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September 14th, 2009

Do Store Brands Sacrifice Taste?

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Part of this blog’s goal is to offer our readers money-saving advice. When food prices began to rise significantly over a year ago, personal-finance experts across the board suggested dropping name-brand items for the store brands. If name brands are more expensive, why isn’t everyone buying store brands?

If it’s because of taste, a recent blind taste test conducted by Consumer Reports may change your thinking. Out of the 29 food categories that were compared, name and store brands tested equal 19 times, while store brands scored higher four times, and name brands six. On average, experts say that the store brands cost an average of 27% less.

Here’s an example of some of the test’s results:

Frozen lasagna

Stouffer’s, $1.44 per serving

Great Value (Walmart), 88 cents per serving

Winner: Tie
Stouffer’s cheese is more flavorful, and there are more flavors from herbs (though some taste dehydrated). Great Value lasagna tastes sweeter, and the pasta is firmer, a plus.

Salsa

Old El Paso Thick n’ Chunky Medium, 17 cents per serving

Kirkland Signature (Costco) Organic Medium, 10 cents per serving

Winner: Store brand
A chunky tomato salsa with crisp vegetable pieces, cumin, and smoky flavors, Kirkland is better overall: more complex, and just plain tastier. Old El Paso has stewed flavors, with onion and jalapeƱo pieces.

Note: For more product comparisons, you can check out the article on Yahoo. To read the complete results you’ll have to subscribe to ConsumerReports.com.

Why do name, or national, brands cost so much more? According to Consumer Reports, it has little to do with the ingredients — it’s the research, development, and marketing it takes to promote the products.

However, market research expert Harry Balzer says the name brands do hold onto one specific advantage:

As a result of that extra spending, national brands are more likely to have the latest in convenient packaging, and foods may have the newest tastes or be fortified with trendy supplements, says Harry Balzer, chief industry analyst for the NPD Group, a leading market research company. That’s the nationals’ main advantage.

When generic brands were first introduced in 1970’s, the packaging was unattractive and the taste was even worse. For years, sales of store brands went hand in hand with current economic conditions — sales were up during downturns and low during the good times. Yet, manufacturers say all those trends have changed:

“Store brands are here to stay,” [Jim Hertel, a managing partner with Willard Bishop Consulting, a food retail consultancy] says. Last year almost a quarter of all food and beverages served in U.S. homes were store brands, up 18 percent since 1999, according to a recent NPD Group study.

Increasingly, those brands go well beyond canned and frozen vegetables, dairy products, and paper goods. Publix puts its name on dozens of organic foods; Costco sells wine and champagne under its Kirkland Signature label. Even ShopRite, known more for low prices than fancy fare, offers a long list of imported foods, including roasted red peppers from Greece.

The stereotype that generic brands suffer from lower-quality ingredients is quickly fading. As long as stores like Costco continue to grow in popularity, so will their products. If money is tight, and we know it is, don’t be afraid to give store brands a chance — you may just like them better (you’ll certainly like having more cash in your pocket).

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2 Responses to “Do Store Brands Sacrifice Taste?”

  1. Lucia Says: September 14th, 2009 at 8:12 pm

    I always buy generic and/or the cheapest high-quality I can find. I don’t scrimp on important items like toilet paper or laundry soap, but many times will wait for sales and then buy them in bulk.

  2. Quoted – What’s for dinner? – Natural Food Merchandiser « Dr. Scott’s Cool Business Blog Says: October 4th, 2009 at 8:32 pm

    [...] Do Store Brands Sacrifice Taste? (hsh.com) Possibly related posts: (automatically generated)Uncle Matt named to Natural Foods Merchandiser’s 40 Under 40 listMore Pet Food Brands RecalledFood additives and ADHD, part 2Dancing to Evolution’s Tune [...]

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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