Private label, as a brand, certainly has come a long way. Evidence that many stores brands can now rival iconic national brands is on display in the latest Hartman Group report, "Private Label 2010: Redefining Meaning of Brand."

"In many instances, shoppers no longer can distinguish between national and private-label brands," says Hartman Group's senior vice president, Michelle Barry, Ph.D. "What's most interesting is not so much the fact that it's happening, but that people don't really care that they don't know the difference. The importance of branding and, to some extent, the badge value of brands in the past, is quickly giving way to a greater emphasis on the product and the overall experience controlled by the retailer."

While the vast majority of shoppers are able to correctly identify many legacy national brands such as Tropicana and Kashi, only one-fourth of shoppers can correctly identify newer or specialty brands as national brands such as Seventh Generation, Method or Muir Glen.

"A lot of retailers want 'credit' for their private-label brands, which many aren't receiving," says Barry. "This clearly points to new opportunities for private-label brands to dominate newer categories such as the natural/organic marketplace, sustainability or functional foods. The ultimate success here will be in retailers' ability to manage store brands as 'brands' rather than merely a product with a store name on the label."

The report presents the consumer perspective on private label that includes:

• Impact of the economy [on] private label
• New consumer definition of "value"
• Key drivers of private label and national brand usage
• Private label adoption pathway
• Brand switching
• 31 category-level examples and brand score cards

What's the Lesson?
While private label has come far as a brand, there are seemingly boundless opportunities that lie ahead. What does this mean for manufacturers and retailers?

For retailers:
A lot of retailers want "credit" for their private-label brands, which many are not receiving. However, this clearly points to new opportunities for private-label brands to dominate newer categories such as natural/organic, sustainability or functional foods. The ultimate success here will be in retailers' ability to manage private label as "brands" rather than as a product with the store's name slapped on the label. In other words, work to shift the numbers further where store brands are misidentified as national brands -- then you know the job is well done.

For manufacturers:
Not all is gloom and doom for national brands. In fact, we [the Hartman Group] believe the future can be quite rosy. As national brands contemplate future competitive strategies, keep in mind that you [the manufacturer], not retailers, have consumers' permission to be the expert on food and food culture. Consumers want national brands to become more relevant and reclaim their expertise in food: be the expert in cheese, be the expert in cookies, etc. So, go back to your roots. Do what you have always excelled at: innovation and shopper marketing. A vast land of untapped potential awaits CPG companies by reimagining eating occasions and identifying new ones where brands, products or categories did not play before. Within these new or reimagined occasions are many instances and categories CPG companies have yet to recognize. One occasion at a time, this is the pathway to capture incremental growth opportunities.

To learn more about the Hartman Group, visit www.hartman-group.com.