Development of store brands in Japan
Store brands are the prominent form of private labels in Japan as leading retail chains developed in-house brands to compete with products of national brands stocked on their shelves. Drivers of the market growth are retailers like supermarkets, convenience stores, and department store operators that offer a broad product range. Convenience store operator Seven & i Holdings distributes over three thousand items under the “Seven Premium” brand in its affiliated stores, which covers household essentials, fresh and processed foods, apparel, and personal care products, among others.Suppliers to private labels are either company-owned manufacturing divisions, subsidiaries, or contracted manufacturers. Contract manufacturing is particularly prominent in the food manufacturing industry, where more than 60 percent of businesses are involved with private labels in the retail market. Manufacturing used to be outsourced primarily to small- and mid-sized businesses, which resulted in significant quality differences. To improve and stabilize product quality, retailers have increasingly contracted with original equipment manufacturers (OEM) of national brands at the turn of the century.