Store Brands vs. National Brands

By Don Oldenburg
Washington Post Staff Writer
Tuesday, June 21, 2005

National brand or store brand? The debate has continued for decades, from researchers studying consumer behavior to customers weighing the upside and down of supermarket items.

The latest argument from store aisles gives a slight edge to plain store-label products. A double-blind nationwide taste test released last month by Meyers Research found that participants overall preferred the taste of private-label products over better-known national brands by 51 percent to 49 percent.

The survey pitted two national-brand items against two store brands in each of 12 categories representing everyday meals -- items such as French roast coffee, orange juice, raisin bran cereal, colas, potato chips, ice cream and cheese pizza.

The national brands included such household names as Minute Maid, Maxwell House, Keebler, Coke, Pepsi, Green Giant and Betty Crocker. The store brands included Safeway, Wal-Mart, Trader Joe's, Target, Whole Foods and Kroger. Making nearly 1,800 taste comparisons were 298 shoppers representing diverse ethnic, gender, economic and household demographics.

"The true test is when the consumer tastes the product," says Brian Sharoff, president of the Private Label Manufacturers Association, which sponsored the taste test. "Most consumers still have their favorite national brands -- although many of the retailers have come up with products that are competitive."

Like the store-brand raisin bran cereal, which testers chose over the national brand by 62 percent to 28 percent. Store-brand orange juice narrowly beat the national labels, 52 to 48 percent, the same margin favoring the store-brand French roast coffee.

Testers (80 percent of whom claimed to "regularly" buy national brands) said snack foods were almost a toss-up, although store-brand chocolate-chip cookies got the nod, 56 to 44 percent, and national-brand potato chips topped the store brands, 53 to 47 percent. The national brands of cheese pizza, chocolate ice cream, chicken nuggets and potatoes au gratin edged out the store brands, but store-brand frozen broccoli won, 64 to 36 percent.

In beverages, Coke and Pepsi topped store brands, 52 to 48 percent, but participants favored store-brand ice tea, 51 to 49 percent.

"What this says to consumers is that they now have products which they can have confidence in, that meet their taste and quality expectations -- and they're the supermarket brand," Sharoff says.

They're also cheaper. A University of California, Davis, Graduate School of Management analysis published last winter in the Journal of Product & Brand Management found that for the one out of four product types (from tuna to soap to instant coffee) in which the store brand was higher in quality than the comparable national brand, the national brand cost 30 percent more. Products whose national brands were higher in quality than the comparable store brand cost 50 percent more.

Store brands gained a foothold in the market in the inflationary '70s and '80s as a price alternative, Sharoff says, but retailers in the '90s started developing store-brand products to be "every bit as good as the national brand." Industry figures show that U.S. sales of store brands have been increasing over the past five years and now exceed $50 billion a year. A report published this month by Packaged Facts, a market research group, concludes that store-brand foods and beverages now account for 20 percent of the products sold in mass-market outlets.

Faith Popcorn says store brands are also gaining momentum because consumers know national brands charge more for comparable products to offset advertising costs. "And people are really getting sick of being marketed to," says the consumer trend forecaster, author of "The Popcorn Report" and "Clicking," and founder of the New York consulting firm BrainReserve.

"I see a tremendous opening for store brands to exceed name brands," she says. "The consumer understands how much money goes into this marketing and they want alternatives. They don't believe in the ethic of it."

Got questions? A consumer complaint? A helpful tip? E-mail details tooldenburgd@washpost.comor write Don Oldenburg, The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

© 2005 The Washington Post Company