If you could look at my food pantry right now, you wouldn’t recognize many of the brand names. Instead, you’d see lots of cans and boxes that bear the names of Shop-Rite, Trader Joe’s, and Market Pantry (one of the many house brands at the discount grocery store Aldi).
Buying store-brand products is a great way to save money on groceries. They’re nearly always cheaper than name brands, and in many cases, they’re equal in quality. According to Consumer Reports, 22% of shoppers even choose which supermarkets to shop at partly because of the quality of their store brands.
However, not all store brands are created equal. Some of them match or exceed leading name brands in flavor and performance, while others simply don’t measure up. To get the best overall value, it helps to know when store brands are truly bargains and when name brands are worth the extra money.
Store brands, also known as house brands or private label brands, are not manufactured by the stores that sell them. Instead, food companies make these products, sell them to stores at a low cost, and allow stores to put their own labels on them.
Some store brands, such as some of the products found at Trader Joe’s, come from small food producers that can’t easily market their products on their own. For these companies, converting their products into private label brands is the easiest way to get them into stores. However, most private label brands are made by the same large companies that produce leading name brands. Offering up their products as store brands allows them to put their manufacturing capacity to good use and earn extra money.
Store brands are cheaper than name brands for two reasons:
- No Development Costs. Food companies have to spend money on researching and developing their products. They have to test different recipes and hire focus groups until they find a formula that customers like. Store brands don’t have these costs because they simply stick a new label on a product that’s already been developed.
- Lower Marketing Costs. Big name brands also spend a lot of money on advertising and promotion. It’s very costly to turn a brand into a household name and to persuade people to choose it over other brands. Store brands avoid these costs because every product they sell carries the same label. They can focus on marketing the store itself, rather than pay separately to advertise each individual product in their line.
Burt Flickinger III, a retail consultant interviewed by Consumer Reports, notes that store brands are generally at least 20% to 25% cheaper than comparable name brands. On top of that, many stores back up their house brands with a money-back guarantee. If you buy the store brand and find it disappointing, the store will refund your money with no questions asked. In fact, stores like Hannaford and Giant Eagle offer to pay double your money back if you aren’t satisfied with their store brands.
Pro tip: Before your next grocery shopping trip, make sure you download the Ibotta app. You will be able to earn cash back on select items and they will even give you a $20 bonus just for signing up. Read our Ibotta review to learn more.
Woochoel Shin, a professor of marketing at the University of Florida who studies store brands, says they tend to get a bad rap. His studies have found that they often provide name brand quality at a lower price, yet many consumers see them as inferior. He believes the problem stems from the 1980s when many of today’s shoppers were growing up. At the time, many store brand items were low quality compared to brand names and received a bad reputation as a result.
But in the 30 years since, stores have expanded and upgraded their private label offerings. Shin notes that many stores now offer multiple house brands, such as a basic brand and a higher-end version that competes with premium national brands. In 2012, Consumer Reports found that 74% of consumers described themselves as highly satisfied with their supermarket’s house brands.
In blind taste tests at Consumer Reports in 2012, more than 50% of store brands matched or beat the quality of national brands. In fact, some store brand products are literally the same as name brands, except for the label — and the price tag. A careful analysis by Eater in 2017 revealed that several products sold under Trader Joe’s private label were identical to products from high-end brands, including Wonderful Pistachios, Stacy’s Simply Naked Pita Chips, and Snack Factory’s dark chocolate pretzel crisps.
Yet despite these findings, many consumers still shy away from store brands. According to Shin, when consumers know they’re tasting a store brand, they tend to rate it lower than a name brand, even though they often prefer the store brands in blind tests.
How to Choose
Of course, store brands don’t always beat name brands in tests. Some store brands aren’t as good, but they still manage to deliver acceptable quality at a much lower price. And a few are so bad they’re simply not worth buying, no matter how cheap they are.
The trick to saving money without sacrificing quality is to choose only the best store brands — the ones that can hold their own against the national brands. Here’s what shopping experts have to say about how private label brands stack up against name brands in multiple categories.
Breakfast cereal is one of the products that gave store brands their bad image. Bankrate quotes author Toni House as saying the off-brand cereals she tried as a kid were “like eating Styrofoam.”
But a lot has changed. In a 2013 cereal test at Consumer Reports, two store brand options — Market Pantry Frosted Shredded Wheat from Target and Great Value Raisin Bran from Walmart — received very good ratings for both taste and nutrition.
If you prefer sugary cereals, the taste differences are typically more noticeable. In a blind taste test at Spoon University, four different kinds of sugary cereal from Walmart’s Great Value brand got the thumbs down from students. In a similar test at Thrillist, testers said four out of six of Shop-Rite’s sweet cereals were blander and less appealing than the name brands. On the other hand, when personal finance blogger Len Penzo asked kids to compare six different kinds of Hannaford sweet cereals to the name brands, they liked them about the same.
If you’re able to find a store brand cereal you like, you can save big. At Walmart, Kellogg’s and General Mills cereals cost anywhere from $0.15 to a whopping $0.30 per ounce, while Great Value cereals typically cost between $0.07 and $0.19 per ounce. That’s a savings of up to 53%.
Shopping experts interviewed by Bankrate say store brand cleaning products often lack the oomph of their name brand rivals. Teri Gault, the creator of the former coupon site The Grocery Game, says store brand products often seem to be “watered down.” House and Monica Knight of the coupon site Fabulessly Frugal add that off-brand laundry soaps, in particular, don’t clean as well as name brand soaps.
However, Knight says there’s an exception to this rule: Kirkland brand laundry soap from Costco. A Consumer Reports test confirms that Kirkland’s detergent effectively cleans and also suggests Member’s Mark brand from Sam’s Club. These store brands don’t match the performance of the leading brands Persil and Tide, but both “do a very good job” for about half the price.
Some shopping experts are passionately loyal to particular name brands of condiments. For instance, Jeff Yeager, who writes under the name “The Ultimate Cheapskate,” tells Bankrate he chooses store brands for nearly everything, but he won’t buy any cream cheese other than the Philadelphia brand.
However, in Consumer Reports tests, store brand condiments actually do surprisingly well. Here are some examples:
- Ketchup. Many staffers at Consumer Reports declared themselves loyal to Heinz ketchup. But when it went up against Target’s Market Pantry brand in a head-to-head test, 45% of staffers actually preferred the store brand, which costs less than half as much on Target’s website. And in another test comparing store brands, testers found the Target brand surprisingly similar to Heinz.
- Mayonnaise. Hellmann’s mayonnaise was also popular at Consumer Reports. But in the head-to-head test, many of them found it hard to distinguish from Target’s Market Pantry version, which costs about 65% as much. The other test of store brands found that although the Market Pantry mayo didn’t taste the same as Hellmann’s, it was just as good, and so were the store brands from Whole Foods, Costco, and Walmart.
- Salad Dressing. House says she finds most store-brand salad dressings, particularly ranch and zesty Italian, can’t compare with top national brands. But in another Consumer Reports test, Target’s Market Pantry ranch dressing was rated as equal to Hidden Valley’s. In a separate salad dressing test, two ranch dressings from Walmart — both priced around $0.10 per serving — were credited as Best Buys.
The bottom line is: If you don’t like one store brand, it’s worth trying others. Some of them are definitely inferior to the name brands, but others are as just as good and quite a bit cheaper. Even Yeager, who finds most store brand peanut butter “gritty,” says he likes the Walmart brand.
Experts generally agree that when it comes to over-the-counter (OTC) drugs, it makes sense to buy generic. The Food and Drug Administration (FDA) requires all generic drugs — prescription and OTC — to contain the same active ingredients as their name-brand equivalents. The no-name brands must meet the same standards for “quality, strength, purity, and stability.” The FDA inspects facilities that make generic drugs to ensure their manufacturing, testing, and packaging meet regulation standards.
That means if you’re used to taking a name brand medicine, you can get the same effect for less by switching to a store brand equivalent. All you have to do is compare packages of name brand and generic drugs to see which ones have the same active ingredients. Most stores make this easy for you by putting their store brand next to the name brand, or even by writing on the front, “Same active ingredient as” a popular name brand.
Here’s how much you can save by switching to a store brand medicine:
- Painkillers. At Walmart, 200 tablets of Advil cost $14.97, more than $0.07 per pill. You can buy 200 tablets of Walmart’s Equate brand ibuprofen for $7.72, less than $0.04 per pill. That’s a savings of over 50%.
- Allergy Tablets. Walmart charges $69.99 for 140 tablets of the brand Zyrtec, or roughly $0.50 per pill. Equate tablets containing the same active ingredient (cetirizine) costs $32.97 for 300 tablets, or around $0.11 per pill — less than one-quarter the price.
- Antacids. Tums antacids cost a little less than $0.05 per pill at Walmart. Equate calcium antacids cost roughly half as much.
Experts disagree about whether it makes sense to spring for the name brand in paper products. Gault says store brand toilet paper is often “flimsy and coarse,” and paper towels fall apart faster. However, the last time Consumer Reports tested paper towels, it found several store brands with “impressive absorbency, scrubbing, and strength at a good price.”
If you’re able to find a brand of acceptable quality, the savings on store-brand paper products can be pretty good. Here’s how the prices compare at Walmart:
- Paper Towels. Bounty Select-a-Size paper towels cost $14.97 for six triple rolls, while the store’s own Great Value brand costs $11.88. That’s a savings of only 21%.
- Toilet Paper. Charmin Ultra Soft costs $0.038 per square foot. Great Value Everyday Soft toilet paper costs $0.014 per square foot — less than half as much.
However, experts point out that the savings aren’t as good if you end up using more sheets of the flimsier toilet paper or paper towels to get the job done. If it takes twice as many sheets of the store brand towel to clean up each spill, the name brand costs less in the long run.
Plastic Bags & Wraps
Yeager says he won’t buy store brand plastic products. The off-brand plastic wrap “just doesn’t stick,” he says, and the garbage bags are more likely to break.
However, Target shoppers disagree. They think the store’s Up&Up brand plastic products are usually at least as good as name brands and significantly cheaper. Here’s how the prices for plastic products stack up:
- Plastic Wrap. Target charges $4.59 for 400 square feet of Glad Cling-Wrap and $3.69 for 400 square feet of its Up&Up brand, a 20% savings. Moreover, shoppers give the Up&Up wrap an overall rating of 3.6 stars out of 5, while awarding Glad only 2.7 stars.
- Sandwich Bags. A box of 280 Ziploc sandwich bags costs $8.69 at Target. A box of 280 Up&Up double zipper sandwich bags costs $5.89. That’s a savings of 32%. On top of that, the store brand bags get a 4.5-star rating from users, while Ziploc bags earn only 3 stars.
- Trash Bags. A box of 60 Hefty kitchen bags with drawstring closures costs $9.99. Up&Up bags cost $16.99 for a box of 120, a savings of only 15%. Also, the Hefty bags get slightly better ratings from users than the Up&Up bags. So in this case, paying a little extra for the name brand could actually make sense.
Snack Foods & Soft Drinks
Many experts prefer to pay extra for name brand snack foods and soft drinks. Manufacturers of these products jealously guard their formulas, so store brand equivalents rarely taste exactly the same.
However, “different” doesn’t always mean “worse.” In blind taste tests, many store brands were deemed almost as good as, or even better than their name-brand equivalents. Here are some examples:
- Cola. House says “nothing compares to Coca-Cola,” but blind taste tests don’t back up this view. In a 2013 test at Thrillist, two store brand colas — Whole Foods’ 365 Everyday Value and Walgreens’ Nice! — came in ahead of Coke, although Pepsi was the actual winner.
- Cookies. Knight and Gault both say they steer clear of store-brand cookies. In particular, Gault says, “I haven’t really tasted a store brand that tastes like Oreos.” Blind taste tests at The Penny Hoarder and Serious Eats agree, with testers consistently preferring Oreos to every other brand. However, Walmart’s Great Value sandwich cookies came in second in both tests and nearly beat Oreos for the win at Serious Eats — and they cost nearly 40% less.
- Crackers. Consumer Reports tested Dollar General’s brand of cheese crackers against Sunshine’s Cheez-Its, and the result was a tie.
- Ice Cream. Ice cream is another product Knight refuses to buy generic. However, Consumer Reports found that Great Value vanilla ice cream from Walmart “came pretty close” to Breyer’s — and it cost 33% less.
- Potato Chips. House avoids private label potato chips, saying they “seem to have a more greasy, oily, rancid taste.” However, blind taste tests don’t all agree on this point. Trader Joe’s Ode to the Classic Potato Chip comes in dead last in a test at Serious Eats, where testers describe them as “stale” and “cardboard” — but they take the prize in a test at Epicurious, winning praise for their light, crunchy texture and moderate saltiness. In other tests at The Daily Meal and Kitchn, they fall in the middle of the pack and are half the price of top brands like Lay’s and Utz.
Going generic definitely makes sense for staple foods like salt, sugar, flour, vinegar, and baking soda. These products contain only one ingredient, so there’s no difference in the formula from one brand to another. In fact, staple products like these often come from the same manufacturers as the name brand, so they’re literally identical.
People who really know and care about food agree that store brands are the best choice for staple foods. A 2015 study by scholars at the University of Chicago and Brown University found that professional chefs are more likely to choose store brands for their “pantry staples.” They make over 75% of their purchases in this category from store brands, while average consumers choose store brands only 60% of the time.
When I checked the prices of store brand pantry staples at Walmart, I discovered the amount you can save is highly variable:
- Flour. Gold Medal all-purpose flour costs $0.38 per pound. Great Value all-purpose flour costs $0.24 per pound, a savings of 37%.
- Sugar. You’ll also save with store brand sugar, but not nearly as much. Domino’s pure cane sugar costs $0.52 per pound, while Great Value costs $0.43 per pound, about 17% less.
- Vinegar. A quart of Heinz white vinegar costs $1.74, while a gallon of Great Value costs $0.82. That’s a savings of about 53%. This is an especially good deal if you clean with vinegar since you’ll go through it quickly.
- Cooking Oil. A 48-ounce bottle of Crisco canola oil costs $2.98, compared to $1.92 for a bottle of Great Value. That’s about 36% cheaper.
- Baking Soda. A 4-pound box of Arm & Hammer baking soda costs $2.48, while Walmart’s Great Value version costs $2.24. That’s a savings of less than 10%.
- Salt. Morton’s iodized salt costs $0.84 for a 26-ounce canister, while Great Value’s version costs only $0.40. That’s less than half as much — a truly great value.
Which Store Brands Are the Best
You may have noticed that in blind tests, there’s no rule of thumb for store brands. Some of them fare well against name brand products, while others score poorly in terms of taste, texture, or performance.
However, according to Consumer Reports, some store brands perform consistently better than others. If you’re looking for store brands that match the quality of national brands, three stores to consider are Trader Joe’s, Costco, and Central Market, a small subsidiary of H-E-B based in San Antonio, Texas. In a Consumer Reports’ test of grocery chains, these were the only stores to receive top marks for the quality of their private label brands.
In Consumer Reports’ survey, many Trader Joe’s shoppers were enthusiastic about specific products they can find only at this retailer. Fern Davis of Hartsdale, New York, listed half a dozen store brand products she seeks out at Trader Joe’s, including dried mangoes, refrigerated minestrone soup, and Jo-Jo cookies, an Oreo knockoff that’s a favorite with her kids. Rita Rogers of San Diego specifically mentioned Trader Joe’s barbecue sauce and salad dressings, which are made without high-fructose corn syrup. The quality of its house brands is one of the factors that made Trader Joe’s the top chain out of the 96 covered and the only one to earn an overall score of “Excellent.”
Costco shoppers also had high praise for its store brands. Davis says she loves Costco’s Greek yogurt, while she describes Kirkland Cashew Clusters as addictive. And shoppers in the San Antonio area flock to Central Market for its exclusive products, including small-batch ice cream in exotic flavors like whiskey honey and Saigon cinnamon. Consumer Reports quotes one visitor to the store’s Facebook page who said she was driving 30 miles just to pick up this treat.
However, even among the stores that aren’t top scorers, some store brand products do quite well in taste tests. As noted above, Target’s shredded wheat, ketchup, mayonnaise, and ranch dressing all stacked up well against leading brands. Similarly, Walmart got high marks for its vanilla ice cream, sandwich cookies, and raisin bran. Cola from Whole Foods and Walgreens scored better than Coke in tests, and Dollar General’s cheese crackers ranked exactly equal to Cheez-Its.
In short, even if your store doesn’t always have the best house brands, it’s still worth giving them a try. You might just hit on one of the few products that delivers brand-name quality at a much lower price.
There’s one other reason to choose name brands over store brands: sometimes, they’re actually cheaper. That’s because manufacturers of name brands often try to lure consumers by offering coupons for their brands, something store brands seldom do.
Having a coupon doesn’t automatically make the name brand a better deal. In many cases, even with coupon savings, the national brand can’t beat the price of the store brand. However, if you can manage to stack sales with coupons — that is, buy a product that’s on sale and use a coupon on top of that — you could pay less for the name brand.
Still, it takes a bit of work to find these kinds of double deals, and they’re not available all the time. Buying store brands, on the other hand, is easy. If you’re unsure about the quality of a store brand, it costs very little to try it, and you can always switch back if you don’t like it. If your store offers a money-back guarantee on its house brands, then there’s no risk at all.
Even if you don’t buy them, store brands can still save you money. As the University of Florida’s Shin points out, by offering a cheaper alternative, store brands “put more pressure on national brands to make a better product at a cheaper price.” In other words, even if you choose the Oreos, the fact that they’re sitting next to the store brand version on the shelf helps bring their price tag down.
When do you buy store brands at the supermarket? When do you avoid them?
Originally posted at https://www.moneycrashers.com/name-brand-vs-generic-products-grocery-store/