Private Labeling Provisions
By Chris Wiberg - September 12, 2016
PFI's Standards Program has recently made private labeling provisions for issuing additional registration numbers to qualified producers who are selling wood pellets to retailers or distributors who require anonymity on behalf of the producer.
As part of the Pellet Fuels Institute’s Standards Program, a registration number is issued to each qualifying pellet fuel manufacturer. The registration number, along with the production facility information, is published on the PFI website, which provides a complete list of all production facilities qualified under the program. It was originally intended that only one registration number would be issued to each manufacturing facility; however, it was not anticipated that this would result in issues for retailers or distributors who sell wood pellets under their own private label. PFI’s Standards Program has recently made provisions for issuing additional registration numbers to qualified producers who are selling wood pellets to retailers or distributors who require anonymity on behalf of the producer. I will explain. …
But first, let’s be clear as to what we are referring to as private labeling. Private labeling is the practice of selling your own brand of wood pellets without actually manufacturing wood pellets yourself. Essentially, the retailer or distributor purchases wood pellets from a manufacturer and has the producer package the product in the retailer’s or distributor’s own privately labeled bags. Private labeling is quite common in commerce. For example, if you purchased a Maytag clothes dryer in recent years, it may have actually been manufactured by Frigidaire. Another example is a whisky distillery in Kentucky whose product is sold by dozens of distributors under their own brands. The label simply says “Bottled by” and then the label lists the company that bottled the whisky rather than the actual distiller of the whisky. Like numerous other industries, private labeling regularly occurs with the wood pellet industry.
To date, I have had the pleasure of working with over 50 wood pellet production facilities within the U.S. and Canada to help develop their quality management plans. Most have been in conjunction with either a PFI Standards Program or ENplus certification, however several others have been for supplying power companies overseas. Regardless of the intended market or certification program, the quality management plan requirements are very similar. The following examples are specific components that I have found to be critical to optimizing overall plant efficiency regardless of which market or certification program you plan to participate in.
The problem we have encountered is that if the bag of wood pellets includes the manufacturer’s PFI Standards Program quality mark, then the producer’s registration number will appear on the bag, which discloses to the customer which manufacturer actually produced the product. While in many cases this is considered acceptable and may even be preferred, in others, it is clear the retailer or distributor would prefer the producer to remain anonymous, citing issues with customers calling the production facility directly for questions or concerns regarding the product they sell. This issue was reviewed by PFI as well as by the PFI Standards Program accreditation body—the American Lumber Standards Committee—and, as a result, new provisions have been made to assure private labeling can still be private if desired by the retailer or distributor.
PFI’s new private labeling provisions are as follows. If a qualified pellet fuel manufacturer is working with a retailer or distributor who wishes to use privately labeled bags that keep the wood pellet manufacturer anonymous, then the wood pellet producer will need to contact their inspection agency to request an additional registration number to be used specifically for private labeling purposes. The inspection agency will review the request to assure that the additional registration number is used only for the designated production facility and that the pellet fuel manufacturer will maintain control of all bag printing. Once approved, the inspection agency will issue a new quality mark with the additional registration number to be used only on privately labeled bags.
To assure that consumers can still have the ability to investigate the validity of private label registration numbers, PFI’s website now includes a list of all registration numbers issued by inspection agencies for private labeling purposes. These can be found on the same web page as the full list of PFI Standards Program qualified producers. If consumers do have questions or concerns regarding privately labeled product, they are encouraged to contact the retailer or distributor of the product or make use of contact information printed on the bag for the purpose of asking questions. If this is not successful in resolving problems and consumers wish to take their concern to the next level, then PFI can be contacted and the concern will be relayed to the inspection agency that issued the associated registration number.
The new PFI Standards Program private labeling provisions are intended to allow for pellet commerce as it has historically been conducted, while maintaining the integrity of the program by ensuring that the audit trail is fully upheld. These new provisions also assure that privately labeled product is covered by the PFI Standards Program without requiring retailers and distributors to become qualified themselves. Essentially, qualified pellet fuel producers are held accountable for the complete trade of their product whether quality marked under their original registration number or under a registration number issued for private labeling purposes. To view a list of registration numbers currently issued for private labeling purposes, please visit the PFI website at www.pelletheat.org/qualified-production-facilities.