Tweak Your Biz » Marketing » Producer Brand vs Retailer Brand – Save Money, Sacrifice Sustainability

Producer Brand vs Retailer Brand – Save Money, Sacrifice Sustainability



Last week I gave a talk at the Wexford Expo, an event that turned out very well buzz-wise as well as biz-wise.

My talk was about new rules for marketing now – it went down well, but that’s not what this post is about. This post is inspired by another speaker on the day, a journalist from the paper of record here in Ireland whose talk was very enjoyable and instructive but one part of it got my dander up enough to create a little bit of a debate at the end.

The speaker was recommending that the members of the audience switch from buying branded milk and other goods to buying own brand. The argument being that it is much cheaper and it is same product, same producer, same cows and the insinuation that this is still supporting the producer.

Now, I understand the intention of this is to save money for the consumer but I have some issues with it:

1. Support of local producers

Even if the same local brand is producing own label, by buying own label the long term viability of the producer is being put at risk. Without a strong brand, the producer is far more vulnerable to delisting : if the retailer gets a better deal elsewhere, they can very easily change suppliers without too much fuss. So, in my view, this is just very short term thinking. If we don’t support the local supplier’s branded product and don’t allow them to make a profit, they may not be able to survive and that will have an impact on our local economy.

2. Choice for consumers

The own-brand trend presents a threat to the choice that is offered to consumers. To me, retailers should be more like curators, not creators, sourcing wonderful products for consumers and facilitating our purchase of them. Idealistic, I know (especially as the own-brand phenomenon has been around since the 50’s in the US) but largely, I feel it would be better for us, as consumers, if they stuck more to that role.

3. Long term cost-effectiveness

I am not convinced that we, as consumers, will save money in the long term through buying own label goods. I have seen on several occasions the lowering of the price an own brand product for a period long enough to get consumers to switch and to hurt the branded competition, followed by the sharp increase the price of own branded again.

Of course, all businesses exist to make a profit and we certainly can’t blame retailers for developing clever ways to do so, but we need to be clear that if we want to support local producers, we have to support local brands.

What do you think about own brands?

“Image from Victor Correia/Shutterstock.”



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The Author:

Paula Ronan heads up Angel Marketing - an award-winning marketing agency in Ireland. Paula's experience in developing marketing stratgies, marketing plans and campaigns ranges from Coca-cola, BT, Sky TV to Today FM, Publishing Ireland, DoneDeal and lots of growing and start up businesses. Likes - strategy, creativity, integrity and straight-talking! http://www.angelireland.com

Add Your Comment

  • http://www.tweakyourbiz.com Niall Devitt

    Hi Paula, From the consumer’s point of view, I can see how own brand is attarctive right now but I think you raise some powerful points against. The reaiity of course is that own brand will push smaller providers out of the marketplace unless they can come up with innovative ways to compete. From an Irish perspective, we’d seen the rise of an artizan food industry which continues to provide us with a bright light. I invited Margaret from @oldefarm to speak with me at a conference last week, and their’s is a wonderful and inspiring story.

  • Daniel

    Hi Paula, some interesting comments and I suppose as in most things in life it cannot be seen as black or white. A smaller manufacturer that doesnt have a huge budget to build a brand finds it extremely challenging to break into a market. By producing own brand products it allows them to build a market and build volume on the back of the large retailers brand. Yes the retailer can find another supplier but then the supplier is also free to find an alternate retailer. The major retailers such as Tesco and Walmart are hesitant to stock the same smaller brands as each other but again while producing own brands you could supply to four or five major retailers and the perception is that they product is comming from different suppliers. I think the biggest danger is if own brand manufacture becomes too higher portion of your total turnover. Certian retailers have rules that will not allow you to supply them if the loss of their business will have a massive effect on your business. A view from the other side!!!

  • http://twitter.com/paularonan Paula Ronan

    Thanks for your comment Niall. This year’s Edelman Trust Barometer research report indicated that consumers now need businesses to be there for more than just making a profit, they need to have a purpose too. Lots of big retailers are paying lip service to this but making it very difficult for small local producers to grow or just even to keep going. We know that all businesses need to turn a profit, but it’s got to be done in a way that will nurture a healthy local economy for the long term.

  • http://twitter.com/paularonan Paula Ronan

    Thanks for your response Daniel. Yes, you’re right, there is an opportunity there for producers to build volume sales, there is just less security for them as there is no apparent consumer demand for their brand. It’s good to hear that there are some retailers who have a responsible attitude to their suppliers:) Very interesting points, thanks!

  • http://www.garrendennylane.com/blog Lorna

    That would have got my dander up too.  I have a huge problem with the supermarkets sourcing foodstuffs and selling them under own label, fair enough if the producer gets the same price for it but do they? With supermarkets like Tesco’s and Dunnes the answer is probably going to be no. With Aldi, apparently they take a much lower margin on items such as vegetables and pay their suppliers a fair price and pay what they said they would but I don’t know if that works the same for their flour and bread etc.
    I have a huge problem with people buying Tesco milk for example, much is sourced from Northern Ireland where they pay a lower price for it.  If we all spend an extra €4 a week on guaranteed Irish products, we will create an extra 6000 jobs. As consumers, we have the power to turn this country around, we just have to think about how we spend those few euro each week.

  • Paula

    You’re dead right, Lorna! We all have a responsibility to think long term and think about what’s best for our local economy. 

  • http://www.applesonpress.com/durable-laminated-waterproof-labels.htm Granville Lochrico

    Buying locally made products always makes sense. Not only will you be supporting your community, you will also be helping the growth of the local economy.

  • http://www.bloggertone.com Niall Devitt

    Super overview Elaine! In my opinion, the lone ranger needs to also have a guest posting & commenting strategy – if he or she is serious about growing their blog. Blogging in complete isolation is probably the least effective strategy to start with.

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    That’s an excellent pointer Niall, thanks for sharing. Isolation does not sound very social and collaborative, and a Lone Ranger’s blog will not be compromised using this strategy.

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Thanks Marie,
    In fact your mix is a perfect example of how a blogger can achieve the best of both worlds. Again, it’s all down to what you want. Thanks for reading and sharing your view.

  • davidquaid

    That’s a great blog title and post. I think very few people well get to Seth Godin status, even locally, so I think the blogger community makes sense for most – possibly 90% – of bloggers, especially new to space.

    The biggest factor: as people gear up their content production, having a network like this might be the only way to maintain an audience.

  • davidquaid

    Indeed – but then if you’re going to venture into connecting with people offline from online, then TYB makes a good case for having a friendly group for your first meetup!

    Seth makes some good points about going viral and the value of thousands who enjoy reading soundbites but that is far different from a blogger for say a Health and Safety Business. I think ‘Zen of Tribal’ noise is the best summary I’ve read

    The chap with the 700k+ followers who wrote (humorously) that “Social Media is ******” muses that its best suited to Journalists and Comedians. Indeed, ‘content curation’ on facebook pages (imitating a Mashable or TechCrunch) to me is the worst form of engagement (if you had to introduce a sliding scale of subjective opinion). – but the ultimate is blogging for yourself – with or without others – your content should be king :)

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Hi Tina,
    Great comments thanks – yes sometimes it can be a cat and mouse game, or perhaps chicken and egg – which should we attempt first, when starting off? The lone ranger can be very resourceful on his own, but being part of a posse has its advantages too

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Well David, I am not sure if you are familiar with the TYB community, but I do believe it’s quite unique and very special as there is a very high level of participation behind the scenes, and we have been know to luncheon together also :)

    I think your final words say it all – content is king – still!
    There is no point in being an emperor – you may just end up with no clothes!

  • davidquaid

    Did I say content is King. Context is Emperor. Content is key — but without conduit its lost. Thats why TYB is so important – not because of content but because of conduit.

    Quality of content is determined by the user. Badly written without images is fine in many circumstances – like a forum.Whether content is King or not, its getting the right people to the content is the challenge.

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    and that indeed IS the challenge, I think I need more carrots!

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Very useful comments, thanks Elli! Best wishes with your new guest blogs

  • k8twopointoh

    Marie, that’s amazing that you blog individually along with a community. Do you have a blog site that you can share?

  • http://www.ahaingroup.com/ Sian Phillips

    Welcome to Tweak Your Biz Dylan. Scary to think 2014 is coming along so quickly but scarier still is the speed of new technology trends which we have to keep up with. I look forward to your next post

  • Harry

    Mobile devices and anytime, anywhere connectivity is the most profound change of all these trends. Just imagine the efficiency and productivity gains businesses can achieve by being able to access data and take care of business on the go.

  • http://www.tweakyourbiz.com/ Sian Phillips

    Thanks for putting this together Niall and delighted to be included too

  • Jenny Brennan

    Thanks for including me Niall :-)

  • http://www.ahaingroup.com/ Niall Devitt

    You’re welcome Jenny!

  • http://www.ahaingroup.com/ Niall Devitt

    No problem Sian and well done.