Welcome to the home of Noah Brier. I'm the co-founder of Variance and general internet tinkerer. Most of my writing these days is happening over at Why is this interesting?, a daily email full of interesting stuff. This site has been around since 2004. Feel free to get in touch. Good places to get started are my Framework of the Day posts or my favorite books and podcasts. Get in touch.

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Name-Brand versus Store-Brand

Consumer Reports did a taste test of 29 store-brand and name-brand foods and found 23 of the 29 store brands tasted as good or better. Now this is only moderately interesting in and of itself, but what got me was this explanation of why there was a price difference: “Price gaps have less to do with what goes into the package than with the research, development, and marketing costs that help build a household name.”

So basically the price difference is marketing and innovation. But if store brands continue to eat away at market share, what’s incentivizing name brands to keep pushing new ideas? It’s an interesting conundrum (and one that the pharma industry spends a lot of time thinking about). I’m not totally sure what the answer is, but I know as far as over-the-counter medication goes, there have been pushes in innovative package design (basically making the product look like it should cost more money). I guess the flip side is that the store-brands start to become more like name-brands and start spending the marketing/research money as well, thereby making everything meet in the middle … Anyway, just something I’ve been thinking about. (Oh, and as a side note, I always forget that Consumer Reports owns Consumerist, that’s pretty awesome.)

September 2, 2009