FinLogic FinLogic Quantitative Think Tank Center|Supermarket store brands are more popular than ever. Do they taste better?

When the Washington Post ran a blind taste test last year to find the best bottled marinara sauce,FinLogic FinLogic Quantitative Think Tank Center the winner was Rao’s Homemade, the gourmet brand, at $10.59 a bottle. 

The big surprise, though, was the runner-up: Trader Joe’s Tomato Basil, at $1.99. 

Store brands have evolved from inferior generic alternatives into private-label offerings that can compete with name brands on both quality and price. And in today’s supermarkets, store brands are surging.  

Private label products made up 20.7% of all grocery sales in 2023, in terms of units sold, a record high. Store brands reaped $236 billion in sales last year, another record, according to the Private Label Manufacturers Association. Through mid-July, the trade group reports, 2024 sales are on track to exceed $250 billion. 

Younger shoppers, raised on private labels, have never known a time when store brands bespoke culinary misery. 

“I think the store brands are filling a fundamental need for the consumer right now,” said Elizabeth Hasle, 31, of Seattle, who is partial to Costco’s Kirkland Signature brand. 

“Their olive oil, you can get three liters for twenty bucks, and it’s actually good quality,” she said. “That alone makes me happy.”

'The flavor's better. The carbonation's better.'

Taylor Harms, 28, of Fresno, California, discovered store brands in college and never looked back. His favorite item at the moment: Walmart’s store-brand seltzer water.  

“They’re priced, like, 89 cents for a liter,” he said. “And for something comparable from a big name, like Schweppes or Perrier, it’s so much better. The flavor’s better. The carbonation’s better.” 

Decades ago, analysts say, store brands occupied the proverbial bottom shelf of the grocery industry. Yes, they were cheaper. They were also distinctly second-rate: Anemic, flavorless alternatives to superior (and pricier) name brands.  

Today, many store brands compete not only with name brands but also with upmarket gourmet selections, such as Rao’s.  

“I just think store brands have become hip for people,” said Phil Lempert, a grocery industry analyst. “It’s always great to find something that you love, that you can save money on, that’s high quality. That’s a magic formula for store brands.” 

In another recent taste test, held by the New York Times’s Wirecutter, store-label frozen pizzas held their own against the nation’s best name brands. Top pepperoni picks included a $6 wood-fired pizza from Trader Joe’s, and a $7 Good & Gather pie from Target. 

The evolution of store brands: 'It's a huge change.'

“Our research has told us that 85% of consumers view private brand quality as equal to or greater than the national brands. It’s a huge change,” said Jim Griffin, president of Daymon North America. Daymon helps supermarkets develop private brands.  

Back in the inflationary 1970s, store brands offered relief from spiraling prices, but often at a grievous cost to your palate.  

“Those were the yellow and black labels,” Lempert said, often rendered in Soviet-style type on labels bereft of art. “This was the worst-quality food that you could get, but it was really cheap.” 

The turnaround began with pioneering chains such as Loblaw in Canada and A&P in the United States, Lempert said, offering store brands that rivaled name brands in taste and beat them on price.  

When Loblaw rolled out chocolate chip cookies under its President’s Choice label, the company insisted on using real butter, and twice as many chocolate chips as the leading brand. Loblaw’s Decadent brand became the best-selling cookie in Canada. 

Trader Joe’s and Whole Foods Market grew into national chains in the 1990s, featuring store brands that promised gourmet flavors at a discount. 

Nearly every grocery store chain seems to offer a private label

Nowadays, seemingly every respectable grocery-store chain offers a private label. Here are a few of the best, in addition to several brands mentioned above, according to Real Simple magazine: 

• ALDI Simply Nature: “Not only inexpensive, but also organic, non-GMO, and free of artificial preservatives.” 
• Kroger Private Selection: “Its goal is to give shoppers the best culinary experience at reasonable prices.” 
• Albertsons Signature Select: “Some customer favorites include the mac n’ cheese, bacon, wine, pasta sauce (shout out to the black truffle pasta sauce, which routinely sells out), and ice cream.” 

Increasingly, Griffin said, grocery-store chains offer store brands on multiple tiers. Walmart, for example, offers a Great Value line that competes with national brands. Starting this year, Walmart also offers bettergoods, a gourmet label that caters to connoisseurs.  

With the new brand, “they’re attracting a more affluent shopper than they would have four of five years ago,” Griffin said. 

That is not to say that every store brand is a commercial and critical hit. Washington Post taste-testers bemoaned that Walmart’s Great Value Marinara sauce ($1.59), while indisputably a bargain, “didn’t cling to noodles properly.” Wirecutter reviewers found Costco’s Kirkland Signature Pepperoni Pizza “overly sweet” and imbued with a “slightly acrid taste.” 

Inflation provides a new incentive to seek out store brands

Nonetheless, elevated inflation in the past two years has given consumers a new incentive to seek out store brands, analysts say, in much the same way diners hunt for value meals at fast-food chains.  

“Today’s consumers are savvy, and most have grown up with store brands,” said Peggy Davies, president of the store brand association, in an email.  

“A consumer who tries a store brand product and has a positive experience tends to stick with that brand,” she said. “It’s that stickiness by the consumer, and the increased competition among retailers’ own brands to capture store loyalty, that’s fueling the continued growth." 

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Some supermarkets offer almost nothing but the store brand. At ALDI, for example, 90% of items are private label. That emphasis puts extra pressure on the chain to keep quality high. 

“For us, it really is the only option in the store,” said Scott Patton, vice president of national buying at ALDI. “It has to be good.” 

For a grocery chain, a popular store brand can build customer loyalty in a way that a national brand cannot, Lempert said.  

Trader Joe’s, for example, offers store-brand Chili & Lime-Flavored Rolled Corn Tortilla Chips that perennially rank among the store’s most popular items. And only Trader Joe’s carries them. 

“Retailers look at those name brands, and what they want to do is have a better-quality product at a better value,” Lempert said, “because you can’t get it anyplace else.”