April 14, 2022
If you have shopped lately at a supermarket, big-box store or online retailer, then you’ve seen — and perhaps purchased — private label products. Such products are goods made by one company to be sold and branded by another. Private labels may be store or independent brands made specifically to compete with national name brand products. Such private label products often resemble name brand products both in content and appearance. Examples found in stores include food, clothing, furniture or jewelry. Other private label products may be made and sold to various sellers. These tend to be mass-use products meant to be sold cheaply and in quantity. Examples include beauty and pharmaceutical products, home decor, reusable bags and water bottles.
Private labels are not new. The selling of store brand or “generic” products was strong enough for the non-profit Private Label Manufacturers Association (PLMA) to be founded in 1979. And private labels truly emerged on the scene in the 1980s, particularly in supermarkets where blandly packaged products stood starkly against the bright colors of national brands. Since then, private labels have become flashier and steadily taken a larger chunk of the overall market share. According to the marketing research company BCG, private label products account for 18% of all consumer packaged goods sales in the United States, and 31% of such sales in Europe.
Why are private label products popular?
For retailers, private label goods are popular because their production can be optimized to suit consumer demand. Retailers can reduce advertising costs and have better control over the supply chain. Private label goods also often cost less to manufacture and transport, allowing retailers to pass the savings on to consumers.
And those savings make private label products popular with consumers. People are drawn to private labels because they offer quality products at competitive prices. Private labels are often less expensive than national brands, and the products are often so similar as to be almost indistinguishable — without the branding and packaging, of course. Standing in a supermarket aisle or comparing goods online, consumers can put a private label up against a national brand and see what’s different — and what’s not. Many consumers will try a private label product after having loyally purchased a name brand product in the past. And, if the consumer is satisfied, they will buy the private label again because it is a better value. (The word value, by the way, is commonly found in private label names, as are the terms essential, fresh, organic and select.)
Another factor in private label popularity has been the COVID-19 pandemic, which began in early 2020. Historically, private label brands sales have risen during challenging economic times. The pandemic forced economic shutdowns that closed stores and jobs disappeared across nearly all industries. Resulting consumer panic created a scarcity of goods, private label or otherwise. Many stores began stocking more private label goods simply out of necessity as shelves — both literal and virtual — emptied faster than stores could restock them. Consumers zeroed in on two main factors during the pandemic: availability and low price. The availability factor helped private label sales, but it also helped sales of all kinds, including name brands. Consumers simply bought what was there. If they had a choice, however, between products of similar make and quality, then lower price generally won out — and private label goods are almost always more economical than national brands.
Should private label products be tested and certified?
As the COVID-19 pandemic begins to ebb, many retailers now are looking for ways to turn the buying enthusiasm of a short-lived boom into long-term customer loyalty. To do this, retailers may focus on brand awareness and customer perceptions, but product quality is top priority. Retailers are providing more details about ingredients and the origins and sources of their private label goods. Importantly, retailers are also turning to third-party accredited certification companies — such as UL — to make sure their products comply with industry and individual store standards.
Just like name brand goods, many private label products require testing and Good Manufacturing Practices (GMP) compliance certification before they can be sold in North America and other markets. Whatever the private label product, certification shows the retailer’s dedication to meeting and maintaining standards, upholding professional values and following an accepted body of knowledge. Testing and certification help build customer trust and loyalty. They may also enhance your product’s reputation and give it a competitive edge in the marketplace.
In addition, testing and certification can help mitigate certain risks that come with the creation and selling of private label products. With name brand and other products, the seller may pass along some risk and responsibility to the manufacturer. But because the seller essentially is the manufacturer of private label products, they take on extra risks regarding:
- Intellectual property rights
- Liability exposure
- Quality control
- Recall responsibility
By having a third-party thoroughly test, inspect and certify your products, you may lessen the risks that come with the creation and selling of your private label products.
How can UL’s private label services help you?
UL offers solutions to help your private label brands compete with national brands and increase customer brand loyalty. UL’s private label testing and analysis services can help you and your suppliers comply with national and international safety and quality regulations. Our industry knowledge and expertise can help you improve your consumer product experience, achieve higher ratings on your products, manage quality and product development costs and stand out amongst competitors. UL can conduct these services across various product types, including dietary supplements, personal care and beauty products, over-the-counter drugs, pharmaceuticals, household chemicals and consumables.
UL’s private brand solutions support brand innovation while helping you drive differentiation, results and cost savings. UL helps you develop products that are national brand comparable, national brand equivalent or “better than” the national brand to meet and exceed your customers’ expectations. Our U.S. Food and Drug Administration (FDA) registered laboratories have full analytical, microbiological, physical, shelf-life and performance testing capabilities. UL private label products solutions include:
- Claims substantiation
- Consumer studies and focus groups
- Label reviews
- Performance and sensory testing
- Product specification and protocol development
- Quality and regulatory compliance testing
- Shelf-life and stability
- Sustainable solutions for products and packaging
For retailers to remain comprehensively compliant, they can trust UL for audits and certifications. Our global team can audit and certify facilities for:
- Good Manufacturing Practices (GMP) audits
- 21-CFR and ANSI-455 standards
- GRMA audits
- SSCI audits
- Corrective and Preventive Actions (CAPA) management
At UL, our product testing team will work with you every step of the way from concept to completion. Learn more about how our services for your private labels products can position your products competitively in the marketplace and reduce the risk of lawsuits, recalls, and returns.
Private label product testing helps establish quality in the marketplace
More and more retailers are taking advantage of changes in consumer attitude towards private labels by either launching a private label or extending current offerings through category expansion.