Acosta: it's all about brand strategy

14 Jun 2018

As the brick-and-mortar grocery industry faces increasing competition from all angles, an effective brand strategy can be the key to sustained success for retailers, according to Acosta.

Acosta: it's all about brand strategy

As the brick-and-mortar grocery industry faces increasing competition from all angles, an effective brand strategy can be the key to sustained success for retailers, according to Acosta – a full-service sales and marketing agency in the consumer packaged goods industry, and the company’s Why Brands Matter report. Shoppers, it says, turn to different brands for different needs and seek a balance when it comes to retailers and brand offerings.

“Brands are the fuel that powers shoppers to make more trips, spend more per trip and stay loyal to products and channels,” said John Clevenger, Managing Director and Senior Vice President, Strategic Advisors, at Acosta. “National brands continue to dominate, with a worth of over $558 billion in 2017, compared to $124 billion for private label brands, which are marketed by the retailer under their own brand and typically positioned as lower-cost alternatives to national brands. A study of more than 100 retailers revealed that the retailers growing both national and private label brands are experiencing the best overall growth, proving that a strategic mix is key.”

Acosta’s 2018 Why Brands Matter report takes an in-depth look at the value and current state of US national and private label brands, highlighting:

Why Brands Matter

+ While there are a variety of reasons shoppers may choose a private label brand, cost savings is the primary driver.

+ Many shoppers view purchasing private label brands (or store brands) as a compromise; overall, shoppers view national brands to be superior to their private label brand counterparts in most categories.

+ Shoppers felt “name brands are better than store brands” in 41 out of 53 categories.

+ Shoppers felt “name brands and store brands are ‘about the same’” in 12 out of 53 categories.

+ Shoppers felt “store brands are better than name brands” in 0 out of 53 categories.

+ Shopping trips driven by national brand purchases are more valuable than private label brand trips on average by 65%.

+ The top three reasons shoppers said they purchased national brand products while grocery shopping were:

+ “National brand products are higher quality in taste and/or performance.”

+ I can get better deals on national brands (through sales/coupons).”

+ “I trust national brand products more.”

Not All Categories Are Created Equal

+ Generally, the more personal, innovative and differentiated the category, the more likely a shopper will choose a national brand over a private label brand.

+ Several of the categories for which shoppers indicated they purchased national brands “exclusively” or “mostly” are personal care products used on or applied to the body.

+ Nearly all of the categories for which shoppers reported “exclusively” or “mostly” selecting private label brands tend to contain staple items that are consumed.

The Value Channel is Growing

+ Value is one of the fastest growing channels.

+ While the value channel has a large emphasis on private label brands, this isn’t necessarily what is driving shopper traffic. Shoppers reported that the highest influencers driving them to the value channel are best everyday prices (49%), better value for their money (47%) and cost savings/help with budget (45%).

+ Despite its growth, the value channel has limited appeal among a limited base of fans. Shoppers that frequent the grocery and mass/super channels find that value retailers fall short in fresh foods, convenience and promotions.

“To craft the best possible brand strategy, use research and analysis to help strike the right balance with national and private label brands in each department and category,” added Clevenger. “A clear takeaway for retailers is that they should understand the different roles national and private brands play. Manufacturers should concentrate on telling a compelling brand story and selling their expertise and understanding to build a brand connection with shoppers.”

Acosta’s 2018 Why Brands Matter report was completed via an online survey of the company’s customer shopper community panel as well as multiple Nielsen research reports.

Related news

Gen Z consumers are thirsty for variety in beverages

Gen Z consumers are thirsty for variety in beverages

31 May 2022

As Gen Z consumers gain disposable income, they are looking to quench their thirst with beverage brands that are clean, sustainable and socially responsible, according to a report from the global consumer trend forecaster WGSN.

Read more 
Tea flavour innovation in China unites tradition with modernity

Tea flavour innovation in China unites tradition with modernity

13 Apr 2022

Chinese tea brands are innovating with new flavours, blends and formats, and even making a foray into food with tea-flavoured food and drink launches.

Read more 
Low- and no-alcohol beverages see significant growth globally

Low- and no-alcohol beverages see significant growth globally

11 Apr 2022

Alcohol-free and low-alcohol beverages are helping drive growth for many alcohol manufacturers that have been struggling to adapt to the changing tastes of the market in recent years.

Read more 
Baby formula brands innovate with clean label launches

Baby formula brands innovate with clean label launches

7 Apr 2022

Clean label baby food is receiving a significant amount of development, with two recent brands ByHeart and Bobbi launching formulations certified by the Clean Label Project with a Purity Award.

Read more 
Consumers seek ashwagandha-fueled relaxation in beverages

Consumers seek ashwagandha-fueled relaxation in beverages

28 Mar 2022

Ashwagandha has been used in India for centuries, and it is only in recent years that consumers in the US and now Europe are realising its health benefits, with manufacturers starting to add this adaptogen to beverage formulations.

Read more 
A new brew: Ayurvedic coffee in India, adaptogenic coffee from Finland

A new brew: Ayurvedic coffee in India, adaptogenic coffee from Finland

10 Mar 2022

Coffee is probably one of the world’s most popular functional beverages, providing millions with their daily caffeine hit. However, some brands are taking its functional benefits further by adding in botanicals, vitamins, and other nutrients.

Read more 
Coca-Cola is spreading itself outside beverages to expand its market

Coca-Cola is spreading itself outside beverages to expand its market

28 Feb 2022

With 130 years of experience behind the brand Coca-Cola, it would be easy to imagine that the brand would be comfortably reliant on one of its 15 billion-dollar brands that make up the portfolio of one of the largest beverage companies in the world.

Read more 
Microdrink startup Waterdrop expands in US, looks to move global

Microdrink startup Waterdrop expands in US, looks to move global

24 Feb 2022

Australian beverage startup Waterdrop has raised €60 million ($70 million) in a Series B funding round led by Singapore-based investment firm Temasek. The startup, which makes microdrinks — water-soluble, sugar-free cubes packed with plant-b...

Read more 
Synthesising volatile aroma compounds to make alcohol-free beer taste better

Synthesising volatile aroma compounds to make alcohol-free beer taste better

18 Feb 2022

A Danish startup is using synthetic biology to produce the volatile aroma compounds that are lost when brewers make low- and no-alcohol beer.

Read more 
Can sugar-reducing tech revive falling fruit juice sales?

Can sugar-reducing tech revive falling fruit juice sales?

12 Feb 2022

Better Juice’s naturally sugar-reduced fruit juice will hit US supermarket shelves in spring 2022 thanks to a partnership with GEA. Could this turn around the long-term decline in fruit juice sales?

Read more