It’s a well-worn piece of frugal advice for those looking to save money in times of economic hardship: Buy generic instead of name-brand groceries. But more and more, in-house brands are actually becoming part of a store’s appeal.
Think Trader Joe’s or Aldi, both of which stock private label goods almost exclusively. Here in Texas, H-E-B has their extensive roster of store-brand items, some of which have quite the loyal following.
Ellen Cushing documents the rise of generic brands in a new piece for The Atlantic, where she’s a staff writer, and joined the Standard with more.
This transcript has been edited lightly for clarity:
Texas Standard: I think many of us have memories of our parents buying generic brand items at some point in our childhood and being underwhelmed. Even now among younger generations, calling something the “Great Value” version of something else is a meme. So why have store brands traditionally been perceived as less than?
Ellen Cushing: They’ve traditionally been perceived as less than because for a long time, they were. Stores just weren’t investing in their generic brands.
It was something they did to serve their more price-conscious customers. They weren’t really thinking about it too deeply. So it was typically, you know, slightly lower quality, no branding, not a lot of investment in, like, R&D for new flavors.
It was commodity – like, we all have those memories of the sort of very basic bag of flour or whatever. It was kind of boring food. And now that has completely changed.
Presumably, these always came from the same or similar manufacturers. Has there really been a shift in quality over the years?
Yeah, they have all come from the same manufacturers, generally speaking – you know, there’s not a secret manufacturer that has just popped up that is making all this stuff. But what has happened is the quality is a little bit better.
I mean, generally speaking, food is getting better across the board because of advances in technology and processing and GMOs. Like all food just kind of tastes better and more flavorful than it did 50 years ago. So that’s part of it.
But another big part of it is that grocery stores are really investing in these products because customers like them. And if you think about it from the grocery store perspective, this is a great idea because they get to skip the middleman, they get to sell products to their customers that they know their customers want.
It gives them more bargaining power in the commodities market. Let’s say a packager that makes cookies says, we wanna sell you these cookies for a certain price. If you’re H-E-B, you can say, well, actually we can make them ourselves now. So we don’t need to take your price.
So, you know, in economics terms, it used to be the grocery stores were price takers, meaning they just had to kind of pay whatever the manufacturers would offer. And now that’s completely changed.
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Well, is this purely economic, or is something else at play? Is there sort of brand loyalty coming in as a factor here as well?
Definitely, definitely. I mean, when I was growing up, I didn’t have loyalty to my grocery store. The grocery store was the place that housed all the other brands. It wasn’t a brand in and of itself.
And now you certainly have intense loyalty to grocery stores. You have people lining up around the block for the new Wegmans opening in their town, and you have people wearing Trader Joe’s tote bags, and you have people professing their love for H-E-B on social media.
People have real loyalty – and fandom, honestly – for grocery stores, and so of course they want the grocery store-branded food product.
I feel like, as a kid, my understanding about generics was they were kind of the same – or this is the line my parents gave me: “They’re the same, they just didn’t spend all the money on the advertising.” And I’m like, no, it does not taste as good, even without the tiger on the box or whatever.
So how did the hurdle get crossed? I mean how did they get people to actually taste things? Or was it just that we all needed to save some money and so we gave it a shot, and then we were like, hey, that’s not that bad?
So two things happened in kind of the evolution of generics that was really important. The first is Trader Joe’s. Trader Joes’ whole model was largely private label. And this was a real revolution at the time.
This was not something that people were doing was making private label goods that had cute packaging and fun names. You know, you had Trader Mings and you had novelty flavors and you have a lot of snacks which people love. Like that was all very new for the grocery world. And other grocery chains started emulating it.
And then a lot of the experts I talked to really pointed to the pandemic when there were food shortages and people had less money. And so you had people stocking up on whatever they could stock up on and often buying generics and trying the generics for the first time in maybe 10 or 15 or 20 years since childhood and saying, like, oh, this actually tastes pretty good. So that was a really big change.
And now with food prices a little bit out of control, again, you know, inflation, the sort of general economic situation that we find ourselves into, people are once again turning to them.
It’s interesting to me that generics as a category were invented during the 1970s when we were in the middle of stagflation and rapidly rising food prices. It seems like we may be facing that again, and people are once again turning to generics.
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Now, one interesting tidbit though, and something you write about as well, is we’re actually starting to see the prices of some store-brand items creep up to the point where they’re really almost the same, sometimes even more than the name-brand items. What’s up with that?
Yeah, I mean, it’s very interesting to me. So it used to be that generics were not special. They weren’t advertised on television. They didn’t have fun names. They didn’t have fun packaging. They didn’t have fun flavors.
And now, if you walk into a Target, for example, you will see specialty branded products. Target has 59 store brands – 59 different store brands that are all under the Target umbrella, but they’re specialized. And you see them advertised on television, and they have novelty flavors.
Basically, they’re doing everything that the name brands used to do that generics were sort of trying to not do – like, generics were a reaction to that.
And now you have store brands, for example, investing a lot in research and development of flavors; that costs money. So it costs money for the stores, and it’s something that customers are willing to pay for. And so what ends up happening is the price kind of creeps up and up. And then, like you said, they’re not entirely distinguishable from just regular name brands.
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