IN MY OPINION 1994-11-14

Philip Fitzell

It's time for a change of terms in the world of private labels. The term "private label" itself has evolved far beyond its original connotations of a bargain brand or generic (no-name) product. In today's retail marketplace, private label carries diverse meanings because of its different quality tiers. It ranges from the acceptable up to superior quality. People, unhappy with its historical connotations, are using other terms to describe private labels today. Some now call it a retailer or retailer-controlled brand. Others think of it as a store brand, private brand or distributor brand. Some people still call it a house brand. Alternative terms, such as knockoffs, controlled labels, generics and bargain brands, are still in use. Private label itself holds on as a catchall phrase. It's still viable today, but more limited in definition because many programs are marketed like brands. Private label, however, is more than a brand. For decades, it has competed against the brands. These labels are still special, secret, singular, secluded -- all the meanings associated with private. They are owned by companies that are principally involved in businesses other than manufacturing. The manufacturers own the brands they produce; private labels, while produced by manufacturers, are owned by someone else -- a retailer, wholesaler, cooperative, marketer, broker, distributor, etc. There is a difference between the two. Private-label owners cannot rightly identify their products as a brand or even a store brand. Its marketing reaches beyond the store.

In today's marketplace, so-called private-label products have more of a public presence. They are advertised on regional and local TV and radio stations, as well as in leading national consumer magazines. Many manufacturing sources have come out of the closet, proudly proclaiming they produce these products. Some retailers add the manufacturer's name to the private label, making the product source no secret anymore. There is much more product development and innovation under way -- just like for manufacturers' brands. Traditionally, private label followed the lead of the national brands. It could do no better. Today, it does a lot better in terms of bringing the consumer added value in more product content, in a better price, in comparable or better product quality and in exciting packaging. How do you distinguish between private label and brands? Manufacturers do not market their brands on an exclusive basis; the logos, owned by nonmanufacturers, almost always are offered on an exclusive basis. This term "exclusive" better reflects the singularity of these latter products.

It's time to adopt the term exclusive brands and make private label more public; that is, identify it as more unrestricted, more widespread, but still distinctive from being just another name brand. It really is an exclusive brand today.

Philip Fitzell is publisher of Exclusive Brands International Sourcebook.