In Colombia, the debate over private labels is unsettling, even as opinions remain divided. From the local industry’s perspective, voices like that of Andrés Ortega, former general manager of Team Foods Colombia, maintain that “without a doubt, private labels have affected category performance, as they have reduced value and relevance with a low-price offer.” In contrast, Juan Pablo de León, Unilever’s Vice President of Marketing for the Andean Region and Central America, argues that “the brands that could be affected are those that have failed to clearly differentiate themselves from the rest.”

Beyond these positions, a brand is understood as a promise to the consumer: it concentrates market value, fosters loyalty (reducing costs and increasing margins), and implies higher quality and reliability. For that reason, brands with strong equity can charge a premium over comparable products.

At the point of sale, however, clear trends are emerging. A recent tracking study reported significant growth in private-label purchases. In the first half of 2012, 54% of shoppers felt that leading brands do not offer better quality (up from 47% the previous year). Even so, 51% said they would continue buying leading brands because they trust them.

These data raise two marketing questions: why the loss of trust and credibility in some leading brands, and what happened to the investment in advertising and brand support? The answers appear connected. Technology has diluted advertising’s impact: consumers now access more information across a wider range of channels, dispersing paid messages. At the same time, private labels, competing with leaner cost structures (including lower ad spend), leverage trust in the channel: concentrated at the retailer, they amplify their proposition when the store enjoys high credibility.

The economic context also matters. Neoliberal-style models and pressure on household incomes push more price-sensitive decisions: many consumers avoid paying a premium when they don’t perceive added value and prioritize financial criteria overstated attributes. In some cases, supplier apathy further erodes relationships with long-standing customers.

In sum, the challenge for leading brands is to revalidate their differentiation and reconnect with consumers in terms of perceived value, trust, and channel relevance. The warning to senior management, including Unilever’s regional VP of Marketing, is clear: you snooze, you lose.