How does Walmart’s Great Value manufacture so many products?
In: Economics
The label is applied to a broad range of products but, the products are not made by a single manufacturering company.
So as you guessed, it would be unlikely to be made by a single company.
Some manufacturers, specialize in a single product and fabric that product for a number of companies based on their specifications.
Walmart pays manufacturers to create the product for them. They then slap on the Great Value label and you buy it at the “generic” price because Walmart doesn’t put all the marketing and advertising into the product that Kraft or Coke or any of the other name-brand manufacturers would do.
Major brands also produce for generic store labels like Great value. Sometimes you can see this in the packaging (like ketchup bottles).
I can tell you from personal experience that sometimes the manufacturer for one brand makes the same for Walmart just with different Great Value packaging. I worked at a potato plant that packaged hash brown patties and one day we’re making Buyers Best patties and the other it’s Great Value. Same also for making A&W and Chick Fil A fries then they switch to great value. Maybe a slightly different seasoning but the same potatoes with different packaging .
They don’t manufacture them, they contract with factories who make those products. So Wal-Mart finds a toilet paper factory and hires them to make toilet paper and wrap it in Great Value packaging… maybe Wal-Mart has developed their own specifications for that product, or maybe they go to a company and say they want a product they can sell for $X and have the product developed and/or produced. They also contract with a nut roasting facility to make and package nuts, and an orange grower co-op to squeeze and bottle orange juice.
There are some companies that specialize in white label goods — that is making products for various companies to sell under their own brand. They can adjust the products’ recipe or specification for each company. Also, brand name products might have extra capacity and might sell production capacity. So a line that runs 2 shifts a day of Ragu pasta sauce might run a shift of Great Value (changing the recipe) as well.
Companies often make products specifically for Walmart in the same factory where they make products under their own label. Often the products will be made more cheaply to increase profit margins.
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