How to Grow Your Off-Brand Food Business
You could build your food brand the hard way. Invest a lot of blood, sweat and tears (aka brand development, market testing and advertising spend) into becoming a household
name. It may work, and you may reap the ROI that comes with being #1 in your category.
Or you could go the anonymous route. Manufacture a food product for private label. Let the store take all the glory while you take home your fair share of the profits. It’s a strategy rife with opportunities that we’ve covered elsewhere.
But what if we told you there was another way to get on the shelf and sell?
An overlooked – and underappreciated – way to piggyback on competitors’ success and cannibalize their profits? Take a moment to consider what the following 12 food products have in common:
- Thick Mints
- Butter It’s Not!
- Panburger Partner
- Mountain View
- Kot Kats
- Cocoa Peanut Butter Spheres
- Chocolate O’s
- Creme Betweens
- Red Balls Energy Drink
(If we included product images, it would be way too easy. If you’re dying to know all the answers, scroll to the bottom of the blog post.*)
You guessed it: we’re talking about off-brand products. You may laugh at these knock offs, but these off brands are laughing all the way to the bank.
That’s because, particularly in these times of inflationary belt-tightening, consumers are willing to give up brand loyalty if the price is right.
The 2023 Private Label Report, produced by the Private Label Manufacturers Association, showed private label sales achieved record sales in 2022 with $228.6b in total sales (compared to national brands at $981.1b). What’s more, private label sales growth that year – 11.3% – was nearly double the 6.1% growth of national brands.
While there’s no comparable association for off-brand food manufacturers to herald their successes, the opportunity is obvious: the same market forces that are behind the surge in private label sales in the past few years apply to off brands as well – if they can compete on price and quality.
Off Brands vs. Private Label: What’s the Difference?
If you’re caught off guard by all these different categories of food brands, here’s a quick primer.
National brands are, obviously, the big well-known brands with products that can be found all over the country. Think Pepsi or Oscar Mayer.
On the other hand, private label products are products that are exclusively sold by a particular retailer under its own label. Private label products are usually produced by a third-party manufacturer and sold under the retailer’s brand name. Private label products are often cheaper than branded products and are typically found in grocery store chains, discount retailers and online marketplaces. Popular private labels include Costco’s Kirland Signature, Kroger’s Private Selection, Walmart’s Great Value and Whole Foods 365 Everyday Value.
Some popular stores, like Aldi and Trader Joe’s sell (almost) nothing but their own private label brands.
Then there are what we’re talking about today: off-brand food products.
Off-brand food products bear a number of similarities to private-label products. For example, both are often referred to by consumers as the “generic brand.” That’s because, historically, they’ve both used blander packaging compared to the bright colors and eye-catching appeal of the big name brands. Also, both tended to be lesser known due to their lack of advertising. For that reason, consumers have tended to approach both off brands and private-label brands with suspicion.
However, off brands differ from private label brands in two main ways.
One, they’ll typically reward food manufacturers with a higher margin than if they were to contract as a private-label manufacturer.
And two, well, we might as well let the copycat out of the bag. While most private labels today aim to establish their own highly recognizable storewide brand, off brands, in the allusive of their brand names and the visual cues of their packaging, are clearly trying to tiptoe the trademark line and ride the coattails of the national brand’s success.
Strategies for Growing Your Own Off-Brand Food Business
Now that we’ve clarified the differences between off-brand and private-label products, let’s discuss how you can grow your off-brand food business. Here are a few strategies to consider:
1. Focus on Quality
When it comes to off-brand food, many consumers are skeptical of the quality of the product. And, if your product doesn’t deliver upon a consumer’s first experience, then it’s likely going to be a fool-me-once type of experience. To grow your off-brand food business, it’s important to make sure the quality of your product measures up. Make sure that your products meet or exceed industry standards and that they are of a similar quality to the branded product. Because there’s a consumer trust gap due to lack of awareness and marketing surrounding your product, quality will be key to earning repeat customers.
2. Create Eye-catching Packaging
One of the benefits of off-brand food is the fun you can have with the packaging. On the one hand, the leading national brand has blazed a trail for you to follow. On the other hand, consumers expect off brands to have a slightly cartoonish dimension to them – to consumers it signals competitive pricing – and you can take advantage of these expectations. Lean into it. Consider using bold colors, unique graphics or witty slogans to make your product stand out.
3. Price Competitively
As mentioned earlier, the main appeal of off-brand products is the value to consumers looking to make their food budget go further. To be successful in this space, you’re going to have to compete on price. Make sure that your products are priced lower than the branded product but still offer a good value for the price. It’s also important to monitor your competitors’ pricing and adjust your pricing strategy accordingly. The added bonus is, if your off-brand product delivers on quality while competing on price, it’s more likely consumers will believe they’ve discovered a “best-kept secret.” Which, of course, they’ll brag about to all their family and friends.
4. Leverage Social Media
Because of the lower cost of entry, social media will be the go-to marketing tool for growing your off-brand food business. Consider creating social media accounts for your brand and using them to showcase your products. Again, lean into the mischievous nature of being the knock-off brand. OriginalProngles.com is a great example.
Additionally, you can share recipes, cooking tips and behind-the-scenes photos to engage with your followers. You can also use social media to run promotions or contests to encourage consumers to try your products.
5. Focus on Niche Markets
Off-brand food can be successful in niche markets where there is less competition from branded products. Consider focusing on niche markets that are underserved by branded products. For example, if there is a high demand for vegan or gluten-free products in your area, consider creating off-brand products that cater to those markets.
Need an Off-Brand Launch Partner?
If you’re looking to create a food brand that meets consumers’ desire for better value in an increasingly costly market, schedule a conversation with NewPoint today. We have years of experience helping food manufacturers launch new products, secure retail shelf space and sustain sales. Let’s see what we can do for you!
*These are the popular brands these off-brand products are imitating are 1) Lay’s Potato Chips, 2) Thin Mints, 3) I Can’t Believe It’s Not Butter!, 4) Hamburger Helper, 5) Mountain Dew, 6) Pringles, 7) Kit Kats, 8) Doritos, 9) Cocoa Peanut Butter Spehres, 10) Oreo O’s [the cereal], 11) Oreos (the cookies) and 12) Red Bull Energy Drink. And if you love these, you can find more examples here, here and here.