In the first quarter of 2020, dollar sales for store brands across all retail outlets rose 15%, which is almost $5 billion in total sales year over year according to Nielsen and the Private Label Manufacturers Association (PLMA). This increase was about one third more than national brand sales.
The OU certifies kosher private label products at all the major retailers including Shoprite, Kroger, Costco and over 3000 products alone for Target’s in-house brand so we understand how important it is for manufacturers to satisfy the demands of their private label customers.
And we are as sensitive to the consumer’s demand that OU kosher standards should be as strong in these products as they are in name-brand items. Clearly, a delicate balance in maintaining OU supervision must be reached, with flexibility afforded to manufacturers, while systems are set up to ensure the OU kosher requirements satisfy the needs of the kosher consumer.
One of the biggest issues regarding the kosher supervision of a private label is maintaining the anonymity of the manufacturer of the product. After all, the whole point of a private label product is that the consumer should associate the product with the name of the distributor, not the manufacturer. That creates an issue for kosher supervision, as the same anonymity could potentially hide where a product is made from the OU, which could interfere with our ability to certify the product as kosher. So here it is: the distributor needs anonymity (which the manufacturer wishes to grant) and the consumer needs disclosure.
How does the OU address these contrasting needs?
Private Label Agreements
The OU requires a separate private label licensing agreement between every manufacturer and every distributor. In the agreement, the distributor agrees to only produce the product in the approved OU facility(ies), and not to make an identical product in an OU and non-OU version. Provisions are set for changing production sites, as well as the handling of leftover labels and termination of certification. By signing this agreement, the manufacturer and the distributor have both promised to let the OU know about any change to ingredients or finished products.
Private Label Letters of Certification
Rather than issuing the standard letter of certification (which includes both the manufacturer and plant of manufacture on it), the OU has programmed its database with the ability to generate letters of certification that include only the OU internal code for the manufacturing company. That way, the distributor can show its proof of OU certification to its customers, without disclosing where they were manufactured. Another issue affecting the OU’s supervision of a private label product is addressing potential differences in kosher status between the in-house and private-label version of a product.
A private label cookie, for example, might include or call for milk in one whose in-house version does not contain milk. The private label sardines may be made for export to Israel, where additional rabbinic supervision is required. The private label of a juice product might require the use of a non–kosher grape juice, and a kosherization may be needed after its production to return the production lines to their kosher status before the next kosher run. Obviously, these issues must be carefully addressed, without making production difficult for the manufacturer.
Private Label Ingredients Must Appear on the Schedule A (approved list of ingredients)
Some manufacturers mistakenly believe that the ingredients used in their private label products are the responsibility of the distributor to report to the OU. In fact, it is the plant producing the product which is responsible for confirming that the proposed ingredients are OU Kosher approved, and appear on Schedule A.
Production Scheduling
Especially where kosherizations are required, the OU must monitor the production of both the regular production and the special production. The plant will obviously need to contact either their Rabbinic Field Representative (inspector a.k.a mashgiach) or their Rabbinic Coordinator (account representative) here in the OU office to alert us to the upcoming change in status of the production equipment, as well as to schedule any necessary kosherization. The Rabbinic Field Representative in turn
must review the production records in the plant during his regular, unannounced visits to confirm that no changes in the production happened in his absence.
Monitoring of Labels
Both the manufacturer and the Rabbinic Field Representative must be vigilant in making sure the correct kosher symbol is present on the packaging. This is always the case, but especially when the private label version differs in kosher status (dairy versus pareve, or kosher versus non-kosher) from the in-house one. Product made bearing the wrong symbol will need to be recalled, which is always a headache. Recalling a private label product is so disruptive to the distribution chain that a manufacturer could very well lose the entire account because of one such mistake. The OU also conducts random store audits to audit the use of the OU certification mark.
A third major concern of consumers is that the anonymity of a private label could potentially allow the distributor to produce in a non-OU facility and falsely claim to be OU certified. While the name brand has a reputation to maintain, a distributor may be “here today and gone tomorrow.” How does the OU address this concern?
Careful Maintenance of Schedule B (List of Certified Products)
Whenever a consumer questions the kosher status of an OU product, they call our “kosher hotline” to confirm the product is registered on our database. Once we find the product, we can confirm the product is duly registered without providing any information about the manufacturer, thus confirming kosher status to the consumer without disclosing the identity of the manufacturer.
A Community of Inquisitive Consumers
Because the OU symbol is so widely respected, consumers notice when a new product comes to market bearing the OU. They regularly contact our office to confirm the product is in fact OU certified. We have an entire department dedicated to answering these consumer inquiries (made via our website, by email or phone). When a product is not in fact OU certified, it is referred to our Trademark Compliance Department.
Trademark Compliance Department
The OU has a well-staffed department dedicated entirely to issues relating to trademark compliance. If a product bears the OU fraudulently, the matter is publicized through various print media. It is reported to consumer protection agencies. This can include forcing a product to be removed from store shelves, and injunctions against manufacturing and distributing a trademark-violating product. Manufacturers realize that the OU will defend its trademarked OU symbol fully, and thus refrain from illegal use of the OU symbol.
As the private label market continues its exponential growth it is the OU’s mission to help empower kosher manufacturers and serve the needs of kosher consumers. If you have any questions about private labeling or are interested in producing private label products you can contact your rabbinic coordinator or business manager, Howard Katzenstein Howardk@ou.org.