What Does Private Label Mean For Your Company?

In the competitive beverage industry, finding ways to differentiate and stand out for your brand is essential. Private labeling was born, a strategy that many companies have used recently. But what exactly is private label, and what does it mean for beverage companies? This article will explore the concept of private labels and its benefits for your business.

What is a private label?

Private label refers to manufacturing and branding one company’s products and branding them under another company’s name. In the context of the beverage industry, that means creating unique beverage products specifically for a particular retailer or distributor. Instead of selling generic or widely available drinks, the private label allows you to develop a custom drink line that fits your brand and serves your target audience.

Third-party manufacturers produce private-label products marketed under the retailer’s brand name or through a licensing agreement. Typically, retailers specify everything about private label goods, including what’s in them, how they’re packaged, and what the label looks like.

Walmart, Costco, Aldi and Trader Joe’s are examples of retailers that use private labels. According to research by the Private Label Manufacturers Association (PLMA), private labels accounted for less than 20% of consumer goods market share in channels tracked by Nielsen in 2018.

Read more: Private Label Beverage For Your Business, Pros And Cons?

What makes a private label successful

Consumers increasingly trust retail as the businesses that provide them with a positive customer experience. As a result, people anticipate that the shop brands will have the same degree of quality and similar features as the store itself. For example, Trader Joe’s keeps all its private brands free of high fructose corn syrup, GMO ingredients, hydrogenated oils, MSG, artificial flavors, colors and preservatives.

Private labels should add variety to an established category. Private label brands, like national brands, succeed best when they bring something to the market or meet an unmet demand. Private label brands offer the chance to bridge a gap between current brands or introduce innovations.

Private-label brands must use appealing packaging designs with a clear focus on their intended audience. Winning items will attract and engage customers. Private labels that are well-designed differentiate products and give a distinct brand promise. Whether visibly related to the retailer brand or not, private label products must compete with national brands regarding packaging and visual identity.

Benefits of private label

Brand differentiation

Private labels have the opportunity to differentiate themselves from competitors. By offering unique and exclusive products, you can create a distinct brand identity and attract customers looking for something different.

Increased profit margins

Private-label products often have higher profit margins than generic or widely available beverages. Since you are directly involved in manufacturing, you can control costs and pricing, allowing for greater profitability.

Enhanced brand visibility

Private-label products can help increase your brand’s visibility in the market. When consumers see your branded beverages on store shelves, they become more familiar with your company and are likelier to choose your products.

Customer loyalty

By offering private-label beverages, you can build a loyal customer base. When customers find a drink they love and can only find it under your brand, they are more likely to become repeat buyers and advocate for your products to others.

Customization and control

Private label allows you to have full control over the product development process. You can tailor the taste, ingredients, and packaging to meet the specific preferences of your target audience. This level of customization gives you a competitive advantage and the ability to create products that truly resonate with your customers.

Partnership opportunities

Private labels can also open doors for partnerships with retailers and distributors. By providing exclusive beverages, you can establish strong relationships with key players in the industry, leading to increased distribution and exposure for your brand.

Embracing private labels can give your business a competitive edge in the market and pave the way for growth and success. So, consider leveraging private labels to create unique and enticing beverage products that cater to your target audience and help your brand thrive in the industry.