Why Private Brands?
With nearly a quarter of the typical mass retailer’s revenue — and more of its profit — coming from private brands, it may be time for the overall industry to pay more attention to the category in coming years.
According to Alphia, a Denver-based manufacturer of private brands, retailers will not only make more money from the category than they do from national brands, but, frankly, they will have fewer headaches and risks.
In its Private Label Guide, Alphia discussed the many benefits of building a house brand, including lower marketing and sales costs, the opportunity to experiment with their own products and the ability to adjust pricing on an as-needed basis. Of course, the fact that a quality private label brand will attract a loyal audience of consumers must be taken into account too, especially as Internet-based competitors try to steal market share through a strategy of convenience and lower price points.
“It is important for retailers to build a relationship with their consumers; private brands can play a large role here,” said Heather Govea, chief commercial officer for Alphia. “We are here to help the retailers do that with a one-stop shop concept that allows us to manage the process from farm to when the consumer walks out of the door with the product.”
Developing this strategy, Govea added, should be done with a qualified manufacturer with a great track record and a broad array of products a retailer can pick from. “We offer our retail partners the products, the expertise and the commitment to private brands,” she noted. “We have everything covered to produce a quality product that will result in greater sales and profits for the retailer in private brands.”