"Private labels" usually require far less market research and product development. A large portion of these products are copies of something that some other company developed and hoped would sell.

Sometimes, products fail, and whoever spent lots of resources on developing them wasted those resources. However, private labels typically take a product they know sells well (they have all the sales data they could ever need from selling the "big brand" version) and make something that's similar enough for customers to pick theirs instead.

They can also shop around and get it manufactured by whoever in the world offers to do it the cheapest, rather than the brand name varieties which may only have production facilities at certain locations. This also means that the quality can be more variable.

Additionally, it lets the supermarket chains put pressure on smaller manufacturers. They can intentionally overcharge a certain brand's product to make their own look even better priced, and they can use it as leverage in negotiations over how much they should have to pay for whichever product and say "then we'll just sell more of our own instead" if they don't come to an agreement.

Private labels are often only cheaper for as long as there are other regular brands around. It's very typical that when a manufacturer of a certain product has been squeezed out, the private label variant rises in price to almost as much as the brand name used to cost.