Store brands like Kirkland are winning the war -2-

Waves of investments in store brands followed, as retailers tried to make them stronger competitors. In the process, private-label brands shook off their reputation as cheap copycats. Store chains put more effort behind the appearance of their private labels. They brought in minimalist and retro aesthetics, and matte finishes, to craft packaging that read as upscale, making for clean, consistent visuals across aisles. Store-brand equivalents for cold medications, like Nyquil, often placed next to the original, got good enough and similar enough that shoppers often didn't even make a distinction between the two.

In 2009, online retail bellwether Amazon (AMZN) waded in with AmazonBasics, and through the 2010s it pushed ahead with private-label coffee, clothing and other products. Whole Foods' 365 label sought to impart both premiumization and value, while Target's Goodfellow & Co. clothing line tried to keep up with trends in men's fashion. When the pandemic mangled large producers' supply chains, store brands were sometimes the only option on shelves, drawing more shoppers into the retailers' fold and keeping them there, some research has shown.

'A new era in which traditional brand loyalty becomes less significant'

Making store brands as good as their household-name counterparts hasn't been easy. Nick Scheidler, the vice president of product development for the private-label Member's Mark brand at Walmart unit Sam's Club, has been overhauling Member's Mark's food and drinks to remove artificial flavors, high-fructose corn syrup and a few dozen other ingredients, as customers began asking for food with fewer processed additives.

The task required Member's Mark to reformulate and relaunch more than 800 products. Getting the color and appearance right for the icing on cupcakes alone required a nearly thirtyfold increase in natural ingredients.

"We've had to spend years, in some cases, to get the product quality and the ingredients up to the standard that our members help us set," Scheidler said.

Such a sophisticated effort would have been unthinkable for a private-label brand not long ago. Much of the effort also fell on the suppliers of Member's Mark products, who had to grapple with complex changes, like supplying the new ingredients.

"Were there difficult conversations? Absolutely," Scheidler said. Member's Mark finished the ingredient overhaul for the products in December 2025, Scheidler said.

Retailers like Sam's Club now have more tools at their disposal to beat legacy consumer-goods makers at their own game. Along with heaps of data on shoppers and an increasingly sophisticated digital advertising network, they have a fleet of smaller contract factories that can make pretty much anything and are eager for the business.

Retailers are now using their store brands to try new things, such as "functional" foods and pizza with cauliflower crust, while pursuing bigger wellness ambitions and products that appeal to the "Make America Healthy Again" movement. As a result, consumer-goods companies, despite a deep culture of market research, are sometimes getting beat by retailers to the latest trends.

That was particularly true in areas like saltier snacks, said Jocelyn Carter, senior strategic marketing director for private label at ingredient developer Kerry. "They aren't waiting for big national brands to move," she said. "They are moving ahead of national brands to meet some of those MAHA requirements and meet new consumer demand in the space."

That incursion of private-label brands can be felt across the consumer-goods landscape. It was cited as a factor in the bankruptcy filing last year of Del Monte (DMC), a 140-year-old producer of canned fruit and vegetables. In March, shares of energy-drink maker Celsius (CELH) fell after Costco launched similar energy drinks under its Kirkland brand. This month, convenience-store operator Casey's General Stores (CASY) said big potato-chip makers had "priced themselves out of the market" in hiking prices over recent years, while the chain's own store brands were growing.

PepsiCo this year slashed prices on snacks like Doritos, Tostitos and Cheetos by up to 15% after customers complained that they were too expensive. The company's most recent financial report to investors, however, showed slumping sales in its North American foods segment, as the consumer slog against inflation continued. General Mills, too, has tried to make its products less expensive.

Pepsi and General Mills did not respond to requests for comment.

Retailers have also rushed to the courthouse to sue over competing private-label snacks. Last year, Mondelez sued the discount grocery chain Aldi, which largely sells private-label goods, claiming its packaging "blatantly copies" that of such Mondelez (MDLZ) products as Oreo and Chips Ahoy cookies. Aldi denied the allegations in a court filing. Neither company responded to a request for comment.

J.M. Smucker (SJM), meanwhile, filed a similar trademark-infringement lawsuit against Trader Joe's, another store-brand-heavy grocery chain, accusing the retailer of copying its Uncrustables sandwiches. In a court filing, Trader Joe's asked a federal judge to dismiss the lawsuit, saying the appearance of Smucker's sandwiches "are no Nike swoosh (NKE) or McDonald's (MCD) golden arches." Trader Joe's and Smucker did not respond to requests for comment.

In 2025 volume for U.S. private-label goods - or the number of items sold, which is sometimes seen by analysts as a purer measure of demand than dollars' worth of sales - rose 0.6%, according to Circana and the Private Label Manufacturers Association. For national brands, it fell 0.6%. That trend continued through mid-June of this year.

Even as consumers wrestle with higher costs of living, a report from Circana in February found that store-brand momentum had stretched "beyond inflationary periods," after price increases eased briefly last year. That trend, the firm said, represented "a direct challenge to name brands."

Morgan Stanley analyst Simeon Gutman has said he expects private-label sales to jump 40% to $462 billion by 2030, as store brands become more inventive with healthier ingredients, such as products with no seed oil, and premium offerings like lobster ravioli.

"We may see a new era in which traditional brand loyalty becomes less significant compared to product quality and cost effectiveness," he said.

Complicated collaborations

Jason Brasher, an innovation manager at Mizkan America, which makes Ragu and Bertolli tomato sauce, said consumer-goods manufacturers are trying to stay ahead with research and development that leads to new products. Executives at other branded-goods companies in recent months have talked up their newest concepts: silk diapers, Doritos with protein, Pepsi with fiber, Capri Sun with electrolytes and "hydrating" hot chocolate.

But product development at larger companies is slow and rigid, often getting gummed up in corporate bureaucracy, Brasher said. Many companies, he said, meet monthly to hash out ideas. If someone in one of those meetings, for example, doesn't like the way a label looks, fixing the issue can be pushed out a full month. Delays and back-and-forths add up.

Meanwhile, Kerry's Carter said, retailers are taking their own ideas to shelves faster. Projects that took 12 to 18 months to develop three years ago now take as little as six months. Retailers used to test a store-brand product in a few dozen stores. Today, Carter said, she's seen a bigger willingness to take chances.

"They're just dropping it in, and they're trying, and they're failing fast," she said. "National brands can't do that."

Strong, the former P&G executive, added that when a consumer packaged-goods company comes up with an amazing, innovative product, it knows the retailers that agree to sell it on their shelves might eventually try to imitate it.

Recall announcements that MarketWatch reviewed shed light on which national brands may have made private-label products.

Collaborations between retailers and manufacturers are rarely discussed openly, and often subject to nondisclosure agreements, according to lawyers who spoke with MarketWatch. Recipes, production and technology between store brands and their counterparts often differ, retail analysts say. But they note that companies generally don't want consumers knowing that a bag of pretzels with one brand name on it and a different bag that looks like it's made by a rival come from the same place.

Analysts say joining forces with retailers to make their store brands can help manufacturers build goodwill, keep the factory lines humming and give the biggest consumer-goods producers a way to explore new markets and keep the pressure on branded rivals. But margins on sales are lower, and those manufacturers, to a degree, risk competing with themselves.

Some names, like Starbucks, Reynolds and Kirkland, have tried to ride one another's coattails. In the past, some of Kirkland's roasted coffee beans said on the packaging that they were roasted by Starbucks (SBUX). The Reynolds (REYN) logo appears on boxes of Kirkland's foil wrap. Starbucks declined to comment. Reynolds, in a statement, said it was "intentional about operating both branded and store brand businesses, and we see them as complementary."

Recall announcements that MarketWatch reviewed also shed light on which national brands may have made private-label products. In 2021, salad-mix maker Fresh Express said it would recall branded and private-label salad products made at its plant in Streamwood, Ill. A list of products affected showed those under the Fresh Express name, as well as Walmart's Marketside and Albertsons' O Organics. A Conagra Brands recall in 2023 connected to a plant in Fort Madison, Iowa, affected its Armour Star Vienna sausages as well as those made under private labels sold at Kroger and Walmart.

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09-16-26 0830ET

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