Private Label Use By Small Companies
Another use of private labeled products that has seen good growth is by small companies. Small companies usually do not have any input in the recipes or packaging of the products they buy. These small companies buy from a specialty food company that uses their recipes and simply label for the individual retail store. The reasons small companies look at branding products with their name is for the advertising benefits they receive. For example, if John's Farm Market sells jams or salsas with the John's Farm Market label, each time the consumer uses the product they are reminded of their visit to John's Farm Market. If the private labeled products are really good they will have to return to John's Farm Market if they want more of that particular product. Another benefit John's Farm Market receives is if someone gives that private labeled product away as a gift. This introduces another potential customer to the products carried at John's Farm Market. For this reason private labeling by small companies is a sought-after marketing plan.
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