There’s no question sales of private-label brands are soaring right now, fuelled by double-digit food inflation as shoppers trade down and away from premium products, looking for lower-priced options.
“With rising costs, sticker shock forced consumers to prioritize value over brand name more than ever before,” Michael Della Penna, chief strategy officer for consumer-intelligence firm InMarket, said in an email to WGB. “Even older generations with higher household incomes switched to private-label brands to account for the stark increase in prices across categories like grocery and packaged goods.”
But some categories are seeing more private-label spend than others. Currently, more than 70% of all money spent on poultry, meat and seafood is going to private-label brands, InMarket found in a survey that compared private-label spending with comparable brand name products from January through September. Private-label spending on dairy products exceeds 73% of the category as a whole. At the same time, though, hoppers are more loyal to their favorite beverage and snack brands and are less likely to buy private-label brands in those categories, InMarket found.
“Products across the beverage and snack categories are cheaper compared to that of meat or poultry, so consumers are more comfortable paying a slightly higher price for their favorite soda brand,” Della Penna said. WGB editors racked up plenty of steps on the sprawling floor of this week’s Private Label Trade Show in Chicago, which drew more than 2,400 exhibitors.
Plant-based items
It seemed almost impossible to walk more than a couple of feet without encountering a vegan-friendly private-label item. They spanned grocery segments. We saw (and, in many cases, tasted) dairy-free cream cheese, pasta packed with chickpea protein, and vegan pastry pockets filled with vegan meat in a package adorned with the tagline, “I can’t believe it’s not vegan.” There was a wide variety of plant-based milk alternatives, meat-free deli meat and much more. Often, a product’s claims of being plant-based went hand-in-hand with its sustainability attributes (another huge trend).
Honey
Sales for the condiment, marinade and dressing category are expected to reach $2.9 billion by 2024, charting growth of more than 5% since 2020, according to Mintel research.
Could honey be added to this category? Honey seemed to be a popular item at the Private Label Manufacturers Association (PLMA) show. WGB spotted several varieties, including a creamy Spanish honey and some “hot honey,” no doubt to add some spice to a sweet recipe.
According to U.K.-based The Honey Association, honey is both a “classic and a fashionable ingredient,” appropriate for staples like salad dressings and barbecue sauces, as well as fusion foods and inventive desserts.
Pasta
We noted private-label pasta options down nearly every aisle, featuring noodles of all shapes and sizes. Organic, gluten-free and vegan. There was even Disney-themed pasta, kids’ pasta and baby pasta in teddy bear and space shapes. The abundance was understandable. Pasta was one of the most popular food staples during the pandemic, and one of the many items that consumers stocked up on, leaving shelves empty in some places. Consumers believe pasta to be an easy-to-store, healthy, easy-to-cook, sustainable food, according to the International Pasta Organization (IPO). Nine out of 10 Americans were eating it in 2020, and across the world, families consume it weekly, and in some cases, daily. World pasta consumption increased by more than 1 million tons and exceeded 17 million tons during the pandemic, IPO said.
Wines and spirits
The PLMA Show floor was filled with private label wines and spirits, as grocery retailers continue to seek the better margins these brands can bring. The show floor included an entire area dedicated to alcoholic beverages. Grocery retailers are continuing to make their wine department more profitable, Matthew Long, national sales manager for PAMPA Beverages, an international wine group with origins in the Argentinean wine industry, told WGB on the show floor. “Retailers are trying to compete with national brands and that is what private labels allow them to do, sometimes even better quality at lower price point and higher margins.” The private-label wine trend has been building for several years, Long said. “Over time, some retailers are so successful with their private brands and ability to select quality wines that consumers begin to trust them and prefer the private label, with Aldi and Costco as good examples.” Products in the spotlight on the trade show floor included an oak barrel-aged Spanish wine; single-serve Chilean reserve wine in a can; and natural wine with no added sulfites.
Sustainability
Consumer demand is pushing retailers to sell environmentally sustainable items, a growing trend evident from the show floor. We saw environmentally friendly plasticware packaged in cardboard rather than see-through plastic, enough eco-friendly tote bags to carry the world’s belongings and a whole host of compostable straws, plates, produce bags and much more.
When it comes to private label, though, a big question remains: Will consumers still flock to the products once inflation subsides or will they return to their national-brand favorites?
How those products are positioned and sold to consumers will play a big role in their sustained growth, InMarket’s Della Penna said. The pandemic has taught manufacturers and retailers alike a lot about consumer shopping behavior. “As consumers become increasingly less price conscious and as gas prices subside, spending on private-label products looks to be returning to normal levels,” Della Penna said. “It’s critical to tap the learnings and leverage ongoing economic pressures to drive visits, trial and purchase of private-label offerings to increase loyalty over the long term.”
See here for more: https://www.winsightgrocerybusiness.com/products/private-label-huge-right-now-here-are-trendiest-categories
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