According to Catalina research, in 2020, private label new product introductions dropped by 34% vs. new product introductions from national brands, which decreased by 46% compared to 2019. In 2021, new product introductions from private label brands decreased again by 54% compared to a 65% decrease in new product introductions from national brands.
But amidst all the pullback, retailers were still investing in their private label assortment and focused on a few key categories, noted Catalina.
Sales of private label products were up 13.2% and accounted for 23.4% of all units sold across all US retail channels including supermarkets, mass, club, drug, and dollar stores in 2020, according to the Private Label Manufacturers Association (PLMA).
For instance, ready-to-eat cereal saw a 48% decrease in new product introductions from private label brands vs. a 53% decrease for national brands in 2020, the first year of the pandemic. However, in 2021 activity picked back up with new product introductions for private brands increasing by 66% while national brand launches declined by 35%, according to Catalina’s Buyer Intelligence Database.
The same was true for the cookie category, which experienced a 66% decline in new product introductions for private brands vs. a 57% decrease for national brands in 2020, compared to 2019. But in 2021, new product introductions for private brands shot up by 60% while national brands declined by 22%.
Overall, the private brand categories that saw the greatest growth since the COVID-19 pandemic began include: Frozen Potatoes/Baked (up 191%), Pre-Packaged Breakfast Sausage (up 173%), Disinfectant Cleaners (up 135%), and Baking Ingredients (up 115%).
Several retailers such as Target have leaned heavily into their private label assortment launching a new variety of everyday indulgences called Favorite Day. For Kroger, its private label brands (Private Selection, Simple Truth) had its "best year ever in 2020," said CEO Rodney McMullen during the company's Q4 2020 earnings call, surpassing $26.2bn in sales for the year.
Momentum and shopper fanfare for private label is occurring across the CPG landscape and retailers are continuing to ride the wave, noted Phyllis Johnson, senior director of private brand development at Catalina.
“Overall, retailers are seeking to engage shoppers who may once again be turning to private brands as they did during the early days of the pandemic when name brand shortages prompted trial,” said Johnson.
“I predict this could be a second chance for those retailers to effectively demonstrate the value of private brands and convert shoppers to loyal private brand buyers.”