The private labelled food products are those that are manufactured by the third party but sold in the name of the retailer. In short, the retailer itself is not producing the products rather just giving their name to outside manufactured products. The retailer company decides everything about the private label food products that is what will go inside the pack, what would packing look like and the looks of the label as well. The final call is of the retailer company and the manufacturer needs to follow.
The retailers always want that the stores are filled with the stock in their name. So, the best solution is having private labelled food. The Private Label Food Manufacturers get paid for the manufacturing and delivering the stock to the store of the retailers. Also, they provide control over production as they do everything according to the retailer and control the quality of the products. This can help in controlling the price as well as the quality would be high and the cost can be controlled so they can charge a profit-making price.
The larger companies usually manufacture their food products but the small retailers do not have such huge capital to invest so they go for private labelled foods. Everything is done by retailers such as deciding the packaging, weightage and even the price. Only the production has to be done by the manufacturers. The retailers also get control over the profitability as the costs and prices are under control. Hence, having private label food manufacturers is always a good idea for retailers.