Eliminating BrandTax (TM)
Brandless is a startup hoping to disrupt the grocery industry with its recently launched non-brand brand. Everything, from organic dried mango to vitamins to pizza cutter, is $3.
It is hard to resist products that check off boxes for health-conscious consumers: foods with organic ingredients, no artificial preservatives, cruelty-free and those that are purged of hundreds of “potentially harmful ingredients”, without paying extra for the costs of packaging, marketing, and advertising.
Don’t be fooled. Brandless isn’t really doing anything new than what everyone is already doing: building a brand that represents the qualities consumers care about - price, quality, environmental impact. Addtionally, they are tapping into an underlying trend among younger generations who are more interested in spending less on private label goods.
Many companies are benefiting from the removal of “BrandTax”, a term trademarked by Brandless. Whole Foods’ exclusive private label products like packaged foods, personal care, and pet supplies have a loyal following among customers of the chain’s 470 stores, accounting for 15% of the company’s annual revenue. The brand’s physical footprint and its investments in private label were reportedly key drivers of the Amazon acquisition earlier this year.