Why do restaurants promote the brand of ketchup on their tables but not their own brand?
– Silverwareguard.com via Twitter
What you’re asking about is brand equity. That is, how much do consumers value a given brand over a private label or generic?
Some products have high brand equity and—associated with that—high brand loyalty. Ketchup is one example you raised but hot sauce, mustard, soft drinks, coffee, beer, wine, and snack foods are others. No one wants Fauxritoschips. The core question is, “Would guests prefer to see a leading national brand on the table or our own?” For some products, such as sugar packets, a guest may not feel strongly either way. For others, such as mayonnaise packets, a guest may feel that the restaurant is being cheap or shoddy by not using a leading national brand.
The interesting opportunities happen with products like beer, wine and spirits, barbecue sauce, hot sauce, pickles, or prepared foods where a high quality private label product can provide a signature item, an additional revenue opportunity in the sale of packaged products, and the ability to customize your concept. People are very loyal to some brands (don’t mess with their ketchup!), but do explore opportunities to make some products your own through private labeling. Your restaurant has its own brand equity—Jon’s Café ketchup over a name-brand ketchup might be a non-starter but Jon’s Café hot sauce might have appeal.
More on producing private label products here.