Consumers Switch to Store Brands in Tough Economic Times

Article from the Feburary 09 issue of Natural Awakenings Magazine . . .  

Consumers Switch to Store Brands in Tough Economic Times
Compromised Ingredient Quality Could Make Them Switch Back to National Brands by Theresa Edwards Makrush

Shoppers searching for ways to save on their grocery, health and beauty products often turn to private label products, or “store brands”, especially during times of economic recession. Neilson, a consumer trends tracking company, reports that in the past year, sales of private label products in grocery stores have increased nearly 10 percent and in drug stores, 15 percent. However, maintaining high quality standards is a concern for the private label industry.

Store brand products are often manufactured in the same plant as national brands, but are packaged with a retailer’s unique label and in most cases, sold at lower prices. While many retailers attribute the low cost of their store brand products to less overhead in marketing and advertising, Brian Sharoff, president of the Private Label Manufacturer’s Association, cautioned retailers and manufacturers that consumers who switch to private label products to save money now are likely to switch back to national brand products if the ingredient quality is compromised.

“The state of the economy can create a historic expansion of retailers’ store brands, but only if the industry remains committed to offering consumers the best store brands possible,” Sharoff said at the industry’s annual trade association meeting in November. Depending on the retailer, manufacturing agreements for quality control and quality standards, variations in ingredients can occur.

One retailer doing things a little differently is Native Sun Natural Foods Market. Named 2008 Retailer of the Year by WholeFoods Magazine, this Jacksonville-based organic supermarket chooses to forgo private labeling and only stock the highest quality national brands. Instead, Native Sun created their “Handpicked By Native Sun” program which tags items that they feel they couldn’t have done better themselves.

“I’ve been to over 30 manufacturing plants to evaluate who we could partner with to make a private label line for Native Sun,” said the company’s Director of Nutrition Beverly Velasquez. “The closest match to our standards for ingredient quality is already used in the national brands we carry and we do not want to compromise on ingredients just to offer a cheaper product that doesn’t work as well.”

The Native Sun commitment to high quality standards takes the guess work out of shopping for natural and organic products for customers. The store bans all GMOs (genetically modified organisms) and only sells products that are free from synthetic ingredients like artificial sweeteners, colors and flavors. Velasquez said Native Sun quality standards also push for products that ship directly from the manufacturer rather than from a distribution center or warehouse.

Velasquez advises customers to look for clues on product labels to determine origin and quality. “If the label states ‘manufactured by’ the company on the label, it is a national brand. If it is a private label product it will state ‘manufactured for’ or ‘distributed by.’ It’s pretty easy to see,” she said, “but ingredient information is more difficult for customers to verify.”

For example in selecting a fish oil supplement, the ingredient list may appear the same from brand to brand, but quality differences are not obvious. Velasquez explained that the size of the fish used and the water quality of the seas where the fish are harvested impact the quality of the oil extracted. “Small fish that haven’t been in the food chain very long and that live in pristine water produce the highest quality fish oil,” she said, noting that some manufacturers use larger fish, or may source the fish from a less desirable water source, and in some cases with private label manufacturing, there can be substitute ingredients when higher quality fish is unavailable.

She encourages customers to do research about brands and how they are manufactured by looking on the Web, checking the history of companies, and looking at the raw materials and processes used to make the products. “Most customers don’t have time for this,” said Velasquez, “but at Native Sun we are committed to this kind of research for every product we sell.”

A Native Sun employee since the company was founded in 1997, Velasquez has 29 years of experience in the natural and organic industry having owned her own food brokerage and manufacturing plant prior to working at Native Sun.

Handpicked By Native Sun

Look for Native Sun Natural Foods Market's Handpicked stickers around the store.

Look for Native Sun Natural Foods Market's Handpicked stickers around the store.

In lieu of private labeling, Native Sun Natural Foods Market created their “Handpicked by Native Sun” program to designate products they feel stand out for quality and value. Previously reserved for only the health and beauty departments, you can now find this sticker on products all around the store. Handpicked items are chosen by owner Aaron Gottlieb and his staff based on Native Sun’s strict product standards and commitment to providing only the best all-natural and organic products at the best prices.

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One response to “Consumers Switch to Store Brands in Tough Economic Times

  1. I like the “Hand Picked” labels. It makes it much easier for me to choose a product in a sea of similarities. I trust Native Sun and love this added option. :)

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