Here's the key point:
According to Pecoriello, Dean Foods [DF 10.34 -0.19 (-1.8%) ], the nation's largest dairy company by revenue, ranked at the top.
The impact of private-label's encroachment has already left its mark on Dean. The company's shares have fallen sharply since the company reported a 43 percent decline in first-quarter profit earlier this month, citing market share gains of store-branded milk for its disappointing results.
According to Dean's CEO, private-label competition is making it difficult for the company to raise prices and improve its profitability.
Any astute consumer knows the "private label" is the same as the branded product - the plant number tells you what you need to know.
Is there anyone who cannot comprehend this simple fact, stores know there is no difference. Hence, the branded milk and the store brand are priced exactly the same to the store. The main exception to this is when the container is different, which is not often.
All the media picked up the Dean excuse, because it sounded so logical. That processor margins may have dropped could be, but, the margins have nothing to do with store labeled milk.
Does'nt Dean do a lot of private labling? Private label products seldom have their own processing plants so who is Dean competing with? Their profits were down solely because they were compared to 2009 when they were raping the consumers and the farmers.
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