Private labels are brands which are not owned by a manufacturer or producer, but by a retailer or supplier. This retailer or supplier asks a contract manufacturer to produce goods for him under his own label. Additional terms used include store brands or private brands.
Traditionally, private labels entered the market as a low-cost alternative to national brands. Today, they are part of active retail marketing in order to position their products ideally on the market and not to be exclusively dependent on suppliers of national brands. Retailers may benefit from the many advantages of private labels, especially from the fact that they have more control over product and service pricing. In addition, they may offer their goods at a lower price as retailers do not have such high marketing and advertising expenditures as their brand counterparts, in turn benefiting consumers and saving them money.
Nowadays, private labels are present among a wide range of industries and are gaining more and more market penetration, especially in Europe, where private label share is approaching almost 50 percent in some markets. In the U.S., the private label market remains quite fragmented. Food categories with a large private label share include milk, sugar and sugar substitutes and fresh eggs.