Wednesday, June 10, 2009

Generic versus brand-name

Posted By on Wed, Jun 10, 2009 at 12:00 PM

grocerycartwhiskeyboytx_thumb_510x382.jpg


Let it be said once and for all that when it comes to ketchup, no restaurant should mess around with anything but Heinz. Sure, it's all well and good to have premium house-made ketchup but if some people don't want that (and they won't) you better have that classic awkward-pouring glass bottle ready just in case.

There are only a few other food basics that merit such loyalty. Hershey's chocolate syrup, Oreo cookies, Tabasco, Frank's Red Hot Sauce and Sriracha, for instance. Yet in categories where there's no one correct product people still buy name brands over store brands. Is it worth it to spend the extra 50 cents on Jolly Green Giant spinach versus the grocery store's brand?
 
The financial Web site The Street looked into the question and came up with a surprising conclusion: As the difference in quality between name brands and store brands has declined, the social stigma of buying the cheaper store brand has all but disappeared.

Name brands may be contributing to their own demise by also

producing the cheap store brands in their factories.

Alcoa,

the maker of Reynolds Wrap Aluminum foil, produces store brand foil.

McCormick produces herbs and spices without its signature label, and

Birds Eye, known for its frozen vegetables, produces a number of frozen

and canned vegetable products.

In other words, there's no

reason to pay extra for the above products and the savings are no

laughing matter. Store-brand health-and-beauty products are often more

than 50 percent less expensive than the category leader. In the tight-margin

food industry, store brands are still 25 percent cheaper.

Sometimes,

though, there are big differences (such as with Heinz Ketchup and

Hershey's syrup). When in doubt, check the ingredient list:

Store brands that emphasize value may contain cheaper ingredients,

and even when national brands manufacture a different type of product

to be sold as a store brand, they make it to the store's own

specifications, which could mean a change in ingredients.

(Image via Flickr: Whiskeyboytx)

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