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What are the Advantages and Disadvantages of White Label Products?

Mary McMahon
By
Updated May 16, 2024
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White label products are products which are manufactured in a central facility and then labeled with a variety of company names. For example, a manufacturer that makes trail mix might make a large batch of trail mix, package it, and then divide the batch into groups which will be labeled “Company A Brand Trail Mix,” “Company B Brand Trail Mix,” and so forth.

The term "white label" is a reference to a practice once widely used by many disc jockeys and aspiring musicians. To conceal the identity of the company that pressed a record, people would peel the old label off and put a generic white label over it.

Many stores use white labeling to build brand loyalty. For example, by using white labeling, grocery stores can create a line of store-branded products, and because white label products are often less expensive, consumers are encouraged to buy them. Therefore, consumers start to get attached to the store's brand, making an active effort to shop at that particular store and to purchase its products when offered a choice between several labels.

For companies that make white label products, the practice has some distinct advantages. These companies can focus on keeping production costs down, rather than on marketing, because these products have a built-in market. Instead of having to seek out stores to carry their products, white label manufacturers can wait for customers to come to them. They can also streamline production by producing huge batches of products.

For consumers, white label products have advantages and disadvantages. One distinct advantage is that these products tend to be much cheaper than name-brand products, and sometimes the quality is comparable. However, the disadvantage is that it is harder to get information about the products and the companies that make them.

Lack of information about a product can be problematic. For example, people with severe nut allergies like to avoid products manufactured in facilities which contain nuts, and this information may or may not be disclosed on a white label product. Other consumers want to practice ethical buying habits, and because the manufacturer of a white label product is often not disclosed, they have no way of telling whether or not the product fits in with their values.

Given the growing number of recalled products, white label or generic products are a growing hot topic for many consumer activists. Because many manufacturers keep the identity of their clients secret so that customers of Company X don't realize that they can get the same thing from Company Y, it may take some time to notify all of the people who have purchased a product about a recall. In cases where white label products go through multiple companies, it may be impossible to inform everyone about a recall. In addition to being potentially dangerous, this can also be frustrating for consumers.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By cafe41 — On Jan 20, 2011

Latte31 - I know that soda tastes different as well. For example, I love Coke Zero, but when I buy the generic diet cola brand at any supermarket it does not taste the same to me.

I think that once you have acquired a taste for something it is difficult to switch. That is why some people prefer the taste of Diet Coke while others prefer Diet Pepsi.

It really does make a difference. Where I do not see the difference at all is in bottled water. Bottled water all tastes the same to me so I usually choose the cheapest.

Now my husband prefers purified water like Aquafina. He can always tell the difference so for him the extra expense is worth it.

By latte31 — On Jan 19, 2011

Donald - I also try to use white labels or generic brands in many cases it is exactly the same as the advertised brand.

For example, if you were to buy WalDryl the generic equivalent to NyQuil you see that the WalDryl found at Walgreens has the exact same ingredients as the name brand NyQuil.

The difference is in the pricing. There are some disadvantages with respect to white labels. Sometimes brand names actually taste better than generic brands.

For example, the Publix white bread does not taste as rich as the Wonder’s White Wheat bread that contains 30% calcium per serving.

This is a significant advantage when buying the Wonder bread because it has the equilivant amount of calcium as a glass of milk which is great especially for children.

By anon23345 — On Dec 22, 2008

Lots of tricks. Another is using big boxes and not filling them full. However, the weight is supposed to be on the container. I use house brands whenever I can. Neither of us have allergies so that is not a consideration. I don't think that we have ever encountered a recall except notices about automobiles needing something corrected.

Donald W. Bales

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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