A Strong Brand is your Best Defence

Incumbent alcohol producers in Ontario are worried about allowing store-brand booze sales, fearing that doing so will hurt their business.

To that, I say this: Welcome to the wonderful world of retail!

According to the CBC, "Ontario alcohol producers are pressuring the Ford government not to allow supermarket chains to sell their own private-label wine and beer, saying it would hurt local businesses."

The article also says the group is arguing that "Should private-label booze products be allowed... [Small, independent producers and retailers] will be put at an unfair disadvantage."

These Ontario alcohol producers are absolutely correct: allowing supermarket chains to sell private-label booze WILL hurt their business, and WILL put them at a disadvantage.

Once again... welcome to the wonderful world of retail!

Here's the thing: thousands of consumer packaged goods sold in supermarket chains today have to compete with store brand competitors.

Those national brands are often at "an unfair disadvantage" to private label alternatives that are often less expensive and, increasingly, just as good.

Not only that, but store brands also often get favourable shelf placement, a greater share-of-shelf than they deserve, and better in-store visibility.

And yet...

... those thousands of national brands are still around. Still thriving, even.

Look in your cupboards. Are they 100% filled with private label goods?

I highly doubt it.

Because the national brands we know and love have spent decades investing in brand-building, distribution, and product innovation.

Here's a delicious example: At the time of this writing, you can buy a Great Value Chocolate & Vanilla Creme 300g bag of cookies at Walmart for $2.77.

This bag of Walmart's private label cookies looks suspiciously similar to the OREO 270g bag of cookies, except for the price: the OREO cookies are sold for $3.48.

That's $0.71 more... for 30 fewer grams of chocolately-vanilla goodness!

So why would anybody choose to buy OREOs in a world where the less-expensive "Great Value" alternative is readily available?

Because OREO-eaters LOVE OREOS!

Even in these difficult economic times, as people continue to look for ways to lower their grocery bills, they'll think twice before giving up their favourite brands.

Beloved brands can continue to thrive.

And a strong brand is your best defence against private label alternatives.

The brands people are indifferent about?

Those are the sales that will be easily lost to store brands.

To those alcohol producers currently worried about competition from retailers:

You SHOULD be worried!

But the solution isn't to complain to the government and ask them to continue protecting you from competition.

It's to double down on your brands, ensuring you're developing and distributing products that your consumers LOVE...

... and won't willingly give up for store brand alternatives.

Because if you don't?

The savings available with private label brands start to look delicious.