Consumer Reports has just announced a study that showed that a group of private label brands taste as good as or better than their national brand competitors.
According to Consumer Reports, “Some of the clear winners were Archer Farms Chewy Soft Baked Cookies (Target), Kirkland Signature Organic Medium Salsa (Costco) and Great Value Whipped Topping (Wal-Mart), which outperformed products from Pepperidge Farm, Old El Paso, Betty Crocker and Kraft.”
I’m not surprised with the findings. And coming from this well-respected publication, it’s a very worthwhile piece of research. I’ve commented on the steady quality improvements private label manufacturers have made in recent years, which have been driven by retailers’ need to compete head to head with national brand vendors.
But to put another perspective on this research one has to realize that when it comes to taste – taste isn’t really all that matters. What I mean is that brand perception has been shown to affect consumer taste buds. Yes, it’s true.
Over the years we have been involved in the “reverse” of this research. And time after time it’s been proven that the brand directly impacts taste perceptions. Consumers served the exact same product but with different brand names will perceive different taste profiles and imbue the branded products 
with more favorable attributes than the exact same product bearing a “lesser” brand. After tasting the EXACT same product, Sunkist orange soda tastes better and “more orangey” than Fanta. Oreo Cookies and Cream Ice Cream is crunchier and richer than Breyer’s. Killian’s Red is smoother on the throat than Bass Ale. And the bubbles in Perrier are more refined than those in Poland Springs.
The product has to stack up if retailers are going to continue to grow their private brands. NO question! And this report clearly shows that it’s happening. But the branding has to be right for retailers to ever really win the battle for their customers’ hearts - as well as their minds.
It takes time to build brand equity. Consumer attitudes about proprietary brands are improving, but it will take years before they can compete head-to-head – no matter how good the quality in the box.
As I’ve said in past blogs, one solution can be for retailers to develop strategically sound, exclusive licensing relationships and co-branded lines that compete with the national brands from day one. This is the way for retailers to acquire brand equity for their private sourced businesses quickly and efficiently. (For instance, check out previous blogs such as Costco signs deal with Iconix to sell Charisma line or Staples maximizes in-store assets to build its brand.)
Developing brands the right way requires a clear vision of the retailers’ long term branding goals paired with on-target research and creative abilities.
Have your taste buds ever betrayed you because of your trust in a favorite brand? Let me know your thoughts about the benefits and drawback of building versus licensing proprietary brands.
