What Is Driving the Growth of Private Label Brands?
Changes in consumer attitudes within the food and beverage market have reignited the power struggle between private-label products and their branded counterparts
Private-Label Positioning in the Food and Beverage Market
As the world begins to recover from the COVID-19 pandemic, it is evident that trends in the market are still evolving, especially as they react to changes in consumer attitudes and behaviors. One decision that consumers consistently are met with is whether to purchase private label (also referred to as “store brand”) products or brand name offerings. Specifically in the food and beverage market, private-label products have gained serious traction, but are starting to reach limitations in terms of growth.
The Impact of the Growth of Private Labels Brands
Once upon a time, private label products were associated with low standards and low prices. Consumers only purchased them to save money. Not anymore. Early in the pandemic, when many consumer packaged goods (CPG) brands disappeared from store shelves due to panic buying and pantry hoarding, shoppers were forced to turn to private-label goods.
To change that consumer mindset takes strategy, creativity and drive. If you’re looking for people to get you there, we have teams waiting for you.
Food, Glorious Food
For the fourth consecutive year, private label in grocery outpaced name brands in 2020, with year-over-year sales growth of 13.7% compared to 12.9%. Supermarket private label sales increased 13.2% in 2020 by $8.5 billion to a record $27.3 billion.
Private Label is a Winning Strategy for Retail Success
What do Alfani, INC, Amazon Essentials, Cat & Jack, Halogen, and Universal Thread have in common? They are all exclusive apparel and fashion brands from major retailers such as Amazon, Nordstrom, Target and Macy’s. As consumer demands increase, retailers are leveraging the private label market as a critical strategy to differentiate their brand and build customer loyalty in a saturated market.
What are Private Label Brands?
Shopify defines Private Label products as those ¨manufactured by a contract or third-party manufacturer and sold under a retailer’s brand name.¨ You can find private label products across a wide array of industries, such as personal care, cosmetics and apparel & fashion.