eli5, how do “store brands” work?
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Stores contract with manufacturers to make product specifically for them, usually at a cheaper rate.
Some ways that they get a lower cost:
sometimes the food manufacturer is not the same as the brand name one. sometimes this is cheaper.
sometimes its the same, but volume agreements are negotiated leading to a cheaper price. sometimes the same, but the packaging is cheaper, or the ingredients are cheaper.
usually this provides little margin for the main manufacturer, but it keeps the lights on/machine running when its very expensive for machines to be down.
sometimes its whats called a ‘copacker’ and they usually do the packaging in place of a manufacturer actually producing it. for them, its a matter of replacing the packaging/labelling and continue producing. ive seen very little difference in product (brand v “generic”) when its made by a copacker.
source: i work with copackers, private labels, and brands for some of these products
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