With rising prices, consumers are feeling less financially secure. Bread Financial’s survey found that more than half (59%) of middle class U.S. consumers are concerned about inflation and are adapting their spending habits as a result. According to the Food Industry Association (FMI), 39% of shoppers said they are concerned about being able to afford the food they need. Nearly 70% of respondents said they are very or extremely concerned with retail food inflation, and 68% reported concerns with the prices rising for foods they prefer. Business consulting firm EY’s research Future Consumer Index surveyed over 23,000 consumers from 30 different countries. 55% of people were concerned about the rising cost of living, which has in turn driven 72% of them to be more focused on value for money in 2024. In response, consumers are turning to private label brands. 66% said that they found private label products just as good as branded alternatives, while 38% said that they would not switch back to branded goods. Furthermore, higher income consumers were planning to buy private label brands in the future and are considering this across every category, including fresh food (60%); home and household care (56%); packaged food (52%); clothing, shoes and accessories (49%); personal care (49%); and beauty and cosmetics (39%). According to the Kearney 2024 Private Label Report in conjunction with NielsenIQ, in 2023, private label dollar sales across the food and beverage, household essentials, beauty and personal care, and fashion and apparel categories rose 12% to $225 billion. By 2030, private label is forecast to account for 24% of dollar sales across these categories, with national brands representing 76% of sales. Consumer’s interest in private labels is driving store brand share growth. The research revealed more than half of shoppers ranked store brands as having a similar quality to national brand counterparts in food and beverages (55%), household essentials (59%) and personal care (53%), while just under half (46%) thought so with beauty care and fashion/apparel.
NATIONAL AND MULTINATIONAL STORE BRANDS
National and multinational brands are creating private label brands to capture consumers’ attention and make products affordable and accessible. Walmart introduced Bettergoods, its latest private brand innovation. The brand is “a fresh take on the culinary experience with elevated taste, flavor, and variety that’s approachable and – most importantly – affordable” with most products available for under $5. Bettergoods is divided into three distinct category pillars: Culinary Experiences, Plant-based, and “Made Without,” and offers 300 items spanning 50 categories. Kroger added Field & Vine, a new private brand of produce grown by U.S. farmers. The line includes blueberries, blackberries, raspberries, and strawberries. Sprouts Farmers Market, the natural and organic specialty retailer launched its own line of body care, personal care, and home fragrance products. Real Root by Sprouts includes hair care products, Epsom salt with fragrance, bar and hand soaps, body wash, bath products, deodorant, and home fragrance. The products are cruelty-free and free from parabens, phthalates, artificial fragrances, colors, and skin irritants. Stop & Shop released Taste of Inspirations a new private label line of coffee in seven blends. The Cozy Cabin is a nutty, creamy flavor with sweet notes while Mellow Moonlight, a decaffeinated option, combines “a creamy body with subtle suggestions of toasted graham cracker.” For the fall, Target announced its grocery aisles will include more than 150 private label items. Albertsons unveiled Overjoyed, its newest own brand. The line features cupcakes, cookies, cheesecakes, sprinkles, trail mixes, candles, and liners. Overjoyed Boutique is an extension, which features decorative vases, candles, and seasonal gifts. Amazon joins the fray with Amazon Saver its private label brand. Amazon Saver “is a no-frills brand that will help grocery budgets go further and offers affordable grocery essentials both in-store and online.” Amazon has started to roll out several products such as crackers, cookies, canned fruit, and condiments with more than 100 items in the pipeline. Most products are priced under $5, and Prime members can get an additional 10% off. Fareway unveiled its latest private label brand, dubbed Truly Yours. The first wave of products include chocolate assorted truffles, dark and milk chocolate sea salt caramels, carrot cake, crème brulee & chocolate chip sandwich cookies, and Southern pecan, lemon and chocolate chess mini pies.
PHARMACIES FOCUS ON BETTER-FOR-YOU PRODUCTS
Pharmacies are in the mix and their latest focus is on healthier, better-for-you products. Walgreens debuted Nice! For You, a new tier of its popular owned grocery brand, Nice! to support healthier lifestyles. The line is free of artificial flavors, artificial sweeteners, synthetic dyes, and high-fructose corn syrup. Several of the formulations are also organic and gluten-free. CVS launched Well Market, a new store brand of 40 consumables featuring snacks, beverages, and groceries. Described as “a fusion of nutritious options and irresistible flavors,” the line focuses on consumers’ wellness journey with products that contain no artificial preservatives, sweeteners, or colors, and 0 grams of trans fats. Walgreens released its new premium skin care line, “designed to give customers premium quality without the premium price tag.”
CONVENIENCE STORES ZOOM IN ON SNACKS
Convenience stores want in on the action and have been rolling out new private label offerings. For example, West Coast convenience retailer Loop Neighborhood Market has launched its private label brand Delish Candy and Snacks, which includes 10 gummy candy varieties and several nut mixes. 7-Eleven introduced two private label functional beverages – 7-Select Fusion Energy and 7-Select Rehydrate. 7-Eleven noted in its second-quarter earnings that it had released 87 new products in its private brand line and expects to reach 215 by the end of this year. During an investor earnings call, Casey’s General Store President Darren Rebelez mentioned plans to grow its private label program. Currently, Casey’s has 320 private label items with another 20 in development. TXB in Texas offers a new line of non-GMO, locally sourced private-label products such as trail mix, nuts and seeds, and chocolate and candy. All private label offerings from TXB are locally sourced, manufactured, produced, bottled, or bagged in Texas.
Once private label store brands were no frills and lackluster. Now private label brands are competitive. Consumers seek value and private label brands are delivering. Watch as more national and multinational brands create their own products.
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