Winter, 1997

From the Editor

A Look At Branded Alternatives

In looking to purchase food products from the U.S., many companies’ thoughts immediately go to the national brands. After all, these are the labels most popular among U.S. citizens. To those who have visited the U.S. or seen U.S. movies and television, it is these brands that seem most closely tied to the American lifestyle.

Yet, for an importer, a focus on these brands can, at times, be frustrating. First of all, these brands are often popular in many countries; as such they may not even be export items in many continents, as local production facilities have been set up to handle regional demand. Second, even if the items are suitable for export, these well known brands were often export pioneers. They often have established trading relationships and, in many cases, exclusive representatives in many countries and trading blocks. Third, because of their branded orientation, many of these companies don’t even want to sell their product if it is not sold as part of an integrated market penetration program that includes consumer advertising, trade promotion, etc.

Of course, none of this is true in every country and every situation. Large branded companies also are actively looking for representation in unserved markets and are sometimes dissatisfied with existing representation in established markets. Thus, they are open to alternatives. Still, it can be difficult to forge a relationship with brands.

Fortunately, there are ready alternatives, including regional brands, trade brands and private label.

Regional brands are common in the U.S. Because of the great size of the country and historical patterns that led certain groups to settle in certain places, say Scandinavians around Minnesota, it is common for different regions to have different brands popular with consumers. Though, to some extent, the homogenization of American society – caused by TV, radio, even the interstate highway system – has reduced the vitality of regional brands, many are still very strong.

These brands are quite popular with consumers in their marketing areas, yet they are often freely available for export. In some cases, the brands are even familiar to particular groups of non-U.S. consumers.

Trade brands also are a powerful option on many items. When one deals with items that are not generally branded for consumers, such as fresh produce, there are often strong trade brands behind the product. Though unknown to consumers, these trade brands can often lead to big premiums in pricing. This is because one trade brand of apples, say, may acquire a reputation as giving a consistently heavier pack, for example. Other variables such as growing region, quality control, ancillary services, and more can get valued as part of a trade brand. Once again, these strong trade brands are recognized for their quality yet are also frequently available for export.

Traditionally, private label in the U.S. was a discounting mechanism. A supermarket would sell a national brand and then discount the supermarket’s own house brand right next to the national branded item. Though this is certainly a big part of private label, it is far from the whole story. Today, some retailers use private labels as a premium brand, trying to get very top dollar. Others feature “generics,” or plain label products designed for economy.

All this means that non-U.S. importers really have a range of options when considering private label. They frequently can purchase the house label of a U.S. supermarket chain or wholesale grocer. These products, which have won wide consumer acceptance in the U.S., are generally of excellent quality, yet are also generally available for export and, usually, are priced below national brands.

Generic brands are another option for those in markets where price is the key object. Premium private-label brands also are available for those who are looking for a more upscale approach.

If volume is sufficient, an importer can have a private label produced specifically for his company and market. Many times the volume requirements are smaller than people suspect.

Though all three of these alternatives may lack the ready-made consumer appeal of well promoted internationally known brands, they also offer a powerful set of attributes: They are available, they are often reasonably priced, the quality can be found which suits the target market and, because the brands are not as well known, an aggressive importer has an opportunity, working with the manufacturer, to create its own image for the brand.

Because this image can be targeted to the specific needs of the importer, it often means big opportunities to grow sales, profits and business.  EXP