If you read industry reports, you have surely realized that private labeling is the way of the future. Gone are the days when the term “private label” conjured up images of plain labels affixed to a bottle of watered down ketchup and oily potato chips in huge bags. As quality has increased exponentially, the number of private label products is growing unabashedly up and down each aisle of your local supermarket. While this growth may be bad news for the “name brands” that stand to lose market-share, clearly it is good news for manufacturers and consumers alike.
QUESTION: As an OU company, I have many customers who want their names printed on the label with no mention of the manufacturer (also known as private label products). We understand the need to sign a contract, to ensure that everyone is “on the same page” with the OU requirements for private labels, though the “legalese” of the contract makes it hard for us to understand what exactly we are obligating ourselves (and what our label company is obligating itself) to do to remain OU certified. Can you advise us in “plain talk” what exactly are the responsibilities of the manufacturer and the label company in the agreement? Specifically, what is this “parallel product” clause, and why is it needed?