Despite high inflation, private label brands have experienced growth, surpassing $217 billion in sales in the U.S. market. Circana’s report, “CPG Private Brands Update,” provides an update on the store brands landscape and identifies opportunities for retailers to increase demand for their store and private brand offerings.
“Private brands are increasingly capturing market share from store brands, experiencing growth in both dollar and unit sales,” said Mary Ellen Lynch, director of Center Store Solutions at Circana. “This trend is driven by consumers, particularly those with children, as well as Millennial and childless Generation X households, who are strategically employing a variety of methods to stretch their dollars amid high inflation.”
Current State of the Private Label Landscape
- Private label dollar sales increased 6% in 2023, and units increased 0.9%.
- Food and beverage private label sales were higher (6.7%) than non-food (5.1%).
- Private brands gained a share from name brands, increasing to 25.5% of total unit sales, up from 24.7% in 2022.
- Private brands grew in both units and unit shares in general grocery, long-life beverages, refrigerated foods, and the beauty and home departments.
- In food and beverages, private brands outperformed commercial brands in both dollars and unit share for the basic pantry.
- Retailers treat their brands similarly to national brands, innovating with cleaner labels, premium offerings, and marketing support.
Related Article: Steps to Build Your Supermarket’s Private Label Products
Who Buys Private Label Products?
- Households with children account for 35% of private label food and beverage purchases, while Millennials and Generation X households without children account for 36% of sales.
- Within those same cohorts, mid-level affluent shoppers are the most engaged with private brands, while low and high-affluent Millennials and Generation X households without children are driving growth.
Opportunities for Private Label Growth
- Consumers recognize the value of private brands, even in the savory snack aisle, where commercial brands tend to dominate.
- Retailers can focus on the ways consumers cook today and demonstrate how private brands work with small appliances, such as air fryers and instant pots, for easy-to-prepare meals.
- It is critical to promote store brands by leveraging digital marketing to appeal to valuable cohorts, such as younger shoppers.
- Retailers are increasingly focused on expanding shopper testing of their private-label products to bolster trust.