The Impact of Food Environment on Private Label versus Branded Produce Choice

Abstract

Abstract Over the past two decades, retailers are providing more Private label foods (PL), which are directly competing with the National brand (NB) products. For years, PLs competed as generic and cheaper versions with their high-priced NB substitute. However, modern PLs have improved in product quality relative to NBs and are available in the premium, organic, and even produce sections with the goal to distinguish themselves from their competitors’ product lines. One of the fastest growing segments in the produce industry consists of triple-washed cello-packed spinach. Using a two-step Heckman model, we determine the impact of household purchase information, demographics, and food environment on PL spinach purchasing behavior. Given its regional dominance with regard to spinach production and fresh spinach consumption, we focus on households residing in the U.S. West. Results show that food environment is the main driver for PL spinach purchases. We determine that specialty stores might be traditional channels for purchasing organic PL spinach, while supercenters might take the role of the main outlet for conventional NBs. An understanding of what factors might encourage increased consumption of healthful foods is important to producers and marketers for developing effective strategies in order to reach beyond the traditional consumer base.