Business

Mar 29, 2011

Stacking the shelves: the rise and rise of home brand products

As the pricing war between Coles and Woolworths heats up, there are concerns the push toward home brand products could see consumers left with less choice in their trolley. In part one of an ongoing series, Crikey examines the rise of generics -- and market power.

Tom Cowie

Crikey journalist

If you’ve received a glossy supermarket catalogue in the mail recently, you’re aware the battle for Australia’s $80 billion grocery docket is well and truly on.

22 comments

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22 thoughts on “Stacking the shelves: the rise and rise of home brand products

  1. Tim nash

    I am going to go against the tide here and argue for the home brand generic product.
    I do most of my shopping at the larger supermarkets and have observed a sophisticated change in supermarkets generic product. It’s not just home brand potato chips and orange juice anymore. Generic products are beginning to become innovative and introduce new products that had never existed in that market beforehand.
    Yesterday I purchased a Woolworths brand Portuguese tart- I cannot get one in Newcastle at any bakery. It’s the same with so many other products. The introduction of more generic branding can bring about more change and variety not less.
    In the past supermarkets gave shelf space to competing products, anyone browsing in todays supermarket encounters a freezer filled with 19 different kinds of margarine. With the generic product it serves no purpose to market one product like this, it does however open up shelf space to different varieties of the same product.
    Australian producers don’t always loose out either, some are getting a raw deal like milk farmers (and that is unfair) but many others that we never hear from are finding a market for their product that simply never existed before.
    Supermarkets have new products that demand new resources and increase their sales by being innovative. They have utilized their own shelf space something which any idiot could of predicted and sought to drive down the prices of their raw materials which any producer would do.
    Eventually Coles and Woolworths will invest in land and in primary producers finally completing the cycle becoming a mini communistic food collectives an unusual outcome for a capitalistic enterprise

  2. Parnell McGuinness

    Hang on just a sec – I think we need to take a step back from the hysteria.

    For years we have been told that what’s inside the home brand can is the same as what’s in the branded can – but without the pretty exterior and expensive marketing campaign.

    There are, simplified, two reasons why someone might not buy a cheaper brand:
    1/ An increasing skepticism of advertising (or less convincing advertising), OR
    2/ For quality reasons.

    So either people are not convinced by the quality advantage of the more expensive products anymore or they are less willing to pay for an expensive ad campaign to go with their baked beans on toast. Why is this a problem?

    Alternatively, is the thesis that our taste buds are declining so we’re more willing to eat crap? Because if so, that’s a whole different topic.

  3. wayne robinson

    I like generic products.

    I don’t like having too much of a choice. Who needs 50 different brands of soap. Andreas Eschbach in ‘Ausgebrannt’ said you only need two brands of each product; the cheapest and the best.

    I like to be able to go to the supermarket and be able to quickly pick up the products that I’m used to, so I also buy branded products.

    A little gripe … A certain brand of flavored yoghurt in 6x200ml packs was unavailable for 2 weeks, because the packaging was being redesigned. It’s just appeared again on the shelves, in 6×150 ml packs, for much the same price!

  4. Allison

    Husband has been saying this for yonks, support home brand at your peril, we will end up with less choice and more expensive products.

  5. InSilence

    There is far more choice in English supermarkets such as Sainsburys and Tesco than there is in Australian supermarkets and home brand products dominate sales there. For far too long in Australia brands have been selling food at ridiculous prices due to the lack of competition – home brands are finally providing that competition. I try and buy as many home brands as possible – the quality is usually just as good as brands and substantially cheaper. I have no interest in trying to keep Paul’s milk a viable business if they think that charging $4 for 2l of milk is good value.

  6. FunkyJ

    Consumers don’t care about this shit. They don’t care about what the government will say. They want cheap prices and quality goods.

    Marketing, marketing research, advertising, re-branding, and packaging “brand name” products is make those products more expensive than their “private packaging” equivalents.

    Instead of reducing these overheads, brands reduce the quality of ingredients whilst raising the cost of their products. So whose fault is it really if they suffer because of competition?

    This is just another example of an industry tied to old 19th and 20th century models of business, stuck in the past, and afraid to take risks. In an age where TV, radio and print are becoming obsolete as separate mediums, they’re unwilling to change their attitude towards competition, marketing and most importantly, consumers.

    And most annoying of all, instead of responding to consumers needs, they’re using the Government as police to protect their dwindling profits, wasting our tax dollars on stupid inquiries that will only end up hurting consumers more.

  7. Santo Calabrese

    I may have this wrong, but if Coles and Woolworths ditch the brand name products that people are familiar with, why bother with Coles and Woolworths when Aldi are offering product that is not a recognised brand anyway?

  8. David Marnie

    Another superficial commentary on supermarkets without reference to the success of Audi supermarket chain and its threat to the current business model.

    Expect more from Crikey than recycled op ed pieces.

  9. Parnell McGuinness

    Dear Wayne,

    Let us never impinge on your right to choose not to have choices. Or your outrage at not being able to choose (or not to choose? I’m getting so confused) a certain flavour of yoghurt, because it’s at the yoghurt fat farm, losing 50 grams.

    Sincerely,
    Parnell

  10. michael crook

    Not to to mention the low nutritive value, high nitrogen content, fruit and veg sold by these giants from monoculture farming.

    It is time to break these corporations up, they have too much power and too much market share.
    Woollies are the biggest owner of pokies in Australia (11,000) and the largest purveyor of alcohol, so they inflict a hell of a lot of damage on the Australian people.

    Boycott Coles and Woolies, Aldi is far cheaper, and allow their check out people to sit down, and IGA is, generally, more friendly.

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