PLMA convention is big winner for buyers - Private Label Manufacturers Association's convention, Chicago, Illinois - includes related article on Bitrex, a bitter-tasting additive

Discount Store News, Jan 6, 1992 by Pete Hisey

PLMA Convention is Big Winner for Buyers

CHICAGO - Nearly 4,000 attendees jammed the Private Label Manufacturers Association's annual convention at the Hyatt O'Hare Hotel in Chicago, making it, in sharp contrast to most trade shows last year, a record-setter.

That could be a reflection of the steamless economy, or as easily, a reflection of the increasing quality/value connection in the PL industry. In any case, buyers from discount stores, drug chains and supermarkets flooded the 1991 expo in search of new or expanded private label opportunities.

Particularly hot areas appear to be ethnic foods, condiments, cough and cold remedies, photo, infant goods and adult incontinence products.

Definitely less noticeable this year is "green" marketing. Vendors said that private label shoppers, in general, did not respond to the green message, and that recycled goods were just too expensive for private label price points.

The economy, several vendors noted, has played a large role in the growth of private label. "People are really looking to save a few dollars here and there," one noted. "When you stack up a |compare to' product, people will try it. If it's good, they'll keep coming back."

The increase in quality from the old generic products evidently keeps people coming back. A PLMA survey indicated that almost 90% of consumers are are aware of and have purchased private label products; over 50% consider them equivalent to national brands.

And, with the weak economy laying siege to manufacturer's margins, many name brands have pushed their price to the limit, offering private label and store brand products an unprecedented opportunity to garner market share. A name brand tortilla chip might cost up to $2.99 for a one pound bag; Wal-Mart retails the same size and equivalent quality for as little as 97 cents, and makes a higher margin on the store brand.

Similarly, the chain began selling its own cola - Sam's American Choice - for up to 25% less than national brands, at a much higher margin. Wal-Mart also recently began selling private label bottled juices and chocolate chip cookies under the American Choice label.

So it's not too surprising that discount retailers are looking to expand their store brand assortments.

For example, Dollar General, which won this year's PLMA award as the top private label discount store retailer, has turned its store brand into a major ad focus, comparing each private label item with the equivalent name brand.

The thriftier dollar store shopper relates to the savings. A radio ad noted that Dollar General's everyday price for Listerine was $3.99; its store brand sells for $1.

Many retailers now feel that their store name is as valuable and trusted as all but the most popular national brands. Consequently, products as varied as canned asparagus, frozen dinners, fire logs, plastic cutlery, motor oil, coffee filters, dried pasta, fabric softener sheets, lipstick, and others are finding their way into the private label universe.

More important, many private label vendors are finding ways to make their product even more desirable to consumers. On the food end, gourmet-level products are sold at national brand prices, packaging has been upgraded, and some suppliers are coming up with new and innovative products.

PHOTO : Andrew Simon, president of Confab, chats with Kmart's John Kyrkit on the convention floor.