“In some instances, there’s a middleman … between the manufacturing facility and the retailers, ” he observed. “We try to function directly with the manufacturing unit or supplier . and we pass the price savings from this to the consumers. ”
On exactly why manufacturers would want to sell their products under supermarkets’ house brands, he or she said some of them possess excess capacity and therefore are “open to dealing with multiple brands”, which includes house brands, to optimise their capability.
When it comes to advertising branding of home brands, FairPrice furthermore “(does) not over-invest”. For its own flavoured and UHT full-cream fresh milk, for instance, it opted for “standard packaging from the supplier”.
When the items were launched, FairPrice established “some (brand) communication to get the initial awareness up”. After that, it relied on word-of-mouth recommendations through consumers who acquired tried the milk, said Wong.
“That allows us to not have to continue spending marketing and advertising dollars on traveling the sales plus awareness. ”
CO-BRANDED FISH BALLS: A NEW STRATEGY
FairPrice’s house brand sales have grown simply by 20 per cent in the last three years.
And also a Talking Point study found that fifty-one per cent of the 500 respondents are making a lot more house brand buys compared to a year ago. The main reason for choosing these products: Price.
Singapore’s primary inflation, which excludes accommodation and personal transport costs, has reached its maximum level since November 2008.
This rose 4. four per cent year on year in 06, up from a few. 6 per cent in May, with stronger price increases in types such as services, foods, retail, electricity plus gas.
Yet house brands may not necessarily be the least expensive products on the shelves. This is because supermarkets have got responded to changing client needs and expanded their house brand range beyond the essentials.
Some products cater for segments of shoppers with more specific or sophisticated tastes. Consider, for example , FairPrice’s natural extra virgin coconut oil.
“We look at our information and … exactly where there’s an opportunity for us to expand our own range to meet (customers’) needs, ” mentioned Wong.
Online grocer RedMart, at the same time, has adopted an additional strategy for some of the house brands. It has partnered with some producers and rolled out co-branded products with packaging that features both RedMart’s and the manufacturer’s names.
One particular collaboration is with Fishball Story, an eatery that was awarded the Michelin Bib Gourmand for its fish ball noodles.
From S$6 per pack of 15 RedMart x Fishball Tale Yellowtail Fish Tennis balls (300 grammes), this is a bit pricey, felt Talking Point web host Diana Ser.
The objective of this collaboration, said Jolin Huang, head of RedMart and grocery at Lazada Singapore, was not to improve people’s perceptions of house manufacturers but to offer a broader range to clients.
“Also giving them an alternative (that’s) better-tasting (and) that they’re not able to find within supermarkets outside as well as at (other) on the web supermarkets, ” the lady added.
Ultimately, consumers looking to extend their dollar could do so by choosing house brands of everyday items such as toilet paper, biscuits, grain and dishwashing liquid.
For example , Ser’s grocery bill for the trolley laden along with house brands has been 30 per cent (S$19) less than the S$64. 40 she would possess spent on the same products if they were non-house brands.
As supermarkets’ house manufacturers evolve and expand, if the result is really a wider range to choose from, “it’s still a win for us”, she said.
Watch this particular episode of Talking Point here. The programme will be aired on Channel five every Thursday on 9. 30pm.