Producer Brand vs Retailer Brand – Save Money, Sacrifice Sustainability
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?