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Why Target can sell Ice Cream

August 10, 2009

I don’t know where AdAge got this number, but apparently 52% of people plan to buy private labels this year in an effort to save money.

While that number seems a bit high, at this point, certain retailers have built their private labels into immensely strong brands, and it has nothing to do with the value proposition generally associated with private labels.

In fact, Private Labels are boldly going where no store brand has gone before. Spending money on packaging and promotion, instead of just placing a huge “SALE” tag on the bottle.

I’ll never forget the time my mom purchased Star’s and Stripes soda. It came in a green can, it tasted like Lemon Lime, but it was definitely NOT Sierra Mist.

And that has always been the problem with private label. It’s fine to buy Safeway Brand plain yogurt, or plain butter, because really, who cares.

But what about branded institutions, like Tide, Dreyer’s Ice Cream, or Girl Scout cookies? According to AdAge, Walmart has already taken aim at the  Girl Scout cookies: http://adage.com/article?article_id=138272.

Meanwhile, Proctor and Gamble, (makers of Tide) have taken aim at Tide by releasing a value brand extension called Tide Basic.

And then there’s my personal favorite private labeler, Target.

First, what the Target brands do is effectively copy what makes branded products great. They have attractive packaging, and they provide innovative flavors.

Target's Archer Farms Ice Cream combines attractive packaging with innovative flavors

Target's Archer Farms Ice Cream combines attractive packaging with innovative flavors

In the old days, like with Stars and Stripes cola, the private label just blatantly ripped off “The Real Thing” and then sold the knock-off for 20-30% less.

Now, the knock-off is still 20-30% less, but it’s also attacking the real brand. I don’t think Breyer’s has Sea Salt Pretzel Caramel, and that sounds interesting to me. Oh, and I’m saving a dollar? Sweet.

Now, I will say that this works better for products that are weakly branded. Many people will buy private label Eggs, yogurt, etc. Still, they are buying brand name products in soup, drinks, etc.

The only fascinating aspect is the shelf space retailers are giving their private labels. In certain product categories, retailers are giving their own brands similar space to the big boys. And some other retailers are cultivating smaller brands like Keurig and Method Soaps, building them into institutions that are synonmous with that retailer.

Now, if you’ll excuse me, I’m going to try ice cream with Sea Salt.

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