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Private Label, National Brands Have Opportunity for GrowthPrivate Label, National Brands Have Opportunity for Growth

December 18, 2013

2 Min Read
Private Label, National Brands Have Opportunity for Growth

CHICAGOPrivate label and national brands' shares of sales remained unchanged this past year, with private label and share of dollar sales increasing slightly due to above-average price inflation within the private label sector, according to new market data from Information Resources Inc. (IRI). However, the Private Label and National Brands report shows that the "new normal" puts value in the crosshairs of every purchase decision and paves new roads of opportunity for private label and national brand consumer packaged goods (CPG) marketers.

While some industry experts believe private label has had its day, IRI believes that private label and national brand marketers can enjoy mutual growth by not simply co-existing, but rather evolving and working together to serve the full spectrum of consumers needs and wants," Susan Viamari, editor of Times & Trends, IRI said. Of course, consumers are shopping conservatively and looking for money-saving options, so they have embraced private label. However, national brands remain critical. In this environment, manufacturers and retailers must work together to provide a balanced assortment of national and private label solutions, targeted at the store level, to offer the best overarching value."

The grocery channel has seen the highest private label share at 21.9% of unit sales and 18.2% of dollar sales. In addition, the grocery private label landscape demonstrated the highest infiltration at 96.9%.

Private label share of volume increased across five of the 10 largest private label categories during the past three years. These categories are viewed as staple" categories, since consumers tend to see little differentiation between private label and national brand options in these categories. Combined, share victories brought more than $2.6 billion to private label marketers top lines during the past year alone.

National brands are also demonstrating strength in important private label categories. During the same period, national brand marketers gained ground in the remaining top five private label categories, increasing the revenue they generate in these categories by a combined total of more than $1.7 billion across IRIs multi-outlet geography. The biggest win for national brands is in the vitamins category, where volume share climbed 6.9 points since 2010.

In the coming months and years, consumers will continue to look to both national brands and private label solutions to find the best value for their money.

Private label is clearly here to stay," Viamari said.  For private label to prosper, it is critical for private label marketers to understand the role of their brands in relation to competing national brands. And, national and private brand marketers must step up their collaborative focus, directing their efforts to retailer/manufacturer partners that best fit their strategic goals and objectives. This type of strategic collaborative marketing partnership will increase sales and strengthen customer loyalty by getting the right products to the right place at the right time, with a targeted value proposition."

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