When I started budgeting, I discovered I spent $800 a month on food just for me and my son. I know he's a growing boy, but let's face it — $800 a month for food is a lot of money for the two of us. I knew it was one area where I could make the most improvement, and I decided to buy generic brands to save money.
I am by no means a blazing a new trail here. A lot of people save money every month when they buy generic or store brands. I know some people swear by brands, and that is OK. We like what we like. If you know somebody who loves Jif peanut butter, then you know they are not going to eat another major brand, never mind a generic or store brand. But you should at least try them, here's why:
- They are growing faster than major brands
- Their business model eliminates a lot of expenses
- How I personally save every month buying generic brands
When I say generic brands, I am also referring to store brands or private labels. Back in the 1970s, grocery stores started selling a no-name brand. It didn't matter if it was a can of peas or a box of cereal, the packaging was the same: A white package with black lettering. While the packages were not attractive, the prices certainly were. And, people bought the, allowing them to pocket savings every time they picked up one of those no-name products.
Generic brands are growing faster than major brands
Retailers, grocery chains in particular, started creating store brands. Food distributors started their own private labels that they offered to grocery stores that didn't have their own line. The Private Label Manufacturers Association did a survey and reported in 2018 that private label sales reached $5.5 billion. This was a jump of 4.4 percent. Would you be surprised to learn it was four times the growth of major, national brands? When you look at sales figures for store brands, it was $129 billion. The PLMA believes there might be another $40 billion in sales that were not included in the survey. That's a lot of money being spent on generic, store and private label brands.
The survey also showed most people like us regularly buy generics, store brands and private labels. Part of the reason why is because they are produced under very high standards. They are made following the same quality standards at the national brands. What I find funny is when you look at some of these relatively unknown brands sold at discount grocery chains, like Save-a-Lot or Aldi, is that the packaging sometimes have the same colors and similar designs as the major brands. This is kind of funny because when generics burst on the scene, the package design was non-existent.
Here is something you might not have known: Sometimes those national brands manufacture products for store brands. So, you are getting the same, exact quality as the major brands. There are some Walmart stores, and it depends on what region the stores are in, that sell Great Value salty snacks like potato and tortilla chips that are made by Frito Lay. So, instead of paying $3 or $4 a bag, you will pay closer to a buck a bag. Not bad, right?
The business model of generic brands cuts a lot of expenses
So, you might be wondering, how in the world can companies make these products that have a similar taste and similar quality for 30 to 60 percent less. It comes down to this: Marketing. Think about how expensive it is to hire a creative team to come up with a marketing and advertising campaign; then produce high quality video for ads that will run across the country on national television networks, regional networks, local stations, cable channels, and the internet. Then, think about all the radio networks and radio stations. Then, there are national, regional and local magazines and newspapers. This is millions and millions of dollars each year. Guess who pays for all of that marketing and advertising? That's right, we do.
The companies that manufacture the products under generic, store or private labels do not have to spend money marketing. They just need to get to trade shows and pitch their products to food distributors, wholesalers, brokers and grocery chains. They pass these savings on to you.
How I save money every month
I hope you are beginning to see that when you buy generic brands, you are not really sacrificing taste or quality. In fact, sometimes the generic is the exact same product as the national brand. Here is my recipe for saving money with generic brands:
- Be willing to try them
- Return them if you don't like them
- Compare the cost per ounce
Be willing to try them
If you are in the minority and have issues with buying anything other than a national brand, do yourself (and your budget!) a favor by at least trying them. You truly have nothing to lose.
Where I live in Washington state, there is a major dairy producer that sells half-and-half cream. You know that I love a little coffee with my half-and-half. Well, when I went to Walmart and compared the ingredient lists of the Great Value brand with the major brand in this area, the nutritional information was the same, and the ingredients were the same. It's not too much of a leap to think they are the same product. The Great Value brand has a great taste, and I can save about 30 percent when I purchase it.
If you have a child in school like I do, then you know how frustrating it can be having to buy over-the-counter medication all the time to help your child battle the germs and illnesses at school. I buy generics and save 20 to 30 percent. The same applies to napkins, tissues, toilet paper, freezer bags, and other staples.
Return them if you don't like them
Grocers really want you to try their store brands that they are willing to put their money where their mouth is. Many of them have a guarantee that if you try their store brand and do not like it, then you can return it, and they will replace it with the national brand. There might be some national brands that generics might not be able to touch in terms of taste, but at least try. That's all I ask.
Think about it, if you are saving from 50 cents to $4 on every generic you purchase, that quickly turns into real cash. That means there is more money you have to pay off your debt, invest in a mutual fund, or save for a rainy day or vacation. When I look at the generic vs. major brand, it just makes sense (or should I say “cents”) to buy generic brands.
Compare the cost per ounce
My son loves to eat a fruity cereal for breakfast. The price tag for the major brand is actually about $2 less than the generic, but I always buy the generic. This is why: The national brand cereal is 20.5 ounces, and the generic is 40 ounces. If I am just looking at the price tag, I would ignore the generic. However, when I compare the price per ounce, the name brand is 18.4 cents per ounce, and the generic is 14.5 cents an ounce. So, I am saving more than 20 percent when I buy the generic that tastes just as good. It's a no-brainer decision in my house.
I have found generic canned vegetables for about half the cost of the major brand. If you can tell the difference between the two, your taste buds are way more sophisticated than mine. I realize when it comes to food and taste, we have different personal preferences. I get it that the final decision is going to be up to you and your taste buds, but it doesn’t hurt to try these generic brands. You will end up saving money like I have.
If you are willing to try these, the good news is there is no shortage of retailers who offer generic products, whether it is a regional grocery chain in your area, a major retailer, or a drug store. There are so many opportunities to save.
What are some of the discount stores you like to shop and find good deals? I do shop a lot at Walmart because their Great Value and Equate brands can save me money. However, Walmart doesn't have sales — they boast about always having low prices. But, there are times when your local grocery store will have nice sales where you can buy name brands cheaper than the generics. So, be good shoppers and always look for the deals … and savings!
One place I look for deals and savings is Dollar Tree. Don't laugh and don't judge me! You know you like Dollar Tree, too. There is just something about being able to buy all this stuff for a dollar. If you have been in a Dollar Tree, which has been growing ever since the Great Recession, then you know you can get national brands, regional brands, and generic brands. Part of the fun of going into a Dollar Tree is to see what deals you can find.
Did you know you can order items from Dollar Tree online, and they will ship it to your store free of charge? I know someone who walks her dog two to three times a day. If you are going to be a good citizen, then you better carry a little bag with you to take care of any messes. Well, she goes to Dollar Tree's website and orders these little bags by the case and doesn't worry about it for months. If you have a dog, then you know how expensive these bags are at pet stores and other retailers. She is saving about $3 or $4 per unit. Dollar Tree offers some extreme savings, and, yes, those bags are generic.