Due to the incessant downsizing of the major branded companies, there is enough experienced and knowledgeable talent available for recruitment to enact change.In the last decade or so, it has never been the case that private label did not know how to develop new product features. It was simply that they were not able to afford them.When the branded companies routinely make a two to three times greater margin, private label companies need to find means to afford larger product development and market research budgets to truly bring sustainable and cost effective innovation into their product lines for their key customers.
As doing this has always been a profitability balance by the private label producers, the trade will need to re-evaluate their profitability models and review the volume (share) versus profit equation in more absolute net terms.Further financial incentive is needed for private label to invest in technology and product development catering towards matching performance and not just precise appearance to the branded products.
Rick Jezzi is a chemical engineer with experience in the areas of tissue manufacturing, nonwoven, and personal care absorbent products while at Scott Paper, Kimberly Clark and Paragon Trade Brands where he was involved in technical development and the expansion into Asia and Latin America. Before retiring from Clopay Plastic Products Company as vice presient of R&D and general manager of South America and Asia Pacific, he managed technologies in Hygiene, Medical, Industrial and New Business Development, as well as managing global M&A and JV’s. He now consults in the areas of his expertise and can be reached at email@example.com.