The increase of private labels of grocery products

However, there is one notable sector where this formula for success has yet to grab the imagination of the consumer and topple the dominance of name brands:

The increase of private labels of grocery products

This finding may encourage brick-and-mortar stores to continue investing in private label products as they compete with national brands that are investing in and transitioning to online grocery sales. However, this growth is not attributed to all private label products as there are national brand products that outsold store brands in certain categories.

Nevertheless, private label products experienced a higher growth in every category in when compared to national brands. Neilson divided products into five categories by price tier: Tier 1 represented discount products whereas Tier 5 represented premium products.

The market research organization measured these categories in a week period which ended on July 22, and compared the results to the prior year.

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Private label products in Tier 1 experienced a However, both brand types experienced significant growth in the premium Tier 5 category private label products experienced Neilson attributed this increased sales growth of premium products to the fact that consumers are more health-focused.

The organization claims that packaging also plays an important role in the sales of these products as consumers actively seek out labels that indicate sustainable production and the ethical treatment of animals.

The increase of private labels of grocery products

For example, nearly one out of two surveyed Americans 46 percent would agree that claims on food products influence their purchases.

About 43 percent of these calorie-counting products were attributed to ice cream and salty snacks while the wholesome snack category attributed to 32 percent of these sales.

This means that confectionary or dessert companies may be able to increase their product sales just by decreasing their serving sizes and reducing the number of calories in each package.

With major grocery chains investing in diversifying their private label products, national brands are now competing with grocers in almost every food category.

Store brand products are beginning to have the upper hand because of their often lower price points and the fact that grocers are investing in premium quality ingredients.

German grocery chain Aldi is a great example of a major grocer that provides customers with premium store brand products. Aldi, a chain that is rapidly growing in the US, has their private label products in nearly every aisle of their grocery stores with products spanning from fresh produce to baby food.

Earlier this year, the major grocery chain announced a private label line of vegan food products under their brand Earth Grownallowing the international grocery chain to get a hand in the growing vegan demographic in America.

How Should National Brands Think about Private Labels?

In addition, a recent report by Daymona global consumer retail and private brand agency, found that 81 percent of consumers buy private label products every time or almost every time they visit a grocery store.

The organization also found that 85 percent of consumers trust private label products just as much as national brand products. This trend is supported by the notion that private label products are cheaper than national brands, which leads some consumers to select a store brand product without checking if a there is a cheaper national brand version.

They have gone from being just a financial tactic to the most coveted play in town. This trajectory is expected to continue with private label brand dollar sales forecasted to increase With such promising sales, it is likely that more grocery stores will start rolling out their own branded products in every aisle of their grocery stores.This led to a renewed increase in demand for private label fmcgs, with global sales jumping by 9% in current value.

This was also partly attributable to an increase in private label prices in developed markets as a result of quality improvements, as several retailers developed premium ranges that competed directly with branded products.

The increase of private labels of grocery products

Unfortunately for processed food companies, much of center aisle growth is driven by an increase in private-brand labels. Grocers Private Label Brands Are Pushing Consumer Staples Off The Shelves. Private-label goods capture a minority share of the US grocery market, but there are five specific factors that could boost sales of these products: Rising food-price inflation may prompt American shoppers to trade down from branded grocery products.

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How Should National Brands Think about Private Labels?

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6 days ago · BigBasket eyes 40% revenue from private labels next fiscal The company aims to clock Rs 3, crore in sales this fiscal year, up from Rs 2, crore last year.

The battle for brands in a world of private labels | Deloitte Insights