Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 5, 1994 TAG: 9411070026
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: FROM STAFF AND WIRE REPORTS
DATELINE: LENGTH: Medium
It's not so much the not-so-sharp packaging, although the label written partly in French is a nice touch. It's the price: For just $2.59, shoppers can buy a 13-ounce can of President's Choice gourmet coffee. Two name brands stacked nearby in this St. Louis grocery store go for $4.09 and $5.79 a can.
President's Choice is one of many plain-label products gaining popularity among supermarket shoppers.
A distant relative of the generic foods that became popular in the late 1970s as the recession took hold, plain-label - also known as private-label or store brand - foods are sold under a store's own name or a name created just for the outlet.
Just about every supermarket has them, sitting on the same shelves as the better-known, higher-priced national brands. At chains such as Harris Teeter in the South and National in the Midwest, President's Choice staples include cereal, soda, cookies and mayonnaise.
Plain-label items make up about 20 percent of the grocery market, up from 15 percent in 1988, according to the Private Label Manufacturers Association in New York.
"It's more of the low- to medium-income families who are buying them," said Russell Robertson, assistant manager of Food Lion's store on Orange Avenue in Roanoke. "But sometimes higher-income families will buy them, too."
Analysts say the reason is twofold: The price is right and the quality has improved dramatically.
``The private labels today are different than the generics of the past,'' said John M. O'Neil, who follows the food industry for Oppenheimer & Co. in New York. ``The generics competed only on price, and the quality suffered. Now it's price value. You're getting the similar quality of the name brand at the lower price.''
The price differences can be startling.
At Kroger stores nationwide, private-label products account for about 15 percent of all food sales, said Paul Bernish, spokesman at the company's Cincinnati headquarters. And of that total, 65 percent come from the dairy sections.
Private labels typically are stocked next to their brand-name equivalents. "That is done on purpose," he said. "Since private labels are less expensive, we want to show customers the difference in price.''
One of the biggest makers of plain-label foods is St. Louis-based Ralcorp, which was spun off from Ralston Purina Co. this year. The company makes plain-label cookies, crackers, cereal and other foods.
In fact, the plain-label cereals it makes for Kroger, Food Lion and other chains outsell its name-brand Chex, Almond Delight, Muesli and Cookie Crisp.
``The economic downturn of a couple of years ago prompted consumers to try these brands,'' O'Neil said. ``I think a lot of them tried them and found the quality was there. A lot of people have continued to be repeat customers.''
Staff writer Claudine Williams contributed to this story.
by CNB