The Economics of Everyday Things
34. Store-Brand Products
Jan 29, 2024
Exploring the origins and popularity of store-brand products, this episode features guests from the private-label industry. They discuss the benefits of store brands, the manufacturing process, and the challenges faced by private label manufacturers.
17:49
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Quick takeaways
- Store brands are created by private label manufacturers who specialize in manufacturing certain products for retailers, often reverse engineering name brand products to create their own versions.
- Private label manufacturers play a crucial role in producing store brand products, using R&D facilities and food scientists to create formulations that closely match name brand products while keeping production costs low.
Deep dives
The Rise of Store Brand Products
Store brand products have become increasingly popular, accounting for one in every five products on grocery store shelves. In the past, these products were known as generics and were marketed as cheaper alternatives to name brands. Today, store brands have evolved and are created by private label manufacturers who specialize in manufacturing certain products for retailers. These manufacturers often reverse engineer name brand products to create their versions, and some even produce both the name brand and store brand products. Private label products offer retailers higher profit margins compared to name brands. Consumers are drawn to store brands due to their lower prices.
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