“Brand X” is the euphemism that is sometimes used to describe a private (store) brand. Store brands are often produced by the big-name manufacturers that occupy shelf space in the store. But, they are also produced by companies that specialize in private brands. One such company is Ralcorp, which is being acquired by food industry giant ConAgra – the maker of such popular brands as Egg Beaters, Healthy Choice, Reddi Whip, Libby’s, Wesson, and many more.
ConAgra’s purchase of Ralcorp reflects the solid popularity for the lower-priced “Brand X” version of products rather than the more expensive manufacturer brands. As Paul Ziobro and Julie Jargon report for the Wall Street Journal: “Once the deal closes, Omaha-based ConAgra will become the largest private-label food manufacturer in the U.S. During the economic downturn that began in 2008, shoppers flocked to budget-friendly store-brand items. Private-label brands—such as Trader Joe’s Joe O’s, which compete with General Mills Inc.’s Cheerios — now make up nearly 22% of packaged-food sales in the U.S., according to Nielsen data, up from 18.4% in 2007. Retailers have reason to love their in-house labels: They have profit margins about 10% to 15% higher than sales of national brands such as Kellogg and Kraft, analysts estimate. Some grocery retailers, like Target and Safeway have even run ads to promote their store brands.”
Click the photo to read more about ConAgra’s move into private brands.
Source: Bloomberg News