Lying Media Bastards

October 11, 2005

Means of Production

I’ve been meaning to pose this question for a while now: who makes generic supermarket products?

This isn’t some Evening at the Improv, “what’s the deal with airline peanuts?” schtick, it’s just one more stab at understanding this crazy, labyrinthine, murderous American economy.

A few months back, I switched from a Brand Name shaving gel for the cheaper, no-name (well, “Supermarket Name Here” brand) shaving gel. The generic brand did the job just fine, but I did find it to be less thick and less foamy than the other brand. So I compared the labels on the cans, and noticed that nowhere on the generic can did it say who made it. The Brand Name proudly says that it’s made by Edge, while the generic just announces that it’s “distributed by” Safeway Inc.

Now, I have a hard time believing that Safeway Inc. owns the factories for all its generic products: shaving gel, breakfast cereals, toilet paper, soda, etc. Which leaves two options:

1) There exist companies that solely produce generic products and slap a label on them for whatever grocery store wants to sell a generic brand.

2) Brand name companies create parallel, but inferior, versions of their popular products and put grocery store logos on them for the generics. This way they sell all of the Brand Name products they want to people willing to pay the price, and also to people looking for cheaper alternatives, in a quasi-monopoly fashion.

Anyone know the answer?

Posted by Jake on October 11, 2005 8:29 pm

8 Comments »

  1. 75% of the worlds bikes are made in 3 factories in China.

    I think your right with theory number 2.

    Comment by Ella — October 11, 2005 @ 11:49 pm

  2. I’ve often found that generic products contain the same contents as name brand, but with inferior packaging. A good example is plastic wrap. Saran Wrap comes in a box that will hold together pretty much until all the plastic is used up. For the generic, the wrap seems about the same, but the box falls apart before you use up the plastic.

    Comment by David Sturm — October 12, 2005 @ 10:15 am

  3. In England there was a scare when toxic dye (Sudan-1) got into packaged food and alot got recalled. The most shocking thing that came out was the same companies make the food for cheap and expensive supermarket own-brands. More here

    Comment by daniel — October 12, 2005 @ 10:31 am

  4. i think the person who will know - or will find out and tell us all if asked - is steve hannaford of http://oligopolywatch.com/. i’m betting on theory 2, mostly because it fits the logic of oligopoly as that fascinating site lays it out, which is to say: that’s how capitalism likes to work.

    Comment by rozele — October 12, 2005 @ 12:59 pm

  5. during a training session for a job i worked at a supermarket briefly years ago (canada, mind you), we were told by the trainer that the supermarket chain owned the generic brands as well as the name brands. call it #2.

    Comment by jp the apostate — October 12, 2005 @ 8:55 pm

  6. Well, it depends.

    Generic gasoline (Speedway, etc.) is usually made in the same refineries as brand gas, but there are some minor players (Valero, for example). The gas is bought in bulk by distributors (”jobbers”) and sold in bulk to whomever.

    Generic drugs may be made by the same company (Zantac and generic ranitidine both by Glaxo) or by separate companies that specialize in generics.

    Generic beer (by which I mean not the premium label), such as Pabst vs. American or Schlitz vs. Milwaukee’s Best, are often brewed by the same major manufacturers but use lesser quality components, add alcohol, etc.

    When it comes to consumer prodcuts, however you define that, there is no generic answer. Scott Paper makes both Scott brand and no-name store brands, which contain lower grade (coarser, not as white, cheaper) fiber. I don’t know about generic shaving cream, but I’m sure that neither Safeway, WalMart, nor Publix own the manufacturers. They contract the production out and search for cheaper providers.

    Comment by gordon — October 16, 2005 @ 7:16 am

  7. I used to work for a company that made generic soda pop for supermarkets & dollar stores–they just posted different labels on the bottles for different customers.

    Comment by as — October 16, 2005 @ 8:08 am

  8. I think you’ll find that most of the generic products are made by the same companies that make the full quality product. The hint is in the last part of the first sentence.

    Comment by Insiderman — October 16, 2005 @ 9:42 pm

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