Generic Products vs. Brand Name: Are They the Same?

FT Contributor
A graphic of a fork in the road. One way marked with a road sign that reads "generic brand," the other way marked with a road sign that reads "name brand."
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Everyday items such as toiletries and groceries have a serious impact on your budget. The products and brands that you choose can help you save money. In some instances, for example, generic products are as much as 30% cheaper than name brands. In some cases, you can cut your shopping budget down immediately if you switch to generic brands.

Many people think name brand products are of higher quality, and this quality justifies paying a higher price. For some products, this may be true. However, in other cases, you are getting the same product or products with exactly the same ingredients when you buy generic.

In certain cases, such as with medicines, the law requires that generic and brand-name products have the same ingredients.

By choosing when to rely on generic brands and when to opt for name brands, you can stick to a shopping budget, or at least save money without sacrificing quality or having to eat or use inferior products.

What Is the Difference Between Generic and Brand Name?

A generic brand is a consumer product that lacks a widely recognized logo or name. They are typically less expensive than name-brand products because the manufacturer does not market them.  

One of the main reasons for the higher cost of name-brand products is that the makers spend money on advertising and branding. These costs get passed on to consumers. Because they do not have marketing costs and often use simpler packaging, makers of generic products can still make a profit even when they charge less.

Where to Find Generic Products

Generic products are common in supermarkets. Chain grocery stores may even have their own generic products that they place on shelves right next to name-brand products. Pharmacies may also offer generic medications instead of name-brand products.

In many cases, generic products get manufactured in different factories or facilities. However, there are some instances where name-brand products and generic products come from the same facility where they get made on the same equipment using the same methods. This situation occurs when a brand and its generic counterpart both contract their manufacturing out to the same company.

Some people use different terms when discussing generic products. They are sometimes known as private label brands, own brands, store brands, and private brands.

Such store brands and private label brands aren’t always cheaper than name brands. Sometimes a supermarket will offer both a premium and a value version of a store brand to appeal to different types of consumers. Also, name brands may occasionally be on sale. During sales or promotions, these products may temporarily be cheaper than their generic counterparts.

How to See Which Generics Are the Same as Name Brands

How can you be sure if a generic brand is similar to a name brand? If you aren’t sure, you can check the ingredients list and, for food items, the nutritional profile. For most products, the law requires manufacturers to provide such information on packaging.  

Because of the marketing strategies of name-brand products, you may see different words on these products than on their generic counterparts. However, a closer inspection of the ingredients and nutritional facts will reveal whether the products are similar.

Brand names may also carry a higher level of prestige. Even though they are similar to generic alternatives, they have a certain image that allows them to command a higher price.

Why Buy Generic Products?

In most cases, generic products are less expensive than name brands. They don’t get promoted as much, have simpler packaging, and get produced by lesser-known manufacturers. You should keep in mind, however, that with coupons and during sales, brand names may become cheaper. Most coupons are for name-brand products, so you are more likely to find deals on them than on generics. Without these deals, however, generic alternatives are almost always cheaper.

Generics taste the same as name brands. Taste is a matter of personal preference, so the only way to be sure that two products taste the same is to try them both for yourself. However, blind taste tests have shown that most generic food products taste the same as name-brand products.

There are lots of generic brands that have organic product lines. Many grocery stores have begun offering store-brand natural products.

Generics are often the same quality as name-brand products. This is especially true of drugs. The FDA requires that generic drugs have the same level of efficacy and the same ingredients as name-brand drugs. The same applies to raw ingredients like flour, sugar, salt, and spices. In these fields, at least, generic brand products are of comparable quality to name brands but cost a lot less.

Best Products to Buy Generic

  • Paper products are often exactly the same, and since they are disposable anyway, longevity does not matter as much as with other types of products.
  • Drugs are regulated by the FDA, which mandates that generics must have the same ingredients as brand name medicines.
  • Baby formula is also regulated by the FDA, which requires manufacturers to use the same ingredients.
  • Cleaning products often contain the exact same ingredients regardless of their brand.
  • Condiments usually have the same ingredients and may even come from the same manufacturing facilities.
  • Shampoo has similar active ingredients whether it is a brand name or a generic alternative.
  • Plastic storage bins have the same composition regardless of brand.
  • Sunscreen is regulated by the FDA.
  • Frozen fruits and toppings — In your smoothies, baking, and cooking, you will hardly be able to taste the difference between generic brands and their name-brand counterparts.
  • Trash bags get thrown out anyway. You just need to make sure that your bag doesn’t break apart before it reaches your trash can.
  • Kitchen staples such as sugar, powdered sugar, baking soda, flour, and salt must have the same ingredients whether generic or name brand. Some facilities process both generic and name-brand products using the same equipment and raw materials.
  • Snacks such as cookies and crackers are easy to reproduce. Generics often have the same ingredients and taste as their name-brand counterparts.
  • Cereals, like snacks, are relatively easy to reproduce. Cereal companies do a lot of marketing because it is a very competitive sector, so you can save a lot of money with generic brands that do not engage in marketing.

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