How do supermarket "brands" come about?

I was having a conversation with someone about their DC only liking branded food e.g. will only eat Heinz beans etc. I totally couldn't get my head round that. Why do kids care? Mine never get to see the tin TBH. I am interested in this for budgeting reasons.

Anyway. I always thought that big supermarkets hassled or negotiated with big companies to make their own house brands. Perhaps not the same recipe, perhaps slightly inferior, but this is how I thought it worked. So, for example. Heinz want Tesco to sell their beans. Tesco says OK, but you have to make XX tins under Tesco brand. Its kind of a win-win. I have never thought that Tesco have their own factory making their own beans. This has been my underlying reason for why I mostly buy non branded, but still good quality food. E.g. I'd never buy branded tin tomatoes unless a bargain and otherwise buy Waitrose only label tin toms as I'm sure they are as good, if not better.

So, I'm sure I am not right. Can anyone enlighten me as to what happens? I'm genuinely interested.