IRI: Name brands taking market share from private label7 Oct 2021
For the first time in a decade, private label brands are losing ground to national brands, according to data from the Chicago-based market research firm IRI. For the 52 weeks ending Sept. 19, brand name product sales were up 3.6% to $536 billion. However, private label only increased 1.5% to $142 billion.
These findings are a dramatic change from what has been an upward trajectory for private label brands. For years, store branded products were ahead of the curve, exceeding at adapting to consumer preferences in health and wellness as well as providing convenient alternatives for long-standing brands. The pandemic changed that.
In 2018, private brand dollar sales grew at a rate that was nearly six times the growth of national brand sales. In the span of two years, that growth trajectory was turned on its head. For the weeks ending Sept. 5, 2021, 79.1% of each food dollar went to national bands, compared to 20.9% for private label, IRI’s data showed.
This stark contrast in market share defied experts’ predictions that private label brands would continue to trend upwards as the pandemic brought economic uncertainty and job loss. A report from NielsenIQ in April found that the percentage of consumers that had become budget-conscious doubled between September and December.
Instead of more people purchasing store brands, the pandemic ushered in a hyper-consciousness among consumers for health and wellness and products that could deliver the attributes that they were seeking. At the same time, the pandemic has proved to be a boon for premiumization as consumers chose to spend their extra dollars on what they perceived to be higher-end products. Furthermore, as people stopped going out to eat and traveling to the office, they found themselves with additional disposable income that could be spent on brand label products.
Constrained shoppers that were missing the experience of dining out worked to replicate recipes and meals using ingredients they could find at the supermarket. Although a highly adaptable segment, private label is less developed in products that are using unique and innovative ingredients, according to NielsenIQ. This left an opening that brand name products looked to fill at the same time that manufacturers pared down the number of SKUs they sold in favor of prioritizing popular products amid supply chain constraints.
Supply chain issues not only affected the overall number of SKUs manufacturers produced, but it also may have hurt private label products as manufacturers chose to prioritize those products that brought higher margins.
Price margins are of immediate concern to manufacturers like Coca-Cola, Unilever, Danone and Nestlé that have indicated that prices for consumers will increase as a result of heightened raw material and transportation prices. As consumers do not have infinite wallets and pandemic-era government benefits are expiring in the U.S., there may yet be a resurgence of the private label brands that fell out of favor over the past year.
Additives in US food products up 10% since 2001
18 Jul 2023
New research revealed that 60% of foods purchased by Americans contained technical food additives as of 2019, which was a 10% increase since 2001.Read more
Industry first: The Netherlands approves cultivated meat and seafood tastings
17 Jul 2023
The Netherlands has become the first country in Europe to approve tastings of cultivated meat and seafood in controlled environments, yet there is still a long way to go before widescale commercialisation is achieved.Read more
One-fifth of Brazilian whey protein products mislabelled
12 Jul 2023
One fifth of whey protein products sold in Brazil are mislabelled, according to one small survey, as the Latin American trade association ALANUR calls on authorities to act against brands that inappropriately advertise the nutritional attributes of the...Read more
New Nordic nutrition guidelines emphasise plant-based eating
11 Jul 2023
Nordic scientists and experts are now recommending that people should consume less meat and more plants for both their health and the health of the planet.Read more
Manufacturers await groundbreaking aspartame safety review
10 Jul 2023
The WHO’s International Agency for Research on Cancer (IARC) is preparing to release its findings on whether the sweetener aspartame is a possible carcinogen.Read more
Food sector pushes unhealthy choices on consumers, new report shows
7 Jul 2023
Regulators and retailers must take action to prevent European consumers from being led to make unhealthy food choices, experts say.Read more
How to revive stagnating plant-based meat sales
6 Jul 2023
Sales of plant-based meat are stagnating, products are being withdrawn, and brands are declaring bankruptcy – but Rabobank’s RaboResearch has identified five strategies that could help revive the category, and precision fermentation could be an NPD gam...Read more
UK consumer trust in supermarkets falls to nine-year-low
5 Jul 2023
Research by UK consumer review organisation, Which?, reports decreasing levels of trust in the food industry, with two-thirds of shoppers feeling ripped off.Read more
UK retailers flout unhealthy product regulation
4 Jul 2023
UK retailers are continuing to promote unhealthy products that are high in fat, salt, and sugar (HFSS) despite recent regulation that bans such practices.Read more
Are Dutch supermarkets committed to human rights?
3 Jul 2023
Dutch supermarkets lack widespread measures to respect human rights in supply chains, research project Superlist Social's inaugural report finds.Read more