Home brands are still evolving
Who wants to shop in a supermarket that only stocks own label products?" Troy McKinna - Mumbrella
Well - all the people in the picture above, and all the people who flow through the doors of Aldi every day. Yes they stock a few name brands but not all the time, and not often. They are usually part of a some kind of promotion. Everything else in the store is an Aldi home brand item. It may have a name like Brannan's butchery, or Portview (sardines) or Choceur (chocolate), but essentially they are all home brands. Brands packed and made by somebody else for Aldi. They even go perilously close to copying the labels of the brands they are replacing. I suspect the yoghurts that I buy might actually be Tamar Valley yoghurts but they are not sold as such. They have a made up name.
So the question at the top of the page is rather naive and you wonder how a so-called expert in branding could make it. This Troy McKinna is described as an entrepreneur and brand building specialist, and the comment came in an article about how Coles and Woolworths were killing Australian brands. It seems to me that even if he is right about home brands killing name brands he is directing his ire at the wrong companies. Well at least in part. Coles and Woolworths still stock brands - and will continue to do so - at least as long as the customers buy those brands. Aldi don't.
In an article in the AFR in June 2018, Sue Mitchell stated that:
"Coles sees scope to lift private label penetration in packaged groceries to more than 25 per cent or one in four, compared with about 11 per cent at present, as part of a strategy to lift total private label penetration to about 40 per cent of sales in five years." Sue Mitchell AFR
Which the then Managing Director, John Durkan said was:
"hardly panic stations. That still suggests three out of four times the customer is going to buy a brand." John Durkan Managing Director Coles June 2018
True.
But actually I wasn't going to write about the pros and cons of buying home brand items. I was actually going to write about how those home brands have evolved over the years.
I don't think there was such a thing in my childhood. And I don't think that supermarkets, when they arrived, stocked home brands. They were simply supplying a different method of shopping for the same goods that you bought before in a grocery store.
Then came the first home brand labels that generally were very plainly packaged (some still are - it's a point of difference) and whose primary selling point was price. They were much cheaper than the brands and were generally for basic things like sugar, flour, bread, baked beans, butter, milk. They still exist. Over time the ranges expanded as previously unknown items such as pasta and yoghurt became commonplace, but always these plain home brands had a bad reputation as being an inferior product.
Over time this perception changed a bit as occasionally home brand items tested by organisations such as Choice turned out to be just as good as their branded competition, and also people began to accept that with some things such as flour and sugar there was really not going to be that much difference anyway. They did not rely on secret formulae and ingredients like HP sauce, Tim Tams or Heinz baked beans.
I confess I haven't really done much research for this post. I'm relying mostly on memory. But I think the next stage was to release a home brand that was supposedly a degree better than the plain home brand. And this certainly still exists - an example is tinned tomatoes. 60c per tin on the left, 80c on the right. I doubt there is much difference.
The next step was to go gourmet. Coles Finest is what Coles calls their superior brands - like their Laurent Patissier bread, some cheeses, and other such products. Woolworths have a similar range - I have forgotten its name. I remember a pork and fennel salami being one of these. And some of these products have won prizes. So they should not be ignored.
Now though they are moving the Aldi way a little with an emphasis on particular corners of the market - most usually health food - Woolworths has MacroOrganics. You have to look very carefully to find the Woolworths name on these products. And Coles have just introduced Wellness Road. This ad in the latest Coles Magazine caught my eye - it was the black I think and it's what actually started me off on this article. The range is small as yet, but it includes things like flaxseed oil and tiger nut flour, and doubtless they will all be found in the ever expanding health food aisle.
It's the only Coles ad in their magazine - well the magazine is financed by the ads of their suppliers I'm sure. They advertise themselves in lots of other insidious ways within the magazine itself.
Woolworths also has only one Woolworths ad - and theirs is made to look like a recipe page. This one is not introducing a new range though. It is just confirming what wonderful home brand products they have and what wonderful things you can do with them.
I do buy home brand products - in Aldi if you buy anything you are buying a home brand. In the big two supermarkets I buy things that are unlikely to be different from the branded versions - like the tinned tomatoes and sugar. Some home brand products I buy because I actually think they are better - the Laurent bread is superb, their vintage black label cheddar is really, really nice and there are probably a few other things too. I think there is an award winning ice cream somewhere.
Everyone is up in arms about home brands and the demise of Australian brands, and how suppliers are being squeezed, and yet there are also lots of articles saying that Woolworths and Coles are not doing well with their home brands and have abandoned some of them. So who to believe, and where to next?
"Consumers still use brands to shortcut and automate decision making." Troy McKinna - Mumbrella
