Why Store Brand Infant Formula
Costs Up to 50% Less*

By Sandra Gordon

Why Are Store Brands Less Expensive? Here's the Deal

When I first heard that Parent's Choice (Walmart baby formula) and other store brand infant formulas have a price tag that's up to 50 percent less* than name-brand baby formula—and that it has to be nutritionally comparable and the same high quality because all infant formulas are regulated by the Food and Drug Administration--my first thought was, What's the catch? A savings of up to 50 percent is a lot, especially when it adds up to a savings of $600 or more in a year*. How could it be that store brand infant formula can even afford to exist? Why are store brands less expensive? It goes against that basic "You get what you pay for," tenet too, don't you think? You can pay up to 50 percent less and still get name-brand quality? Unbelievable!

Believe it. I've since learned why store brand formula can be so much less expensive than name-brand formula and it makes "cents." Here's how it all adds up.

Marketing

National brand manufacturers spend literally hundreds of millions of dollars in marketing every year in an effort to attract new moms. They use expensive tactics like television advertising and direct mail to get high-value coupons and samples into mom's hands, before she even gives birth. National brand manufacturers know that if a mom initiates formula feeding with their brand, she'll get mentally "hooked" on these expensive products. All of these marketing costs are ultimately reflected in their retail prices.

Free Formula Samples

You can get something for nothing, but you'll pay the price later. The cost of those free discharge name-brand formula sample packs that many U.S. hospitals still give to moms when they leave with their new babies is ultimately passed along to formula-buying consumers who latch on to that brand.

WIC

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) also contributes to the cost of name-brand formula. WIC provides free infant formula to low-income postpartum and breastfeeding women and infants in the U.S. who are at nutritional risk. Only brand-name infant formula manufacturers compete for WIC contracts. More than half of the infant formula used in the United States is provided to the millions of moms in the WIC program for free. The cost of the WIC program is ultimately passed along to name-brand formula-buying consumers, including WIC moms who run out of brand-name formula before month's end and feel they have to stick with the name brand. They don't. WIC moms who use formula are typically only given a three-week supply every month.

Store brand formula is at least 50 percent less expensive* because Perrigo Nutritionals doesn't spend nearly as much money on marketing as national brands. They don't advertise or offer free formula samples to physicians or hospitals like national-brand formula companies do either. The majority of their expenses go towards the ingredients and the quality built into their manufacturing process. And Perrigo Nutritionals doesn't participate in the WIC program.

Bottom line

Why shell out for name-brand infant formula when you can save up to $10 per can* by buying the store brand? And though it sounds too good to be true, believe it: The only difference you'll find when comparing store brand infant formula to national brands is price.

*Total savings with Store Brand Infant Formula based on a price per fl oz comparison of Store Brand Infant Formulas and their comparable national brands. Retail prices are from an August 2012 retail price survey of assorted stores. Actual prices and savings may vary by store and location.


About the Author

Sandra Gordon is a consumer products expert, a writer, and a mother of two. She has appeared on NBC's Today Show and as a baby safety expert on The Discovery Health Channel's “Make Room for Baby.” A Consumer Reports author, her latest book is Save a Bundle: 50+ Ways to Save Big on Baby Gear.

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