By Robert Wheatley

Surrender to deal mania or fight with stronger value proposition…

The front page of this week’s AdAge trumpets the headline: “Private label winning battle of brands.” While the economy sets the table for a potential struggle over shares and volume, retailers have been busy priming the store brand pump with strategic hires to equip their marketing department’s with CPG experienced executives.

The end result may well be private label strategies that in many ways mimic their branded category rivals in name equity, stepped-up formula and innovative premium packaging. Adding fuel to the competitive fire is Walmart’s plans to further invest in its Great Value house brand. More than a decade ago many of us were talking about the Walmart-ization of virtually every consumer packaged goods category. Their tsunami-like expansion drove cost out of virtually every branded manufacturers business, while working to deliver on their relentless mantra of America’s favorite brands at lower (and then lower again) prices.

Now with cost driven out of the equation, Walmart’s earnings flatten and the next opportunity for growth may well be increased investments on improvements to their internal brand portfolio. So branded businesses are faced with increasing pressures and challenges in this economic environment. Meaning there’s ample opportunity to make good and bad decisions in the current malaise.

Here’s a short recipe for potential decline:

Hikes in CPG brand pricing that widen the gap to private label – potentially to a point that precipitates some erosion to store brand purchase.

This is followed by reductions in spending to talk to consumers and invest in brand relationship building.

Marketing funds are then re-directed into various price-related promotions to stem eroding volumes.

Rinse and repeat.