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Definition: Private-Label Beverages

Given the highly competitive retail marketplace, many of the medium to largest retailers have to find the means to differentiate themselves from their competition. One of the most successful ways the retailers have accomplished this strategy is “private label." These private labels are named either after the name of retail chain or more often just a generic name. Beverages are one of the most highly competitively priced, featured, and advertised items in these retail accounts, and were one of the first and very important categories to be private label. Private label items are usually priced from 10% to 15% lower than their branded competition. There are numerous consumers who are not brand loyal and purchase these private-label brands, including beverages. These consumers are very loyal to these store-owned brands. These brands in many categories are a significant share of the retailers business. The private-label beverages are always blended, labeled, packaged, and delivered by "co-packers" that specialize in this type of business. Most of these co-packers have their own secondary brands of beverages. It would be an anomaly if a national branded company preformed this service in the beverage business.

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