Did your nose crinkle a bit in disgust when you read the title of this article? Mine did but I think that’s a family trait I inherited from my Godmother. Thanks Aunt Jeanie.
Moving on… But seriously the thought of store brand, generic foods from the grocery store does not make anyone lick their lips in anticipation. You’ll be hard pressed to find someone say they prefer Wal-Mart’s Great Value brand meats over any known national brand.
The popularity of generic grocery store brands has fluctuated up and down in connection with the state of the economy over the last 30+ years.
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The Days of Disco
Remember the 70’s? Those of us that do, remember that this is the decade that gave birth to generic grocery store brands. Double digit inflation gave rise to no frills, lower costing versions of popular foods. Generic brand foods were generally plain white with very little wording and the food was not good. This is how store brand generic foods got their bad reputation.
Thankfully over the last 30 years a lot has changed. Our hairstyles, our fashions, and even our food. Generic brands tasting like cardboard are a thing of the past too. A blind taste test conducted by Consumer Reports recently found that many generic, store-brand foods taste as good, if not better than their pricier name-brand counterparts. Out of 29 different food categories brand name and generic brand foods tasted equally as good in 19 different categories. Taste testers only preferred brand named food in six out of the 29 categories and generic brand food actually beat out brand name food in four of the categories!
NPD Group, a leading market research company, found that in 2008 almost 25% of all food and beverages served in U.S. homes were store brands, an 18% increase from 1999.
And it’s not just lower income households that purchase generic store brand food. That same study revealed that households making $70,000 a year and higher served generic, store brand food 33% of the time to their family, compared with only 30% of households making $30,000 or less per year.
How do store brands win taste tests against their national, name brand counterparts? Many of the name brand foods you see in grocery stores also produce store brand products.
A number of well-known national manufacturers who produce name brand foods, beverages and products also produce generic, store brand items. Companies like Alcoa (makers of Reynolds Wrap Aluminum foil), Bausch & Lomb (makers of contact disinfectant solutions), Chicken of the Sea (canned tuna), Hormel, Birds Eye (frozen veggies), McCormick, and Sara Lee (baked goods)all produce generic versions of their higher priced name brand items for stores across the world.
Generic brands of food can be sold cheaper because they don’t incur the higher advertising and product development costs that their brand name counterparts do. Name brand foods and beverages spend millions of dollars advertising the features and quality of their products each year. They also spend a significant amount of money trying to improve their products by infusing them with the trendy vitamins and nutrients. Store brands don’t spend money on any of that.
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Some of you might be saying “Well that’s just fine that generic brands taste as good as name brand foods and beverages but this is a newsletter about saving money. ”
Right you are my loyal reader. I’ve seen savings reported as high as 3000% off name brand products.
Over the counter generic brand pain medications are the biggest money savers. Name brand pain relievers like Tylenol are identical to their generic brand counterparts. Just read the labels and you’ll see identical ingredient lists. Why pay more for an identical product?
A name brand pain reliever containing acetaminophen goes for about $10.99 at the grocery store. The store brand equivalent goes for about $6.99, a 57% savings.
Savings like these can be found in virtually every over the counter medication and many health related products. Everything from cold medicine to eye drops.
Milk is another one. Generally milk is a loss leader for grocery stores, meaning stores are willing to lose money on the item in hopes while you’re buying milk from them you’ll pick up a couple other items to make up for the loss. Name brand milk will run you about $5.45, while generic, store brand milk runs closer to $3.39. A difference of over 60% in price.
Buying generic, store brands instead of national brands can save you about 30% on your grocery bill according to the Private Label Manufacturers Association.
They also estimate you can save up to 60% if you buy generic soda over name brand Coca-Cola or Pepsi products. Generic cereal and ice cream can rack up a savings of 30% or more and store brand frozen pizza saves 23% on average over their name brand competitors.
Cleaning products, spices, and bottled water were other categories where significant savings of generic brands over name brand products can be found.
Know Where to Look
Besides snazzier packaging, you may not even notice a difference between generics and their brand name counterparts. Grocery stores today give generics and store brands more prominent placement on shelves. This along with flashier packaging has allowed store brands to better compete with their name brand counterparts.
Almost all grocery retailers offer food and beverages under their cheaper, generic store brand name.
Kroger offers Kroger Value.
Costco has Kirkland Signature.
Wal-Mart has its Great Value Brand.
Publix sells many organic items under its Greenwise store brand.
Winn-Dixie sells beverages under its Chek brand and food under their generic brand Thrifty Maid.
My favorite place to shop for store brands has to be Aldi. I don’t have one near my current home in southern Florida but whenever I visit my family in St. Petersburg I like to stop in and marvel. Aldi is a genius at providing no frills shopping, but the savings is worth it.
You’ll notice the difference between this retailer and others even before you park your car. You won’t find metal carts strewn across the parking lot. All of them are stacked neatly at the front entrances of the store. That’s because Aldi requires a 25 cent deposit to use their carts. Their carts have a small coin repository on the handlebar. You get your quarter back when you return the cart at the end of your shopping trip.
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When you enter an Aldi you’ll notice even more differences from other grocery stores. Aldi stores selection is smaller and almost all products are labeled under their own store brands. The shelves down each aisle are stacked with food still in the boxes it came in. They charge for bags if you don’t bring your own and require you to bag your own groceries. Plus they only accept debit cards or cash-no credit cards or checks. They do all these frugal things to cut down on the cost of running the business, so in turn they can transfer the savings down to the consumer.
So next time you’re in the grocery store put that brand name down. This cost cutting measure is one of the easiest methods I’ve found. Ingredient labels detail just how identical generics and name brands are.
Until Next Week….
Keeping Money In Your Pocket,