Private label products have come a looong way. The once non-descript packaging that we all know and love has transformed into something entirely different over the years by mimicking the style of their branded competitors. The good news is that consumers aren't ashamed to buy store brands anymore. The bad news is that the big boys of the consumer goods industry are beginning to take notice… and they're none too pleased.

With a cadre of billion-dollar brands in its treasure chest, Procter & Gamble (P&G) is one such company that has become very protective of its properties and has vowed to take legal action against private labels that get too close for comfort. P&G has sued two companies in the past three months regarding products that it found to be too similar to well-known brands such as Charmin, NyQuil and Crest. "There are more coming," P&G Vice Chairman of Global Operations Bob McDonald told Reuters. "We spend a lot of time and a lot of money creating our brands and equity of our brands."

According to Reuters, the claims are made regarding "trade dress," or packaging that mimics P&G packaging, and patent infringement. McDonald said P&G is going after companies that violate the patents or put a claim on their packaging that is unsupported by the technology in the private label product. P&G most recently sued Vi-Jon Industries, alleging that Vi-Jon's mouthwash packaging and advertising claims infringe on its Crest Pro-Health oral rinse.

Concerned manufacturers like P&G often approach retailers selling these types of products and more often than not, the retailers claim they don't know about said products that are in violation—the same ones that often crowd their shelves and refrigerators.

A recent study by ACNielsen found that globally 69 percent of consumers questioned believe private label goods are an extremely good value for the money, with 62 percent considering their quality to be at least as good as the big brands.

ACNielsen says that generic offerings, coupled with aggressive price positioning, have evolved to become almost equivalent in quality and closer on pricing in the minds of consumers, particularly the highly developed markets in Europe, the Pacific and North America. ACNielsen also found that refrigerated foods take the private label lead. The category, which includes milk, cheese and complete ready meal products, grew at a rate of nine percent in the two years to May 2005. Private labels now have a global market share of 32 percent in the refrigerated food category. It's a surefire sign that private label is growing far beyond its "low-emotional" goods such as butter, eggs, flour and sugar.

As an older Brandchannel article foresaw, the private label market is rapidly maturing and is taking on more diverse products and services. For instance, Costco's private label, Kirkland Signature, offers tires alongside fresh food and alcoholic beverages. Costco's Cynthia Glaser, vice president and general merchandise manager, Private Label Non-Foods, says Costco will not develop a Kirkland Signature product unless it can make it better and cheaper: "It has to be an item that merits the time and effort that goes into it."

Private label sector…friend or foe?