Private label, or store brand, growth has widely been seen as a result of recession, but although some private label foods are simply cheaper imitations of familiar brands, there is now a greater range of store brand products on offer, and more have focused on delivering quality as well as value. This has led to speculation that private label products could endure well beyond economic recovery.
Sales of private label products surged during 2008, and the sector grew again last year, with an additional 1.8m units sold, according to the latest PLMA figures, adding $2.7bn to reach $86.4bn in total sales. During the same period, sales of national brand products fell by 2.1m units.
It has previously been seen that private label foods sell well during times of recession, with unit market share climbing from 20 percent to 21.8 percent in the 2001-2003 recession, according to the PLMA. And in the 1990-1991 recession, unit share for store brands moved up from 17.6 percent to 20 percent. But during 2009, unit share reached an “historic high” of 23.7 percent, the organization said.
PLMA president Brian Sharoff said: “The past year has even greater significance since it is the first full year of the impact of the recession. Not surprisingly, the statistics document the amazing increases in store brand popularity. But as most market researchers know, the growth of store brands is by no means a recessionary phenomenon. Its success began years before the current downturn and is rooted in increasing assortment, quality ingredients, innovative product concepts, and retailer commitment.”
According to market researchers at Mintel, health and wellness claims including no trans fats, no saturated fats, multi-grains and antioxidants among the strongest-growing categories for private label foods. Mintel claims that this is a result of store-brand food manufacturers attempting to surpass their branded rivals in terms of innovation.
Meanwhile, makers of brand-name foods have been increasingly using promotional campaigns, including coupons, on-shelf messaging and discounts, in an effort to entice consumers back to their old favorites.