Friday, May 14, 2010
Generic vs.Brand Name Products
Why is it that when the pharmacist asks me if generic is ok, I don’t hesitate to say yes. However, when it comes to grocery shopping and buying generic vs. brand names, I often hesitate to try out the cheaper of the two in fear that there might be a big difference. But isn’t it worth a try? After doing some research, I think it’s worth it on certain products. Here’s some information I found in my research. Be sure to check out the link below for the taste test results.
When you go shopping in any grocery store or discount big box retailer these days, you're likely to find a growing array of products sold under the store brand or "private label." These goods aim to compete with the national brands you see advertised on TV.
If you're like most Americans, you're increasingly tempted to snap up these blander, cheaper boxes. But where do they all come from?
The answer is a dizzying array of manufacturing plants around the country and around the world that are ready to make virtually any product for any company -- for the right price. The Private Label Buyer, a kind of catalog of product makers, lists 756 companies in an ever-expanding array of categories that used to be the domain of specialty brands: 96 sell organic foods; 10 make alcoholic beverages; 31 make Asian foods. The stores pick and choose among these companies by requesting bids and testing quality.
As a result, each product sold under the same store brand may come from a different plant. And some may come from several different regional makers. Each year the Private Label Manufacturing Association holds a giant convention for companies whose names you've never heard of to meet up with local stores and potentially sell their goods there under a store brand name you might vaguely be familiar with.
Outside the grocery store, Wal-mart is starting to lean more heavily on store brands, following the growth strategy of Costco and Target, the McKinsey report says.
Costco has built the Kirkland line, which is produced by a myriad of manufacturers around the globe, into its own recognizable brand. When they want to sell an Italian suit, they tour Italy looking for the right manufacturer, says Costco spokesman Craig Jelinek.
"What we try to do is build the best possible item and then worry about pricing," Jelinek says. "Some people use private brands as just a low cost item."
Even without the push from retailers, consumers are naturally turning to store brands as economic outlooks turns more gray. According to a survey by Nielsen, 23% of consumers say they're going to buy cheaper grocery store brands because of high gas prices.
Click here for the full article on “The Nitty Gritty of Store Brands.”
Here’s a link to a taste test on a number of common name-brand products and the generics that set out to compete with them. See which was a better value.