Going Private: How to Succeed in Store-Brand Sector

Room for Growth

Over the past three years, one area of grocery that has shown a lot of growth potential for private label is meal components. IRI Omni Scan Panel data for all outlets year to date ending July 12 shows that items such as frozen raw shrimp, spices/seasonings, natural cheese slices, muffins, refrigerated and frozen uncooked meats, frozen appetizers, and refrigerated flavored spreads have all grown in household penetration since before the pandemic.

Meal solutions and components will likely remain a growth area for private label if consumers continue to eat at home more, either to save money or fit work-at-home lifestyles, according to Moberly.

FMI’s study confirms what some of IRI’s data shows, as consumers who qualify as “frequent private-brand shoppers” say that they tend to purchase store brands in the following categories: fresh bakery items (35%), nonprescription drugs (26%), milk (25%), fresh prepared meals (24%) and deli foods (23%). Categories in which they purchase top national brands include packaged alcoholic beverages, pet food, plant-based meat alternatives, coffee and tea, and HBC products.

PLMA, for its part, has recognized the growth potential for products that feature healthier attributes, and has focused on this during its most recent trade shows. These attributes include vegan, clean, plant-based, free-from, natural, organic, keto, high-protein, functional, probiotic, prebiotic, gluten-free, heart healthy, sugar-free and low-fat.

In addition, the trade association lists sustainability, fresh food and ethnic/international foods as other growth areas for private label.

Another category related to health and wellness that’s attracting interest from private brands is fresh produce. GoldenSun Insights, a Batavia, Ohio-based strategy-centric firm focused on the fresh produce supply chain, supports clients with strategy, business development and marketing, including in private label. President and co-owner Randy Riley notes that one way to add value is to create more sustainable packaging. Retailers also need to be as transparent as possible, whether through their messaging to consumers or by featuring social certification programs.

“The story behind the brands is going to be the biggest factor for private labels moving forward,” he predicts. “Consumers want to know the story behind who is growing their food and how it’s being grown, and a private label can hinder that a bit.”

Riley also notes that organic versions of private label are seeing development across the produce category.