The Rise of the Swanky No-Name Brand
The generic “store brand” label has been losing its stigma for years. Now, Target is attempting to further dispel the notion that an in-house brand equates to low quality with the launch of an organic, upscale food line.
The new brand, Simply Balanced, made its debut at Target over the weekend, according to the Associated Press. This isn’t Target’s first venture into in-house food brands. Target introduced the Archer Farms Simply Balanced brand in 2010 as a “budget friendly” collection of healthier foods that promised no artificial flavors, artificial sweeteners or trans fats. (Remember when everyone was talking about trans fats?) Now, Target is rolling out Simply Balanced as its own brand — a (mostly) organic line that will start out with drinks and snacks and expand to 250 products by the end of the year. What’s more, by the end of 2014, Target promises that all Simply Balanced foods will have no genetically modified ingredients.[UPDATE: Target reached out to TIME and clarified that “approximately 40% of the Simply Balanced products are USDA certified organic, and the vast majority of products are made without genetically modified organisms (GMOs). As part of Target’s commitment to wellness, the Simply Balanced collection will eliminate all GMO ingredients by the end of 2014, and Target has set a goal to increase organic-food offerings by 25% by end of fiscal year 2017.”]
As AP noted, Simply Balanced and Archer Farms are supposed to compete head to head with the biggest brands. Qualitywise, these Target-branded foods are expected to be at least as good, and sometimes “better than those made by companies such as Kraft Foods and General Mills.”
Such a concept marks a departure from the long-standing assumption that store brands were essentially for people who pinched pennies and didn’t care much about quality. For quite a while now, many shoppers have known this assumption is outdated and often flat-out wrong. A wide variety of consumer-survey data indicates that fewer and fewer shoppers automatically perceive national brands as higher quality. Many store brands top national brands in blind taste tests.
The Deloitte 2013 American Pantry Study, released this spring, demonstrates that store brands are becoming “more entrenched in the pantry,” as the report’s authors put it. Only 30% of consumers agreed with the statement “I often feel that I am sacrificing when I purchase a store brand instead of a national brand,” compared with 35% the year before. There was also a decline (27% vs. 35%) in shoppers agreeing with the idea that “I intend to purchase more national brands instead of store brands as the economy improves.”
Overall, consumers are increasingly accepting of store brands not merely as good values, but as just plain good. And they’re increasingly willing to pay more, at least compared with the old no-name brands of the past. In 2012, the Wall Street Journal highlighted how store-branded-food prices had been rising more quickly than the big brands. The article singled out Target’s Archer Foods in particular as an example of this. In essence, Archer Foods was able to transcend the no-name connotation, to the point that Target could hike prices.
Now that Archer Foods is necessarily cheap and yet still considered appealing to shoppers, Target is trying to push the idea of a store brand to the next level — in terms of quality, nutrition and price alike. Simply Balanced food prices may compare favorably with some other organic upscale products, but the new Target brand isn’t cheap. Target just so happens to have its own inexpensive store brand: Market Pantry. The fact that the retailer is pushing three separate in-house food brands is clearly a sign that store brands have come a long way.
At the same time that retailers have been exploring higher-end store brands, manufacturers have been heading in the opposite direction. The New York Times recently reported on Procter & Gamble’s initiatives aimed at wooing budget-crunched shoppers with lower-priced brands such as Vidal Sassoon and Iams So Good. The former is cheaper option than P&G’s own Pantene hair products, though still pricier than the typical store brand, and the latter is a dog food that’s about 15% less expensive than the standard Iams product.
What many savvy shoppers probably want to point out right now is this: in many cases, these products — upper- and lower-tier store brands and national brands alike — are all made at the same factories, often with the same or very similar ingredients.