Today I’m going to confirm a long running rumor about the products in your grocery store. Many of you have already suspected that the store brands and the national brands held little difference. Some of you actually continue to fall for national marketing practices and believe that because you pay a premium for certain foods produced by national brands, they must be better. Well, I can unequivocally confirm that in many cases, the store brands have been produced by a national brand manufacturer and they are exactly the same product.
Some time in 2012, I changed jobs. The company that I went to work for was a manufacturer of a few food products. You would never know the company name, but believe me, you know a few of their brands and chances are that you’ve eaten their products.
I had the opportunity to tour a couple of the company’s manufacturing facilities and then walk through the football field sized storage rooms. What I saw left my mouth agape. There were pallets full of boxes ready to be shipped around the entire country…and most of the boxes were labeled with store names, discount brand labels or were labeled for restaurants.
After a lengthy tour in one of the company’s facilities with the plant manager, he explained to me that there were thousands of SKU’s (those little bar code thingies) for thousands of variations of the same product. I’ll give you an example: let’s say that my company makes potato chips (not true, but it’s just an example). One company might like their chips to be a certain color, so the potatoes might cook a little longer. Another company might like ridges on their potatoes, so they’d be cut with ridges. Still another company might like their chips a little saltier, or perhaps they want their chips to use kosher salt instead of regular table salt. With all of the changes and variations that you can mix and match, each product for each customer might appear to be completely different, when the base product is exactly the same. This happens with millions of item every single day.
Haven’t you ever wondered, how is my local [insert your own grocery store name here] able to produce so many different items? Or why is it that only Costco or BJ’s able to carry certain products in huge sizes? It’s because they contract with the manufacturers to produce certain products in the larger bulk sizes.
Some of you might have done your own little taste tests and confirmed that sometimes the store brands are just as tasty, if not better than the national brands. That’s just because of the formulation that the store chooses.
Before you go thinking that all national brands produce store brands, I’ll tell you now that that is not true. Many national brands have not and will never produce packages for others. Some companies have even taken to labeling their products to state that they do not produce store brands. It’s their way of keeping their brand equity and their ability to command a higher price.
Well, there you have it folks. The next time you find yourself automatically reaching for the national brand, move your hand a little to the right and pick up the store brand, just once. The lack of a difference in taste might just surprise you, and your wallet will thank you for the savings.
Just don’t tell them that I told you.