Don’t be deceived by “brand-named” products?

I noticed that we who are of little means (financial) love to chase ‘brand-named’ products while those who have much go for generic products. But not only do they go for generic products, they invest in the stocks of the companies producing the branded products and make more money from our desire for brand-named products.

Now here is my experience with branded products and why I am advising that the idea of branded product is another conspiracy to transfer resources from the poor to wealthy.

In my previous life, I worked as a Staff Accountant for a private cereal manufacturing company (name withheld). It was during my time here that I discovered that branding could be a farce and because we are not smart, we are robbed.

As a cereal company, we made lots of efforts to get our products in Wal-Mart, Sam’s Club, Costco, and Cub Foods. Getting shelf space in these outlets is a big deal and as part of the negotiation, these outlets usually ask you to consider producing some products for them with their name on it (their brand). Usually these big companies agree to do that and we classified these products as “private labels” because we are producing them for companies other than ourselves.

During the production process, there is no way we can change the formula for the products. We cannot use less wheat, less sugar, or less flavor. To attempt to do that will cost us more to produce the product because it might mean that we have to get a whole new boiler or steamer or drier. It is usually cheaper for us to use the same production line and same mix to produce the product. It is only the package that we differentiate. We print a different box or bag for the private label cereal.

So whenever you go into the Cub Foods or Sam’s Club and you see that ‘honey oats’ cereal with Sam’s Club on it and then you see the ‘honey oats’ cereal with General Mills but the GM product costs $2.50 more, just know that they are the same cereal in box: it is only the packaging. I am sure you know that Sam’s Club doesn’t have a cereal producing plant. The Sam’s Club cereal was produced by either GM or Kellogg but packaged for Sam’s Club because as part of the deal to get shelf space, Sam’s demanded that GM produce for them.

But sometime we deceive ourselves that they taste different and that GM’s cereal is better than the Sam’s Club’s cereal. This is a lie because all of those cereals came from the same production line. It is only the packaging that is different.

So you see how they can deceive us about branded product and rob us of our meager resources?

Well, so now you know what I know and why I deal in “authentic” fake….

Author: JAMES F. KOLLIE

I am a Liberian professional with passion for pro poor economic development and grassroot political organizing. I have read public policy, corporate finance and accounting at various levels. I have worked in government, private sector and non-profit sector. View all posts by JAMES F. KOLLIE