Private Label Hysteria

The Private Label people are sure the world will never end.

It's the same thing that we heard during the last run-up in gas prices: Americans would switch to more fuel-efficient cars and would slow down. The next time you're driving on the highway, check the speed of the cars rushing past.

Check your own speed.

The truth is that Americans LIKE the profligate lifestyle we've come to know from decades of plenty. Whether its overeating or overspending. So when I head claims that a "paradigm shift" in retail habits will mean the continued expansion of Private Label goods, I smile.

Cooler heads think a bit different. This study sees a flattening-out of PL purchasing. For one reason, brands produce intense consumer loyalty. For another, simple greed will play a part. It's true stores COULD use the savings from sustainable practices and using local commodities to keep their house brands much cheaper than national ones. After all, the large CPG houses have to ship their products all over creation, while the regional grocer can use a local co-packer. But we all know that isn't going to happen. The cost savings will end up in the P/L under a big, fat PLUS.

And don't think the brands are taking this lying down, either.
Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)