Store Brands Like Kirkland are Winning the War for Consumer Wallets, Squeezing Out National Brands

From razors to pet food, private label keeps eating retail. For many consumer packaged-goods companies, there's no point fighting it.

The Schick brand has been around for 100 years. Schick revolutionized shaving with injector razors and multiblades in a single cartridge, slugging it out in the marketplace for decades with rival shaving giant Gillette. But today, Schick's owner, Edgewell Personal Care, makes razors not only under the Schick name but for Walmart's Equate private-label brand and Target's Up & Up line.

Those products might appear to compete with one another. But while the different razors are often manufactured in the same factory, different technology, parts and production lines are used, according to Edgewell CEO Rod Little. Moreover, Edgewell $(EPC)$ is currently consolidating four manufacturing plants across its Americas region into one megasite making the various razors.

Little told MarketWatch he didn't believe his company's Schick-branded products were undermined by the shaving products it makes for Walmart (WMT) and Target (TGT). "It gives us scale to be able to compete with Gillette," he said.

Private-label products, which are made by contracted manufacturers for retailers that sell them in stores under their own names and logos, are steadily extending their reach into the consumer packaged-goods market. U.S. retailers' private-label brands, like Costco's Kirkland and Walmart's Great Value, are now serious competitive threats to Procter & Gamble, PepsiCo and other household-staples stalwarts, industry experts say. Retailers keep investing in producing higher-quality goods, which helped private-label products generate sales in the U.S. of around $245 billion last year, according to data from market research firm Circana, up from $184 billion in 2020.

Roughly one in five products that Americans buy on retail-store shelves today is a private-label product, Circana data show. These private-label products, which are generally cheaper than national brands like Tide and Doritos, have made it easier for consumers to keep spending as prices for basics rise, propping up economic growth. As more shoppers buy the store brands, the balance of power between retailers and manufacturers keeps shifting in the retailers' favor, analysts say.

Private-label competition has strengthened in 'pretty much all of our categories' over the past year. 'They [have been] stealing share.' Dana McNabb, General Mills

"We had seen private label get stronger in pretty much all of our categories" in the last year, Dana McNabb, chief operating officer of Cheerios maker General Mills $(GIS)$, said during a post-earnings-report conference call in July. "They were stealing share."

As private label grabs a bigger slice of the retail market, the older, bigger consumer packaged-goods makers are now left with a choice: beat the retailers or join them.

Both paths come with potential pain for established brands. Beating retailers means competing with a sprawling web of smaller, largely unknown manufacturers that can develop products more quickly, leaving retail chains with room to experiment with the latest trends, be it protein or hot honey. Moreover, even a consumer-goods manufacturer's boldest creations can be mimicked by a retailer's private label.

As for joining them? National-brand manufacturers may or may not want to make private-label products for stores, but it's an open industry secret that they often do. Those collaborations risk steering customers away from the things those producers are in business to sell, and leave them vulnerable to the strategic and complex decisions big retailers make around shelf space.

It's not just razors. Similar overlap can be found elsewhere. Bottled-water maker Niagara told MarketWatch it makes private-label product for grocery chain Kroger and other big retailers; indeed, its logo can be found on the plastic water bottles sold under Kroger's $(KR)$ store brand. Similarly, the packaging on some Wegmans bottled water sold at Wegmans Food Markets locations says it's bottled in a plant in Johnstown, N.Y., run by the company that makes Crystal Geyser bottled water. Crystal Geyser and Wegmans did not respond to requests for comment.

' "Frenemy" is a good way of thinking about it.'Jeff Dotson, Ohio State University

Costco (COST), meanwhile, states on its website that all of its Kirkland dry pet foods "are made by Diamond Pet Foods in five company owned manufacturing facilities."

" 'Frenemy' is a good way of thinking about it," said Jeff Dotson, a marketing professor at Ohio State University. "It's an adversarial-cooperative relationship between manufacturers and retailers."

How consumers gravitated toward private label

When Jeff Strong joined Procter & Gamble (PG) in 1988, the widely accepted blueprint for a retailer's success was simple: Load the shelves with popular items sold and marketed nationwide. At that time, many private-label products in America were still cheap, generic, bottom-shelf fare - recall the beer that came in yellow cans that simply read "BEER" on them - and they did not seriously compete with branded products.

By the early 2000s, though, management at P&G started to become worried, Strong said. In Europe some retailers were putting up big sales gains, but not by selling chips made by PepsiCo's $(PEP)$ Frito Lay or P&G essentials like Bounty that shoppers could find anywhere. Instead, they were bypassing those consumer-goods behemoths and designing and selling cheaper alternatives themselves, under private-label brands that were only available at their stores.

P&G asked Strong, then the marketing director for Pampers, to compile a report on the private-label threat. The report concluded that private labels wouldn't necessarily kill big legacy players, and that danger depended on the product and the country, he said. But it suggested bigger risks ahead if the world's largest chains decided, one day, to stock their shelves with more products bearing their own names that competed directly with P&G brands. A color-coded world map in the report plotted out that threat: green for lower-risk countries, where retail consolidation was low, and red for higher risk.

The U.S., where large retail chains were taking greater control of the market, was among the countries labeled red, Strong said. P&G said it couldn't comment on the matter.

In the decades since, U.S. retailers' in-house brands indeed became a bigger threat for P&G, PepsiCo and other consumer-goods behemoths.

Strong left P&G in 2008, worked at Johnson & Johnson $(JNJ)$, and, in 2011, landed at laundry-detergent maker Sun Products, where he ran the company's private-label business. Along with names sold around the country like All detergent and Snuggle fabric softener, the company also made detergent for Costco's Kirkland and Member's Mark at Sam's Club, albeit with different formulations, he said. Those products were often shipped to retailers on the same trucks, he said. The company had plants in Salt Lake City and in Bowling Green, Ky., that made both the national-brand and store-brand products, he said.

Combining national brands like All and private-label alternatives under one umbrella was the point. It was a way to make both kinds of products for different customers in different places. At times, the private-label products received better treatment.

"The product we made for Costco that was sold under the Kirkland Signature label was significantly higher quality than All," Strong said.

Every retailer today wants its own version of the Costco private-label success story Kirkland.

Henkel, a company that makes adhesives as well as laundry and hair-care products, bought Sun Products roughly a decade ago. Henkel declined to comment on Sun's old factories and the products made there. Costco did not respond to questions about its Kirkland brand for this story.

Retail analysts point to two developments that accelerated the rise of private-label products. The first is the enormous success of Kirkland, Costco's private label, which emerged from an effort to consolidate dozens of store brands under one name. It was a revelation, and a wake-up call, for fellow retailers.

The products sold under the Kirkland label, from groceries to golf balls, are cheaper than products sold by national brand names. But they're often just as good, and often just down the same aisle at Costco stores. Now, every retailer wants its version of Kirkland.

Retailers like private-label products because they allow the chains to undercut competitors on price, control production and advertising costs, and deliver fatter margins, retail analysts say. Since stores' private-label fare sells for less than nationally marketed offerings, shoppers, historically, have flocked to them whenever the economy slumped, and away from them when the economy strengthened.

That changed during the "great recession," an event some analysts see as the second game changer for private-label offerings. Ricky Volpe, a professor of agribusiness at Cal Poly San Luis Obispo, said the popularity of private-label products rose during that downturn, which lasted from 2007 to 2009. But even after the economy recovered, he said, consumer demand for private-label products held steady.

"In my mind, that was the great awakening nationally for private label," Volpe said. "It created a new generation of American shoppers that are at least open to the idea of private label, if not loyal to them."

MW Store brands like Kirkland are winning the war for consumer wallets, squeezing out national brands

By Bill Peters

From razors to pet food, private label keeps eating retail. For many consumer packaged-goods companies, there's no point fighting it.

Those products might appear to compete with one another. But while the different razors are often manufactured in the same factory, different technology, parts and production lines are used, according to Edgewell CEO Rod Little. Moreover, Edgewell (EPC) is currently consolidating four manufacturing plants across its Americas region into one megasite making the various razors.

Private-label competition has strengthened in 'pretty much all of our categories' over the past year. 'They [have been] stealing share.' Dana McNabb, General Mills

"We had seen private label get stronger in pretty much all of our categories" in the last year, Dana McNabb, chief operating officer of Cheerios maker General Mills (GIS), said during a post-earnings-report conference call in July. "They were stealing share."

As private label grabs a bigger slice of the retail market, the older, bigger consumer packaged-goods makers are now left with a choice: beat the retailers or join them.

It's not just razors. Similar overlap can be found elsewhere. Bottled-water maker Niagara told MarketWatch it makes private-label product for grocery chain Kroger and other big retailers; indeed, its logo can be found on the plastic water bottles sold under Kroger's (KR) store brand. Similarly, the packaging on some Wegmans bottled water sold at Wegmans Food Markets locations says it's bottled in a plant in Johnstown, N.Y., run by the company that makes Crystal Geyser bottled water. Crystal Geyser and Wegmans did not respond to requests for comment.

' "Frenemy" is a good way of thinking about it.'Jeff Dotson, Ohio State University

Costco (COST), meanwhile, states on its website that all of its Kirkland dry pet foods "are made by Diamond Pet Foods in five company owned manufacturing facilities."

" 'Frenemy' is a good way of thinking about it," said Jeff Dotson, a marketing professor at Ohio State University. "It's an adversarial-cooperative relationship between manufacturers and retailers."

How consumers gravitated toward private label

By the early 2000s, though, management at P&G started to become worried, Strong said. In Europe some retailers were putting up big sales gains, but not by selling chips made by PepsiCo's (PEP) Frito Lay or P&G essentials like Bounty that shoppers could find anywhere. Instead, they were bypassing those consumer-goods behemoths and designing and selling cheaper alternatives themselves, under private-label brands that were only available at their stores.

The U.S., where large retail chains were taking greater control of the market, was among the countries labeled red, Strong said. P&G said it couldn't comment on the matter.

In the decades since, U.S. retailers' in-house brands indeed became a bigger threat for P&G, PepsiCo and other consumer-goods behemoths.

Strong left P&G in 2008, worked at Johnson & Johnson (JNJ), and, in 2011, landed at laundry-detergent maker Sun Products, where he ran the company's private-label business. Along with names sold around the country like All detergent and Snuggle fabric softener, the company also made detergent for Costco's Kirkland and Member's Mark at Sam's Club, albeit with different formulations, he said. Those products were often shipped to retailers on the same trucks, he said. The company had plants in Salt Lake City and in Bowling Green, Ky., that made both the national-brand and store-brand products, he said.

"The product we made for Costco that was sold under the Kirkland Signature label was significantly higher quality than All," Strong said.

Every retailer today wants its own version of the Costco private-label success story Kirkland.

MW 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.