(Nov. 14) Store brands no longer carry the stigma of the plain yellow box.

According to the New York-based Private Label Manufacturer’s Association, 41% of shoppers identify themselves as frequent store brand shoppers and, in a study of 70 retailers, those that had strong store brands garnered a higher dollar share of the market.

That’s due, in part, to retailers changing their own brand strategy, said Steven Muro, president of Fusion Marketing Inc., Chatsworth, Calif.

“We’re seeing improved packaging and an improved perception of product,” Muro said. “They’re no longer called things like Kroger’s Own or Safeway’s Own. Now they have distinctive names like O Organic.”

Market share of private-label foods and beverages, according to the NPD Group, Port Washington, N.Y., increased from 19.7% in May 1997 to 21.5% in May 2007.

Consumers are starting to understand, Muro said, that many times the private label actually is being packaged by national-brand companies.

A good example, Muro said, comes from Lakeland, Fla.-based Publix Super Markets Inc. and its GreenWise brand. The store launched GreenWise for its natural and organic foods several years ago and now has leveraged it into a total store platform.

Michael Celani, senior vice president of retail sales for Irwindale, Calif.-based Ready Pac Produce Inc., said his company has seen a marked increase in demand from retailers for store brands.

“Absolutely yes — a major part of our growth is coming from store brands,” Celani said. “Most retailers are looking to build their brand and establish, particularly on the fresh side, credibility of their brand.”

Celani said the trend has been growing in recent years but has been accelerating very quickly over the past year.

“There’s more interest today than there was a year ago,” he said.

Celani said interest is across Ready Pac’s entire product line, but it primarily focuses on its packaged salads.

Scott Marboe, director of marketing for Oneonta Starr Ranch Growers, Wenatchee, Wash., said he also has had more requests for store brands from retailers.

“I think retailers are looking for something that sets them apart from their competition in the marketplace,” he said. “Consumer confidence with private labels for the people we pack for is high.”

Oneonta packs bagged apples and cherries SuperValu, Jewell and others, Marboe said.

It can be hard for a new store brand to compete with more recognizable national brands, said Kevin Stanger, senior vice president of sales and marketing for Wada Farms Marketing Group LLC, Idaho Falls, Idaho.

In addition to some store brands, Wada Farms packs under the Dole label, Stanger said.

“The national label is already spending all the money to get consumer awareness,” he said. “If someone just pops a brand new label that a consumer has never heard of, there’s really no value one way or another.”

Stanger said Wada Farms has had more demand for private labels but the market fluctuates.

“Stores can definitely get some brand loyalty to their own product out there,” he said. “We pack a lot of private labels besides the Dole national label. I think that they definitely can be a positive influence.”

Fusion Marketing’s Muro said he expects house brands to become even more popular in the next few months.

“With gasoline prices rising and trouble in the housing market, people’s purse strings are going to be tighter,” he said. “People have the opportunity to pay a little bit more for the national brand or pay a little less for the private label or (a store’s) own brand.”

Private labels show profit power
The Fresh & Easy Neighborhood Markets launched in California by Tesco PLC, Cheshunt, England, use the store’s brand as part of its marketing strategy.