6 ms·

With the rare exception like Costco, cheaper house brands often imply they're equivalent to brand name goods, but take unadvertised shortcuts in process and/or

With the rare exception like Costco, cheaper house brands often imply they're equivalent to brand name goods, but take unadvertised shortcuts in process and/or feedstock, misleading consumers who don't take the time to carefully compare to weigh whether the shortcut is worth the value to them. I wouldn't mind house brands as much if supply chain information and process information was transparent across all companies, but that supply chain information is a pseudo-trade secret (and for real-time supply chain information, definitely a trade secret) [1], and you can forget about obtaining process information. I do use house brands for some goods personally, but this is the result of many years of a lot of careful vetting and monitoring ingredient lists that I know is not commonplace nor even feasible with many retail consumers. House brands can be a useful tool in the market, but they can be abused in too many ways for me to relax my vigilance as a consumer. They also can be abused in too many ways in their distribution channel role to obtain highly-granular, time-sensitive competitive information that normally wouldn't be available in the open market, for me to completely accept their unregulated deployment. I wouldn't go as far as to say ban house brands by law. But I wouldn't want to keep them completely unregulated in all contexts like we are currently doing, either. Happy to change my mind with any new information anyone cares to share though, as this isn't an area I keep a close eye upon. [1] https://www.importyeti.com/ https://www.importyeti.com/

scarface74 6y ago
Housebrand OTC drugs in particular are the same as the name brand equivalent. There was a Freakonomics episode where they said pharmacists overwhelmingly choose house brand OTC products. House brands of any product have to pass the same relevant regulations.
- yourapostasy 6y ago
  Yep, likely because OTC pharma is a tightly-regulated market? However, there are still gaps I haven't found explanations for yet, so I must be misunderstanding how house branding works. For example, house brands have not materially impacted the insulin market [1] even though it is quite regulated to my best understanding. Even when insulin patents expire, there haven't been house brands introduced on more modern formulations [2] [3]. Nor have house brands moved into vaccine production. There is probably much, much more than meets the consumer retail eye to house branding, and I'd love to get an insider's look at the factors and considerations around the decision to roll out a house brand product. [1] https://insulinnation.com/treatment/why-walmart-insulins-arent-the-answer-to-high-insulin-prices/ https://insulinnation.com/treatment/why-walmart-insulins-are... [2] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4955122/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4955122/ [3] https://www.pbs.org/newshour/health/insulin-market-shakeup-patients https://www.pbs.org/newshour/health/insulin-market-shakeup-p...
  - gamblor956 6y ago
    Even when insulin patents expire, there haven't been house brands introduced on more modern formulations [2] [3]. Nor have house brands moved into vaccine production. This is because house brands are made by the name brands. In order to maintain their competitive edge for their name brands, they don't offer the modern formulations white label to the stores, and vaccines generally are not permitted by FDA regulations to be sold white-label.
    - yourapostasy 6y ago
      Thanks, I didn't know that about vaccines, where can I find out about this? For DT, there is one generic label [1]. I don't see the commonality of the few others that are generic as well [2]. So the FDA regulation will be interesting to see. Combined with the daunting financing challenges with vaccines [3], that might explain why there are no white label vaccines? In a couple of my previous links, some of the more modern formulations like Humalog came off of patent protection in the US around 2017, but no one outside the manufacturer has picked up white label manufacturing. A lot of times house branding just seems like market segmentation to me based around packaging when the original manufacturer is making the same product, but many times I've picked up a house brand and a name brand packaged food for example, and find sugar is higher up in the ingredients list in the house brand (and the nutritional panel reveals it is a significant ranking change). Thus house brands seem like an obfuscation of the market to my uninformed eye so far. They seem to act in the macro scale as a way to prevent real competitors from arising and taking away real revenue and margin, by stuffing the distribution channel with SKU's that give a slightly larger cut to the distributors in exchange for maintaining the same vendor count (thereby making it much more difficult for a competitor to gain shelf space). Those incentives probably all change around with an ecommerce site like Amazon. I just find this aspect of free markets fascinating as a layperson. [1] https://www.cdc.gov/vaccines/vpd/dtap-tdap-td/hcp/about-vaccine.html https://www.cdc.gov/vaccines/vpd/dtap-tdap-td/hcp/about-vacc... [2] https://www.cdc.gov/vaccines/vpd/vaccines-list.html https://www.cdc.gov/vaccines/vpd/vaccines-list.html [3] https://www.ncbi.nlm.nih.gov/books/NBK221811/ https://www.ncbi.nlm.nih.gov/books/NBK221811/
      - 6y ago
gamblor956 6y ago
With the rare exception like Costco, cheaper house brands often imply they're equivalent to brand name goods, but take unadvertised shortcuts in process and/or feedstock, misleading consumers who don't take the time to carefully compare to weigh whether the shortcut is worth the value to them. This is not true. I used to have a number of consumer products clients when I was at a firm. Store-brand products are all made for the stores by name brands as part of their white label programs (excepting clothing, since the transaction flows are different for that industry). Usually the way it works is that the white label product is the same as the standard product, but with store-selected packaging. In most cases, the differences are purely cosmetic (as with cereals, which are made for most stores by General Mills and its competitors.) In a few instances, the store brand is usually a white label version of the brand name's discount brands, such as the store-brand products at the 99 Cents Only and Dollar Stores. I wouldn't mind house brands as much if supply chain information and process information was transparent across all companies, but that supply chain information is a pseudo-trade secret (and for real-time supply chain information, definitely a trade secret) [1], and you can forget about obtaining process information. This information is known within the industry. As 99.99999% of customers don't care about the supply chain of a store brand product, they don't include that information on the packaging. But then again, neither do the name brands. In some cases, you can the name of the manufacturer by asking the store's corporate office, and they'll usually tell you. Generally, they don't have access to "process information" for how the product is manufactured because they're just buying the product from the manufacturer. Whether the manufacturer will tell you depends on the product. I wouldn't go as far as to say ban house brands by law. But I wouldn't want to keep them completely unregulated in all contexts like we are currently doing, either. House brands are subject to the same regulations as name brands.
- srtjstjsj 6y ago
  It's absolutely trivial and cheap to buy two boxes of cereal and open them up to see that the store brand version is quite different from the name brand.

scarface74 6y ago

Housebrand OTC drugs in particular are the same as the name brand equivalent. There was a Freakonomics episode where they said pharmacists overwhelmingly choose house brand OTC products. House brands of any product have to pass the same relevant regulations.

yourapostasy 6y ago
Yep, likely because OTC pharma is a tightly-regulated market? However, there are still gaps I haven't found explanations for yet, so I must be misunderstanding how house branding works. For example, house brands have not materially impacted the insulin market [1] even though it is quite regulated to my best understanding. Even when insulin patents expire, there haven't been house brands introduced on more modern formulations [2] [3]. Nor have house brands moved into vaccine production. There is probably much, much more than meets the consumer retail eye to house branding, and I'd love to get an insider's look at the factors and considerations around the decision to roll out a house brand product. [1] https://insulinnation.com/treatment/why-walmart-insulins-arent-the-answer-to-high-insulin-prices/ https://insulinnation.com/treatment/why-walmart-insulins-are... [2] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4955122/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4955122/ [3] https://www.pbs.org/newshour/health/insulin-market-shakeup-patients https://www.pbs.org/newshour/health/insulin-market-shakeup-p...
- gamblor956 6y ago
  Even when insulin patents expire, there haven't been house brands introduced on more modern formulations [2] [3]. Nor have house brands moved into vaccine production. This is because house brands are made by the name brands. In order to maintain their competitive edge for their name brands, they don't offer the modern formulations white label to the stores, and vaccines generally are not permitted by FDA regulations to be sold white-label.
  - yourapostasy 6y ago
    Thanks, I didn't know that about vaccines, where can I find out about this? For DT, there is one generic label [1]. I don't see the commonality of the few others that are generic as well [2]. So the FDA regulation will be interesting to see. Combined with the daunting financing challenges with vaccines [3], that might explain why there are no white label vaccines? In a couple of my previous links, some of the more modern formulations like Humalog came off of patent protection in the US around 2017, but no one outside the manufacturer has picked up white label manufacturing. A lot of times house branding just seems like market segmentation to me based around packaging when the original manufacturer is making the same product, but many times I've picked up a house brand and a name brand packaged food for example, and find sugar is higher up in the ingredients list in the house brand (and the nutritional panel reveals it is a significant ranking change). Thus house brands seem like an obfuscation of the market to my uninformed eye so far. They seem to act in the macro scale as a way to prevent real competitors from arising and taking away real revenue and margin, by stuffing the distribution channel with SKU's that give a slightly larger cut to the distributors in exchange for maintaining the same vendor count (thereby making it much more difficult for a competitor to gain shelf space). Those incentives probably all change around with an ecommerce site like Amazon. I just find this aspect of free markets fascinating as a layperson. [1] https://www.cdc.gov/vaccines/vpd/dtap-tdap-td/hcp/about-vaccine.html https://www.cdc.gov/vaccines/vpd/dtap-tdap-td/hcp/about-vacc... [2] https://www.cdc.gov/vaccines/vpd/vaccines-list.html https://www.cdc.gov/vaccines/vpd/vaccines-list.html [3] https://www.ncbi.nlm.nih.gov/books/NBK221811/ https://www.ncbi.nlm.nih.gov/books/NBK221811/
    - 6y ago

gamblor956 6y ago

With the rare exception like Costco, cheaper house brands often imply they're equivalent to brand name goods, but take unadvertised shortcuts in process and/or feedstock, misleading consumers who don't take the time to carefully compare to weigh whether the shortcut is worth the value to them. This is not true. I used to have a number of consumer products clients when I was at a firm. Store-brand products are all made for the stores by name brands as part of their white label programs (excepting clothing, since the transaction flows are different for that industry). Usually the way it works is that the white label product is the same as the standard product, but with store-selected packaging. In most cases, the differences are purely cosmetic (as with cereals, which are made for most stores by General Mills and its competitors.) In a few instances, the store brand is usually a white label version of the brand name's discount brands, such as the store-brand products at the 99 Cents Only and Dollar Stores. I wouldn't mind house brands as much if supply chain information and process information was transparent across all companies, but that supply chain information is a pseudo-trade secret (and for real-time supply chain information, definitely a trade secret) [1], and you can forget about obtaining process information. This information is known within the industry. As 99.99999% of customers don't care about the supply chain of a store brand product, they don't include that information on the packaging. But then again, neither do the name brands. In some cases, you can the name of the manufacturer by asking the store's corporate office, and they'll usually tell you. Generally, they don't have access to "process information" for how the product is manufactured because they're just buying the product from the manufacturer. Whether the manufacturer will tell you depends on the product. I wouldn't go as far as to say ban house brands by law. But I wouldn't want to keep them completely unregulated in all contexts like we are currently doing, either. House brands are subject to the same regulations as name brands.

srtjstjsj 6y ago
It's absolutely trivial and cheap to buy two boxes of cereal and open them up to see that the store brand version is quite different from the name brand.