In its 2022 Private Brands report, Daymon noted a significant rise in consumers' willingness to purchase private label products over name brands in 2022 vs. the same time last year, especially during the holiday season when grocery spending tends to skyrocket.
According to its research, just under 70% of shoppers purchased private brands last holiday season (2021) with the top two drivers being better satisfaction with private brands' product quality and effort to save money. This year (2022), 95% of consumers surveyed said they were interested in purchasing private brands during the holiday season, citing greater value and affordability as well as improved selection and quality among retailers' private label selection as top purchase motivators.
Less than one-fifth (17%) of consumers surveyed this year plan to stick to using the same national brand for their holiday recipes, while 83% of shoppers either already use private brands or are willing to switch brands this holiday season.
"Private brand interest is driven by perceptions of low prices as well as high overall value," noted Daymon in its report. "Nearly one in four consumers are specifically motivated to buy private brands this holiday season because the brand they normally buy raised their price – giving retailers the opportunity to capitalize on brand switching behavior to drive private brand trial and loyalty."
Private brand interest by category
While consumers indicated a general willingness to purchase private label products across the store, 64% of consumers responded that they were interested in private-label dairy (eggs, milk, yogurt, cheese, ice cream) and 61% surveyed said they would be willing to purchase private label staple meal ingredients (pasta, baking mixes, condiments, spices, canned goods, etc.) followed by salty snacks (47%), frozen foods (43%), and shelf-stable baked goods (40%).
Over three-quarters (76%) of shoppers reported interest in seasonally flavored products providing retailers with an opportunity to expand their holiday private brand assortments.
Categories where consumers showed the least amount of interest included breakfast foods (30%) and RTD beverages (28%).
Appealing to budget-conscious Gen Z and Millennials
Gen Z and Millennial shoppers are taking on more hosting duties during the holiday season and are looking for affordability and convenience.
The majority of Gen Z (65%) and Millennial (58%) shoppers said they are following a holiday grocery budget, while Baby Boomers and the Silent Generation (77- to 94-years-old) are less likely to stick a budget.
"Gen Z is the most apt to seek out pre-made meal solutions - even given the typically higher price points - with nearly one in four citing plans to buy more pre-made food as a reason they expect to spend more on holiday groceries this year. Millennials are also seeking to support holiday meals with pre-made options. The most popular prepared food solutions are ready-to-eat appetizers, store-baked goods, and desserts," noted Daymon, which encouraged retailers to push innovation across its private label selections.
Additionally, Gen Z and Millennial shoppers are generally agnostic to brand names and are looking for new and visually-appealing items to add to their holiday grocery list, creating an opportunity for private brands.
"Both Gen Z and Millennials reported the highest level of interest in purchasing private brands this holiday season, with 98% of each generation considering or definitely purchasing them this year. Successfully encouraging new item trial can help increase brand awareness and loyalty, such as through seasonally-flavored items," added Daymon in its report.
Shoppers across the board are looking for ways to save money on their food spending and the holidays are a key time for store brands to engage shoppers with a broader selection of private label items, provided the quality is there, said Daymon.
"Retail fundamentals of appealing packaging and item displays also still remain important purchasing drivers for trying new grocery items as well."