing its head in Britain, where cash strapped consumers seem to be migrating towards better and better private label brands.

Referred to as "own brands" across the pond, the British are seeing sales shoot up between thirty and forty percent, leading one brand expert to say "everything is up for grabs."

I have watched the rise of private label branding for some time and am convinced that we are seeing a tidal shift, a "perfect storm," of good private label branding meeting a consumer base that is more than willing to save a little money for products that may be a little less known. As a result, companies like Kraft and Sara-Lee are seeing drops in sales as consumers opt for the "brand name bypass."

cremoralogo.gifThe distinct advantage seems to be going to companies like Treehouse Foods. They sell both brand names we all know and love, like Cremora, and great private label brand names, which have recently led to an increase in sales.

Another interesting example is the new V7 computer bag brand name, which actually has premium brands like Targus Group International and Belkin playing catchup, as big name brands are starting to sell cheaper products using new brand naming.

The trend has even extended to window blinds, where consumers report being happier with private label brands over competitive brand names.

The Murketing blog puts it very well when it suggests that private label products are "all very much branded goods. They were simply branded by a retailer, not a manufacturer." These products are seeing huge spikes because they have great price points and the naming and branding is also becoming more and more professional.

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Posted by William Lozito at February 12, 2009 8:54 AM
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So it seems that name brand foods are fighting the good fight against store brands. Store brands have seen a real upswing in sales in the last few months thanks to consumers' new spendthriftiness, but name brands aren't about to just throw in the towel... [Read More]

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