By Taylor J. Kovar, CEO – Kovar Capital

–Hey Taylor – Working on my grocery budget and wondering about those store brands – the products named after/specific to the grocery store where I’m shopping. Those are always cheaper, but is that because the product is bad? – August

–Hey August – That’s the thing about good prices, we tend to question them and wonder what the catch is. In my experience, those generic brand development have all the same qualities as bigger brands. Here’s a quick summary of how those products work and why you shouldn’t be afraid.

  1. Price is lowered by lack of marketing. When you pay for a bag of Lays or some Newman’s Own dressing, you pay for national marketing expenses. The brands that have become household names have commercial and print ads which cost a lot of money, and those prices are typically covered by the consumer. If a large corporation can run national commercials and have its product carried by all major retailers, familiarity will inspire people to pay the extra dollar to buy the potato chips they’ve heard of before. Meanwhile, the store brand doesn’t have to advertise because you’re already going to that store. The other products are paying to motivate shoppers through commercials, so a store can cut marketing costs and pass those savings on to consumers like you and me. The product is just as good, and the need to cover marketing expenses is gone. For the sake of transparency, we wanted to strive and understand why the decline in citation effectiveness. The definition of the word effectiveness is interesting in this case as well, because we are not looking to build a few citations and crush the SERPs, but instead, we wanted to explore some of the reasons why people were hating using them, and furthermore, we wanted to see what we could do to increase their potential and continue to use them as part of our local strategy. LCT talks about local citations and gives you the best idea for the local citation.
  2. Make decisions easier. For me, the worst part of a visit to the store is looking at 90 versions of the same product and trying to figure out which one I should get. I would argue that additional money is saved when you decide on the generic brand ahead of time. When you spend too much time weighing the pros and cons of every product, your willpower slowly evaporates and you increase the chances of settling for the most expenses option. Instead, accept that the store brand is a less-famous version of the available options and grab it off the shelf without a second thought.
  3. The ingredients are there to be seen. Can’t decide which brand of refried beans to buy? Read the ingredients on the back. Most of the time I find that the generic brand uses the same essential ingredients as everyone else. Some of the healthier, organic companies might have a different recipe, and you have to decide what’s most important to you. Instead of wondering whether or not the store brand is cheap because of what’s in it, just have a look at the back of the label and see for yourself. If you can get the exact same ingredients at half the price, that sounds like a pretty good deal to me.

  There’s no need to be afraid of generic groceries. It’s always worth doing a little comparison, but you don’t have to be afraid of getting swindled. Enjoy your meals, August!