Startup Aims to Offer Savings by Ditching Brands for Good | NBC Nightly News

GAMBLE AIMED AT A NEW GENERATION OF SHOPPERS >> Reporter: WHEN A NEW COMPANY SETS UP SHOP, SO MUCH OF LURING IN THOSE EARLY CUSTOMERS IS ABOUT THE BRAND, BUT THIS SAN FRANCISCO START-UP IS REDEFINING THAT

CEO TINA SHARKEY CO-FOUNDED BRANDLESS, WHICH SHIFTS EVERYTHING FROM BARBECUE SAUCE TO HAND LOTION DIRECT TO CONSUMERS EACH ITEM IS PRICED AT $3 OR LESS THE IDEA, ELIMINATE WHAT THE COMPANY CALLS THE BRAND TAX, WHICH INCLUDES ADVERTISING, RETAIL SPACE, AND DISTRIBUTION >> IF PEOPLE ACTUALLY UNDERSTOOD WHAT THINGS COST VERSUS WHAT PEOPLE PAY FOR THEM, THEY'D BE RIOTING IN THE STREETS >> I SEE MAPLE SYRUP RIGHT THERE

HOW MUCH IS THAT MAPLE SYRUP? >> 3 BUCKS >> Reporter: $3 BUT MAPLE SYRUP AT THE GROCERY STORE IS PROBABLY TWICE, IF NOT MORE SO, ARE YOU TELLING ME ALL THAT DIFFERENCE IS JUST BRAND MARK-UP? >> IT'S NOT JUST BRAND MARK-UP IT'S BASICALLY THE ENTIRE SYSTEM

IT COMES FROM THE SUPPLIER, THEN THEY HAVE TO PAY A DISTRIBUTOR TO GET INTO THEIR RETAIL OUTLET THEN THEY GO TO THE RETAIL OUTLET WHO GETS THEIR MARK-UP >> Reporter: BRANDLESS PRODUCTS ARE ONLY SOLD ONLINE, MANY ORGANIC, GLUTEN AND GMO-FREE MAGGIE AKERS HEARD ABOUT IT THROUGH A FRIEND WHO WORKS THERE >> I'LL TRY THE SALSA

>> Reporter: SHE ORDERS AHEAD WHEN SHE HAS FRIENDS OVER >> I THINK AT $3, YOU MIGHT BE A LITTLE WORRIED ABOUT QUALITY, LIKE WHAT AM I GOING TO GET FOR $3, BUT I WAS REALLY SURPRISED >> Reporter: BRANDLESS ALSO KEEPS PRICES DOWN BY LIMITING WHAT IT SELLS TO A COUPLE HUNDRED PRODUCTS, BUT BRANDLESS MAY NOT ALWAYS BE THE BETTER DEAL AT TRADER JOE'S, STAPLES LIKE PEANUT BUTTER, TOOTHPASTE AND SALSA ARE EVEN CHEAPER THE COMPANY'S TRYING TO BREAK IN AS CONSUMER TASTES ARE CHANGING

AMONG THE TOP 100 HOUSEHOLD PRODUCT BRANDS, 90% OF THEM HAVE LOST MARKET SHARE, INCLUDING CATEGORIES LIKE FROZEN FOODS AND CEREAL >> CONSUMERS ARE MUCH MORE ABOUT THINGS THAT ARE LOCAL, THAT ARE AUTHENTIC, THAT HAVE A STORY THAT CONNECTS TO THEM, AND THAT OFTEN MEANS PUTTING ASIDE THOSE TRADITIONAL BRANDS THAT THEY MAY HAVE HEARD OF FOR YEARS AND YEARS >> Reporter: IT SOUNDS LIKE BRANDLESS IS KIND OF DEVELOPING A BRAND OF ITS OWN >> OH, ABSOLUTELY WE ARE UNAPOLOGETICALLY A BRAND

WE'RE JUST REDEFINING WHAT IT MEANS TO BE A BRAND >> Reporter: DISRUPTING THE FUTURE OF HOW COMPANIES BECOME A

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