Kroger has a generic branded version of pretty much everything in their store. How do they make all of it? There are different recipes, molds, and entirely different production processes for most of this stuff. Do they buy each product off of someone else and put on their own packaging, or do they really make it all themselves? (And if so, where are all these factories?)
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I worked at a Tyson food plant in high school. The plant that packages the Tyson brand food is the same one that packages the Great Value food. Like most people have said, it’s usually not as high standards for most products, but sometimes they’re the exact same thing just in a cheaper bag.
I work for a plant that manufactures some stuff with the Kroger label and identical products without it.
I work for a sugar manufacturer. We package their sugar, comes out of the same bin,on the same equipment, same employees as the name brand sugar. But it gets sugar out the door and still makes the company money.
We co-pack for other firms as we have the equipment and capacity. The negotiated price determines the quality of ingredients. The recipe is also negotiated. I prefer to use my own recipe so that I can also sell the same product under our name. If it’s the client’s recipe, then I can’t without their permission (part of the original negotiation).
Sometimes the generic brand foods are just rebrands of the original. This happens in various industries including in grocery industry. For example ibuprofen is the name for an ingredient in Advil. Usually this happens after the patent runs out. If you go into a CVS or Walgreens you’ll see the generic version of Advil with a CVS or Walgreens brand name instead next to Advil.
I was a production planner in the food industry for years. I’ve seen examples where it was cheaper for the producing company to provide the exact same product to the generic brand for productivity reasons. In other cases, the producing company can actually order cheaper ingredients for the production of the generic brand. It is still always a respectable product.
CHALLENGE: Kroger has the best can 12oz tune of all brands. Name brands like StarFish, Bumblebee, Chicken of the Sea give half a can of tuna mush, while Kroger brand truly is solid white in water. About 50 cents cheaper also. I’ve pretty well explored a lot of different stores suppliers and compared to name brands.
Best salsa, Kroger Private Selection. Best Tortilla chips, Walmart Great value Cantina Style (half the price of name brand).
For non food items (paper products, disinfecting wipes etc) there are private labelers who make products for other companies. I know that WalMart, Sams Club, Costco, Target, Wegmans and I am sure others all use the same private labeler for their generic disinfecting wipes (Clorox wipes).
There are companies that make the generic things and sell to multiple supermarket chains with custom packaging that they print for each chain. The chain can send the company their own box art, or they let the manufacturer come up with custom box art.
The same company might make generic for a dozen different large chains. Same product, different box.
In some cases, there’s sort of a middleman – a larger company that boxes stuff that they order from a bunch of smaller businesses. For example, a company that sells knock-off Cheerios to supermarkets might buy them from a couple dozen smaller suppliers.
Another note is large stores like kroger often have their very own manufacturing and this process also works in reverse- some brand name stuff is secretly Kroger made product in their own manufacturing plants, so in those cases the generic is often the exact same thing. They win on both vertical and horizontal segmentation and get to reap larger margins on those brands they produce
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