Although supermarket retailers hadn't yet come close to making inroads into the private-label arena in the 1950s, events that took place then and in subsequent decades had an impact on how consumers went about obtaining and selecting their weekly groceries.
"In 1952, it was a very different America than what it looks like today. The Dodgers had not moved to L.A., everything west of the Mississippi was deemed to be in another continent, people were not flying; it was a slower America," said Brian Sharoff, president of the Private Label Manufacturers Association, New York.
And, he told SN, it was a time when national-brand manufacturers were heading into a promotional blitz that would secure their prominence in the nonperishable food arena for some time.
Of all inventions, the television, he said, really helped consumer packaged goods manufacturers influence the mind-set of the grocery consumer, who began to be inundated with advertised images of various brand names and the messages they portrayed.
"You had the national brands using their muscle by advertising on TV to bring people into the supermarket to buy products. These manufacturers were in their heyday; private label was not," Sharoff said.
But, as the cost of television advertising began to increase and vendor's coupons were thrown into heavy circulation, an erosion of brand loyalty began to occur. Retailers, looking for a way to offer fiscally conservative consumers a better value, began to try their hand at private label.
"Initially it was a price move and the attempt was that you had a private label that sold at a discount from the national brand. And, the idea was that, because you saved on all the promotion and advertisement that the national-brand folks did, you could offer a comparable quality," said Ned Dunn, who retired from his post as president of the Matthews, N.C.,-based Harris Teeter five years ago. He is currently president of the Colonial Williamsburg Co., Williamsburg, Va.
As grocers made improvements to the quality, packaging and value of their store-brand products, the industry's market share grew in units to reach about 20% by the late 1990s. "The growth of private label was directly proportionate to the fall of national brands," Sharoff noted.
Today, carrying a private-label line is key to the financial success of retailers across the globe. And, grocery stores have become synonymous with their private-label lines.
"Fifty years ago stores were stores and products were there from manufacturers. But today the retailer has become the brand and that creates a very different equilibrium," Sharoff said.
"Consumers buy stores more than they buy brands. It may not be true with an apparel store so much or a hardware store, but boy is it absolutely true of a supermarket," said George Whalin, president of Retail Management Consultants, San Marcos, Calif.
"There was a day when, had somebody suggested that you could sell soft drinks that weren't Pepsi or Coke, people would have laughed at you," he added. Now, he continued, "with the major supermarket chains, if you look at the Safeways and the Krogers of the world; people buy Kroger because it's Kroger. And if Kroger has a house-brand product they're going to be less reluctant to buy it.
"There's more and more kinds of things in the supermarkets, that the brand is not necessarily so relevant," Whalin added.
And, various promotional devices previously reserved for national brands now help introduce or further endear consumers to store brands. From circular advertisements to in-store sampling to private-label prize vans, retailers are continuously fostering relationships with shoppers.
"I think they [retailers] have started to do what the national brands did on a smaller scale and that is promote. And, that's because the private label is a small brand, which is part of a larger brand, which is the chain brand," Dunn said.
Private-label packaging, too, has come a long way.
"The packaging went from pretty basic stuff, which would go along the lines of price-oriented, to really first-class packaging where you have to look closely to realize you're not looking at a national brand," said Dunn.
"The important thing is that private label is not going to go away. It will continue to at least stay where it is in importance, if not gain some, particularly in stores that are really working on the uniqueness of the brand," he added.
