What’s in a name? A lot actually. Especially when it comes to store brand versus branded groceries.
When shopping, we often choose certain brands simply because of the name on the packaging – and the reputation that comes with it – thanks to clever advertising.
We buy Bounty paper towels because they’re “the faster picker-upper” and Frosted Flakes because “they’re gr-r-reat.”
But on the shelves next to those items you can often find a comparable store-brand version that costs less – sometimes significantly less.
So what’s better: the name brand or the off-brand? Let’s dive in to find out.
Are store brands really as good as name brands?
No, not always! Often, store brands use the same formula as well-known brands, but may sell them at a lower price due to the quality of the ingredients or materials used to manufacture that formula.
Other times, a store brand will be a knockoff of a completely different company or company, which aims to replicate the name brand – and comes pretty close.
Still other times it’s the exact same product with a different label on it. In these cases, the store brand is actually just as good as the name brand.
Even if the store’s brand isn’t always technically “that good,” you’ll find it’s close enough for your taste.
Much of the judgment is subjective. There’s trial and error involved, and in some cases you might end up going right back to the premium paper towels after trying the generic version because you find that Bounty really picks up more and faster.
Why Store Brands Cost Less (and How They Keep Prices Low)
Often, store brands keep costs lower by using lower quality ingredients or materials to make the product. In some cases, they work with the people who already produce the product to put a store brand label on it so they don’t have to incur all the costs of setting up their own production facilities.
This helps the store provide price segmentation.
The idea behind price segmentation is that some people will be brand loyal and pay the higher price anyway. Overall, you can make more profit from these customers, even if you pay a little more for higher quality ingredients and incur the costs of a larger marketing budget.
But what about the people who only buy when the product is more affordable? That’s where the store brand comes into the picture.
By offering similar products at different price points, you attract a larger share of potential buyers. When done in large quantities, this strategy can help you earn more profit, even if the private label product brings the store less profit per unit.
Other ways to save on groceries and household items
There are other ways to stretch your grocery budget than just buying store brand products. An app called Upside down can help you earn real money back when you go to the grocery store, eat out or fill your gas tank.
With Upside, you can earn cash back offers at thousands of restaurants and grocery stores, making your daily expenses even more manageable.
And if you ever buy groceries or household items online, you can use these Capital one shopping to find out if you are paying too much. Just add it to your browser for free and before you checkout it will check other websites to see if your item is available cheaper.
Stock branded products that almost always win
To get an idea of which store brand products are preferred over others, we turned to Penny Hoarders.
One said she always had a taste for Jif smooth peanut butter, but was sold when she tried her store’s own organic smooth peanut butter, which cost less than $2. She described it as ‘good, if not better’.
Her opinion follows. Peanut butter is a food in America that has a ‘Standard of Identity’ (SOI). This means that before it hits the shelves, it must meet certain requirements FDA statistics.
Peanut butter in particular has specific metrics with high percentages that make most brands relatively consistent. The peanut butter must be made from 90% peanuts with a fat content of no more than 55% to reach U.S. shelves.
If a food has an SOI, it is likely more difficult to distinguish the brand name from the store brand. Here are some other foods that have STIs, although it is hardly an exhaustive list:
- Milk and cheese
- Lots of bread products
- Milk chocolate
- Canned and frozen vegetables
- Noodles and macaroni
- Ice cream and sorbet
However, it goes beyond just food products.
For example, Penny Hoarder Jobelle Collie said she favors Dove soap, Olay moisturizer and Palmolive green dish soap, but buys regular trash bags and office supplies. That makes sense to this writer: a number two pencil is a number two pencil, even if it doesn’t say BIC on the side.
One of the best store brand products out there are Kirkland batteries. In 2016, Duracell managed to produce this Costco brand, and since then many consumer tests show that Kirkland performs just as well as the brand.
Whether or not they are made with the exact same materials has not been officially confirmed. But since the performance is just as good, that technical aspect may not matter much.
Branded items that are usually worth the splurge
Jobelle was not alone. We found that among our community members, the most persistent item they wanted to buy was their brand name beauty products. While sometimes there is a rogue store brand product that really works just as well as the brand name and contains the same ingredients, overall we think this is a wise move.
While trash bags and notebooks may not be too dangerous to your health, anything you put on your skin can be absorbed into your bloodstream.
It feels okay to want higher quality materials in these cases. (This is also why you should.) be careful about buying beauty products from online retailers, where standards are not always as strict as in a physical store.)
Other brand name preferences are likely individual and subjective. If you have a picky eater, they might be able to tell the difference between cookies made with Great Value flour and a gold medal. Store brand Coke may be fine for some people, but others will cringe at anything other than Coke.
Regional preferences also exist. Ketchup is a good example. It’s technically an FDA SOI product, but if you give anyone in Pittsburgh the store brand (or worse, Hunt’s), they’ll send you to the hills.
In the Golden Triangle it’s Heinz or bust, and the regional palate can tell the difference.
Tips for Deciding on Store Brand vs. Brand Name
There are some products – like Kirkland batteries and staples like milk or salt – that really don’t justify spending on brand names.
But for many other items on your shopping list, you’ll have to prioritize within your own budget based on your own tastes. If you really want the brand name shampoo, you might be able to get by with fake plastic bags.
If you prioritize your ketchup spending, you might want to buy a store brand tomato sauce and add some herbs and spices while you’re cooking it since you’re not that picky when it comes to spaghetti night.
You should also take into account the actual price differences in combination with coupons. At Publix, the difference between the store brand and Jif was just $0.07 when we compared in St. Petersburg, Florida. But at Walmart? The price difference was $0.92.
Some store brands will save you a lot more money than others. If you have a coupon that ends up getting you $0.50 off Jif, that would end up being cheaper than the store brand Publix, but not Walmart.
Smart shopping isn’t about labels
Ultimately, shopping store brands versus branded products in a given category doesn’t make you a better person or a smarter shopper. A lot depends on preferences.
Because while some products, like Kirkland batteries, may be identical to the name brand, downgrading yourself from one brand to another often means sacrificing a bit of quality.
It’s all about trial and error to figure out where that sacrifice is worth it for you and your family, depending on your budget.
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