Brand Names Singing Blues Tide Turns to Store Labels Instead of Consumer Giants

By Heather Pauly and Adam Levy 1993, Bloomberg Business News | St Louis Post-Dispatch (MO), August 26, 1993 | Go to article overview

Brand Names Singing Blues Tide Turns to Store Labels Instead of Consumer Giants


Heather Pauly and Adam Levy 1993, Bloomberg Business News, St Louis Post-Dispatch (MO)


Supermarket shopping isn't fun for a lot of consumers these days.

Just ask Natalie Cruz. As the 32-year-old chambermaid pushes her overflowing shopping basket in front of the creamed corn section at Cub Foods in Atlanta, she is bombarded with a perplexing array of products. Some of them have familiar brand names, like Libby's, Del Monte, Stokely, and Green Giant - and painfully high prices.

"I'm on a limited budget and I have four growing boys to feed," Cruz says.

So she reaches for the Shoppers Value store brand - the supermarket's so-called private label - and buys eight cans. The choice is simple: Shoppers Value creamed corn costs about 35 cents a can, compared with 41 cents for the brand names.

"I can't afford to spend extra nickels and dimes to get fancy brands," Cruz says.

More and more shoppers are reaching the same conclusion these days and that adds up to big trouble for consumer products giants. For years, sales and earnings climbed steadily for companies like Procter & Gamble Co., Colgate-Palmolive Co., Philip Morris Cos. Inc. and Kellogg Co. as numerous products became instant cash cows - and remained that way. But recently, a sour economy as well as smarter and more gutsy consumers have made the going much tougher.

"Brands are vulnerable like never before," said Renee Frengut, president of Market Insights, a consumer marketing group.

That was hardly the case even a few years ago. Until that time, household names like Tide, Charmin, Crest and Coke had a stranglehold on consumers, who were short on choices and developed a lasting loyalty for the brand of detergents, toilet paper, toothpaste and soda they bought.

Much of this allegiance was carefully built in the early 1950s when the consumer products companies quickly adopted the new medium of television as the prime avenue to promote their products. With TV such a big draw, many consumers automatically linked their favorite shows with the sponsors, and bought the products dutifully.

In the past decade, such blind loyalty has withered - and much of the fault lies with the consumer products companies themselves. Since 1984, an all-out product war more than doubled the number of items on store shelves as companies, faced with higher production, labor, and development costs, ratcheted up their efforts to lure consumers.

Newer and newer versions of old favorites were introduced. Take Tide, for example. From the introduction of the popular detergent in 1947 to about 1984, only one version of Tide was sold. Today, there are six versions, including Tide with bleach powder and Tide Free, without perfume or dyes.

The product explosion got so wild that some consumer goods makers actually had lines competing against each other. P&G, with 100 different U.S. brands, was particularly guilty of this. In one case, TV ads for its Puritan canola cooking oil indirectly slammed another P&G product, Crisco oil without canola, by stressing the health benefits of low saturated fat. Eventually, P&G had to combine the two into Crisco/Puritan canola oil.

Meanwhile, consumer giants continued to raise prices on many of their brand names.

The combined effect was exactly what the consumer products companies didn't want. …

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