What is White Brand? Definition of White Brand, White Brand Meaning and Concept
The brand white is a line of generic products the retailer sells under its name. That is, these merchandise are usually marketed under the logo of a commercial establishment.
In other words, when we talk about a white line we refer to those items that the distributor, such as a supermarket, offers with its own distinctive.
These products are characterized because the packaging and design is simple. In addition, the price and quality of the good is relatively lower compared to the rest of the market.
To understand it better, let's imagine the case of a private label detergent. This product does not belong to a cleaning supplies company, but is sold under the name of the supermarket, for example 'Metrópoli', and is sold exclusively in that establishment.
Origin of the white label concept
Private labels had their origins in World War II Germany. In this difficult stage, consumers stopped paying attention to popular brands, favoring the purchase of low-priced products without a well-known logo. Later, the trend spread to other countries such as the United States or France, especially in the seventies.
In the case of Spain, the Simago supermarket chain was the one that imported this trend around 1977. The origin of the name “white” brand comes from the use of white containers where the label indicated the category (detergent, milk, sugar, etc.) to which the product belonged.
Evolution of the white label concept
Initially, private label goods covered only the basic food and cleaning product categories, such as detergent. Their focus was on offering lower-quality items than well-known companies, but also at a much lower price.
With the passage of time and increasing competitive pressure, private labels have evolved to become higher quality products, with more sophisticated packaging. In addition, the offer is expanded to include goods that are not in the basic basket.
In other words, private labels have on occasion become what we call our own brands or distributor brands that are not necessarily of lower quality and can exert relevant competition for companies in the sector.
Advantages and disadvantages of private labels
Private brands have several advantages and disadvantages, depending on the economic agent affected:
- From the distributor's point of view : The distributor can receive higher profits than if he sold only well-known brands. In addition, you can build consumer loyalty and gain greater bargaining power with suppliers. However, the disadvantages come from the fact that running a white label involves assuming the costs and risks of management. This increases the workload of the dealer.
- From the consumer's point of view : The consumer can benefit from a lower price and greater variety due to competition. However, the opposite effect can occur if distributors begin to exercise market power by excluding traditional brands.
- From the point of view of the private label manufacturer : The distributor entrusts the production of his private label to a third party. This company, if it manufactures in large volumes, can take advantage of the generation of economies of scale, that is, the cost for each new unit produced is increasingly lower. However, the downside is that this producer ends up relying heavily on the retailer's demand.