Picking up from from yesterday’s Part 1, let’s continue debunking common grocery shopping “hacks.” Again, the point isn’t to wag a finger at people who offer up the “hacks,” but to provide an alternate perspective, rooted in common sense, on how food shopping can be done smarter.

2. Ignore the flashy eye-level attraction: It is often said that big food brands pay retailers for prime eye-level shelf space to trick shoppers into buying the first thing they see. Customers are advised to skip the mid-level shelves and look elsewhere if they want to avoid sending most of their grocery dollars to the food companies’ profit lines.

This one is silly for a number of reasons. First of all, if everybody followed this advice, stores would be full of shoppers who look like this:

Between trying to steer straight and trying to keep from doubling over with laughter, I, for one, would not be able to safely operating a shopping cart. Second, if the product you want fits within your budget and health criteria, why should you forego it simply because marketing dollars were spent behind it? Finally and most importantly, this “hack” is not entirely accurate: there are entire teams of people at food companies that specialize in deciding where items are merchandised on shelves – it’s called planogramming. The decisions are based on an understanding of market trends, consumer decision thought processes, and actual sales data. While it is true that some products are placed strategically in spots to appeal to a target audience (e.g. cereals with a cartoon mascot tend to be at a child-friendly height, prune juice tends to be accessible without the customer having to reach too far up or down), brands usually cannot directly buy their way into prime real estate on shelf. Why? Because good category managers – the people at food retailers who work to determine what to sell, where to put it, how much to charge, etc. – understand that every customer has different preferences, and shelves need to have variety in order to attract all sorts of shoppers. If companies could simply pay for the best merchandising space, wouldn’t stores be filled with only brands that have the biggest marketing war chest (you know them – their names are all over your favourite sporting venues and team franchises)? We know from observation that this simply doesn’t happen – most stores carry a good mix of popular mainstream brands, niche options (e.g. artisan lines, special dietary needs options like organics or gluten-free), and private label offerings. And that takes me to Point #3.

3. Get the best value with private label products: Many say that private label goods, or “store brands,” are often made by the same manufacturers as national brands and are priced lower on shelf because there are no advertising costs for customers to bear. Some even assert that “generics” are just the surplus or aesthetics rejects of national brands with a different label applied. So the tip goes that if you want to save money and still get the quality of your favourite branded products, buy private label.

This one is tricky because the statement is very broad. Private label goods are typically made by contract manufacturers and sold under the a supermarket’s own brand(s). As you can imagine, the same store brand could be applied to frozen lasagna (highly formulated, taste depends highly on recipe), table salt (not highly formulated, taste is not very dependent on recipe), and rubber gloves (taste shouldn’t matter, unless you have very peculiar consumption preferences) alike. This makes it very difficult to discuss the resemblance of an entire private label portfolio to its national brand counterparts – we wouldn’t normally expect Coca-Cola, Robin Hood flour, and Scotch-Brite sponges to all exist under the same brand, but this is what often happens in a private label situation.

Sometimes a private label product is made by a company that exclusively manufactures for store brands. In this case, while the product is unlikely to be identical in composition to the national brand, it could be formulated to look and/or taste so close that the differences are imperceptible. However, it could also intentionally be formulated differently for cost or quality differentiation reasons – for example, a private label’s product management team may decide that a sweeter store brand pasta sauce would give the customer an alternative from the leading national brand, or decide to use a cheaper tomato to make the sauce available at a lower price. In other cases, a private label could use the same manufacturer as the a national brand – sometimes using an identical formula to the national brand because of efficiencies associated with higher manufacturing volumes, and other times taking a different formula because the branded recipe is proprietary, or again, the private label may wish to reduce cost or provide quality differentiation. Generally speaking, private label products in Canada are not the surplus production of a national brand line or those that didn’t quite pass quality assurance for the brand name version. Why? Because of the idea in Point #2: retailers use planograms to carefully map out what goes on their shelves. If a space is reserved for a private label product, but that product’s availabilty depends on a branded version to have production excess, label misprints, or other minor quality flaws, would that not make for a very unreliable supply?

Some have asked me how often a private label product will cut corners in order to offer something comparable to the national brand but at a lower price. The honest answer is: not often. Consumers are smart, discerning people. While private labels tend to be cheaper than the national brand, few shoppers will buy it if the appearance, taste, or shelf life is truly awful. In fact, most retailers have dedicated teams of product managers and developers who work hard to safeguard the brand standards for their private label line – they track each product’s life cycle, keep a close eye on market trends, do consumer research, conduct tasting panels, and work closely with the manufacturers to ensure that the product is not just cheap, but of good value.

So, when are private label products “just the same as brand name but in a different package?” There is no short answer given the range of merchandise that is out there in the Canadian market alone. Bottom line? For minimally formulated things like baking soda or canned black beans, likely yes, or at least very similar. For meat or dairy products, for which there are not that many manufacturing plants across Canada, odds are good that they were made at the same site, but perhaps using slightly different formulations. For highly formulated products like ice cream or cake mix, probably no. Bonus: For over-the-counter medication, by law the active ingredients must be identical between the branded and the store brand, but marketing spend dictates that the branded version is priced easily 50% more on shelf.

Next week I will debunk a few more “hacks.”