How important is the label? Could knowing when to buy generic save American consumers more than $1 billion a year? That's the estimate of a recent study by economists at the University of Chicago Booth School of Business and a colleague at Tilburg University in the Netherlands. The researchers found, for instance, that health care professionals are more likely than other consumers to buy cheaper private-label headache remedies. The study suggests that if everyone knew as much as doctors and pharmacists do about things such as active ingredients, headache sufferers would spend $410 million less on brand-name medication.
That leads to the question: What else are consumers buying brand-name when generic will do just as well? Cheapism looked into supermarket merchandise ranging from food to batteries to find out when it's best to go generic to save money.
In a recent Consumer Reports test of sunscreens, store-brand products from Wal-Mart and Target earned the highest scores overall. The organization also rated a Walgreen-brand sunscreen among the most effective at shielding against UVA and UVB rays. On the flip side, some of the most expensive sunscreens turned out to be the least effective. It's more important that a sunscreen be labeled "broad spectrum" and "water resistant" than any particular brand name.
Duracell, Energizer, or no-name AA -- it doesn't make much difference, according to a test commissioned by DealNews. Five out of six batteries performed almost the same, despite large variations in price. (The exception was a far more expensive battery with a higher initial voltage.)
3. Infant formula
It may sound a little risky to pick a generic baby formula, but this is a highly regulated product that must meet nutritional requirements set by the Food and Drug Administration. The bigger differences lie in texture, flavor and (of course) price.
A name-brand bottle of water may purport to come from an exclusive spring on a Pacific island, but it takes a truly discerning palate to tell the difference between that and a store-brand bottle. Of course, the cheapest and most environmentally responsible way to get bottled water is to fill it up yourself.
5. Pantry staples
In addition to headache remedies, the Chicago Booth paper examined kitchen essentials such as salt, sugar and baking soda. Here, too, people who had worked in the industry were more likely to snatch up cheaper private-label products. The fact that chefs elect to cook with generic ingredients suggests there's no noticeable difference in quality.
6.Packaged foods: Go case by case
As The Associated Press reported earlier this year, store-brand food items often come from the same sources as brand-name goods. Determining exactly which ones are just sprinkled with different seasoning and outfitted with different packaging is next to impossible without access to closely guarded trade secrets. But the simpler the product, one executive told the AP, the more likely it is to be a nearly identical item. A somewhat dated Consumer Reports test recommended store-brand soup, orange juice and hot dogs over name brands and concluded that the quality of generic ketchup, peanut butter and potato chips was the same.