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Private label dairy is big business, perennially posing strong competition to national brands, with milk alone garnering over $8 billion in sales each year. Private label refrigerated whole milk rose less than one percent to more than $2 billion, while refrigerated skim/lowfat milk dropped over one percent to more than $6 billion, according to SymphonyIRI Group data for the latest 52 weeks ending September 8, 2013. Private label refrigerated yogurt went up five percent to $673 million, and private label refrigerated coffee creamer went up eight percent to $172 million. Private label natural shredded cheese rose more than one percent to more than $2 billion, with a 22 percent share of the category.
PLBuyer sent four of its secret shoppers to check out dairy products at a Price Chopper in Kansas City, Mo.; a Fry’s Food Stores shop in Mesa, Ariz., part of the Kroger banner; a Walmart Supercenter in Colorado Springs, Colo.; a Giant Eagle in North Royalton, Ohio; and an Ingles Markets store in Asheville, N.C. As usual, we asked them to evaluate how their local retailers were marketing and merchandising their dairy products.
In addition to looking for in-store promotions and advertising, shoppers recorded prices of comparable private label and national brand milk, shredded cheese, yogurt and creamer. They then conducted their own product tests in one of these categories. Here, we provide you with our gathered insight.
Side by Side
This month, all five of the secret shoppers reported seeing private label dairy products shelved side-by-side with national brands, yet only Bill K. at Ingles Markets saw shelf tags pointing out price comparisons. However, Michael G. reported that milk cartons at Price Chopper included a code indicating where the milk was bottled.
“Comparing all the skim milk in one-gallon jugs, I found all—including the store brand, Price Chopper—came from the same dairy: Roberts Dairy Co. in Kansas City,” said Michael. “Roberts milk is sold under that brand name in Kansas City, but not at this store.”
Bill at Ingles Markets and Sarah C. at Fry’s reported seeing in-store private label ads.
“This week, store brand cheese was on sale,” said Sarah. “They put weekly sale items in the cooler bins in the aisle making it easier to get. This is in addition to the cheese in the cooler that is located up against the wall.”
All secret shoppers reported that they buy private label milk, except for Bill who buys only private label cheese, yogurt and creamer. At Fry’s, Sarah reported a $2.12 difference between one gallon of Fry’s brand milk and Shamrock Farms milk. At Giant Eagle, Amy K. reported a $1.29 difference between Giant Eagle and Reiter brand milk. At a Walmart Supercenter, Christina R. reported shoppers will only save $0.24 on store brand Great Value milk over Viva, while Price Chopper had the smallest price differential, with Price Chopper milk saving just six cents over Hiland brand.
At Walmart, shoppers will save $0.80 when buying 32 oz. of Great Value French Vanilla creamer over the same-size Coffeemate French Vanilla creamer, the biggest difference reported. At Ingles Markets, Land O’Lakes Fat Free Half & Half retails for the same price as Laura Lynn Fat Free Half & Half, but the store brand was on sale, which saved shoppers $0.40.
In an unusual twist, national brand Yoplait Strawberry yogurt at Giant Eagle was priced at 20/$10 or $0.50 each, while Giant Eagle Strawberry yogurt was priced higher at $0.55 each for the same 6-oz. container. At Price Chopper, Michael reported he was unable to locate a store brand yogurt.
Again at Giant Eagle, private label dairy items were reportedly priced higher than national brands. The Giant Eagle Mild Cheddar Fancy Shredded cheese (8 oz.) was on sale at 2/$5.00, while Kraft Mild Cheddar Finely Shredded cheese (8 oz.) on sale at 5/$10, making the national brand $0.50 cheaper than the store brand. What’s more, they both carry the same regular retail price of $2.95.
Similarly, Bill said 8-oz. Laura Lynn Light yogurt was priced at 10/$5.00, while during his visit the same-size Yoplait Light was on sale for the same price.
At Fry’s, cheese shoppers will save $1.40 buying two cups of Kroger mild Cheddar cheese over national brand Sargento, but is this savings enough when it comes to the flavor of cheese?
“We like Sargento cheese—it has good flavor and texture,” said Sarah. “However, I often buy store brand cheese because of the price. I look for weekly ad prices for Sargento cheese and also for coupons, but price determines what I will buy for the week.”
Bill reported he thought the Laura Lynn Shredded Mild Cheddar cheese was just fine.
Amy tried the Giant Eagle milk, which is a usual purchase for her family. “I have been impressed with the quality and freshness of the product,” she said. “Milk is a staple in my house, and we have tried other store brand products and were not happy with taste of the milk.”
Likewise, Michael said the Price Chopper skim milk is his usual brand, since it’s usually a nickel a gallon cheaper and is bottled at the same dairy as most of the name brands. “I usually will purchase the store brand in the dairy category unless there is no alternative,” he said. “Save for special cheeses, dairy products differ little from name brands
Christina tried the large-size Great Value Vanilla yogurt and said it was not as sweet as the Dannon or the Yoplait. However, she liked this aspect since she adds frozen fruit and granola to it.
Pricing, marketing and merchandising all work together to get that store brand product into the shopping cart. After that point, repeat product purchase hinges almost 100 percent on how satisfied consumers are with product performance at home, in real-world, everyday use—a vital piece to the private brand strategy.