Consumer demand for more fresh, organic and natural options. This fragmentation limits the potential for tiered, innovative and well-known private labels that convince shoppers to switch from branded goods. US organic food sales jumped by 8. Private label performs more strongly in an inflationary environment because price increases tempt shoppers to trade down from branded products.
Its still-small Wickedly Prime grocery range numbered just a few dozen products when we checked in late September. Start typing and press Enter to search. Amazon has been attempting to gain share in the grocery industry for years with the release of Amazon Fresh, Prime Now delivery, and its acquisition of Whole Foods in North Carolina, South Carolina and Virginia.
We think the very weak food-price inflation—and sporadic deflation—seen in the US in was a principal reason behind the abovementioned weakness in private-label CPG sales last year.
According to Coresight Researchthe company is still in the process of developing its private label grocery offerings. Online retailers have more control over what shoppers see, and what they recommend to shoppers, than do offline retailers, as in-store shoppers are presented with aisles of competing products in physical stores.
A number of retailers have led the way in developing natural or organic ranges. Store brand dollar sales year-over-year increased eightfold — to 3.
The US trails a number of comparable Western markets in terms of private-label grocery penetration. Expansion of grocery discounters Aldi and Lidl in the US could fuel competition in private label. Heightened consumer demand for more fresh, organic and natural foods.
This potential boost to private label is only the direct impact. Higher inflation in food prices this year than last year. Nevertheless, there look to be near-term opportunities to tap this market.
While this is a significant amount, there is still room for growth — good news for both national brands trying to keep market share and grocers trying to further innovate in private label.
Retailers can take advantage of several tailwinds to boost private-label grocery sales: Amazon and Whole Foods: Beyond meal kits, e-commerce provides further pockets of opportunity to boost private-label sales.
Once targeting financially conservative customers, private label brands have reformulated to include organic, gluten free, all-natural and prepared foods. We also see five tailwinds for grocery private-label growth in the US: Below, we chart the relationship between consumer prices inflation in food and beverages and the performance of private label relative to total grocery sales, according to IRI.
We see three reasons for this: Rival German discounter Aldi has been in the US for 40 years, but is now accelerating its expansion program.
The e-tailer also offers the Wickedly Prime snack brand, which includes products like chips, nuts, and tea. However, once grocery discounters are stripped out, the major European economies see relatively similar levels of private-label share as the US does, at around one-quarter of CPG sales.
We expect to see the Whole Foods acquisition provide a particular boost to the fresh food ranges available through the AmazonFresh delivery service, as private label tends to overindex in fresh food categories.
However, we see several tailwinds to growth, including the expansion of grocery discounters, innovation from Amazon and Whole Foods Market, and the popularity of meal kits.
Rising Food-Price Inflation Private label performs more strongly in an inflationary environment because price increases tempt shoppers to trade down from branded products. There may also be indirect impacts as competition from Aldi and Lidl prompts established grocery retailers to overhaul their own private-label offerings.
We think the strength of private label in fresh foods gives retailers a naturally strong position from which to develop natural and organic ranges. Blue Apron is the biggest non-private-label US meal-kit brand.THE STATE OF PRIVATE LABEL AROUND THE WORLD C T N Company 1 THE STATE OF PRIVATE LABEL AROUND THE WORLD WHERE IT’S GROWING, WHERE IT’S NOT, AND WHAT THE FUTURE HOLDS between name-brand and private-label products.
1 According to AdAge estimates. THE STATE OF PRIVATE LABEL. Grocers prefer private label brands because they have more control of what goes into the products, according to the National Retail Federation's Stores magazine.
They cut out middle-man costs.
Feb 09, · With the number of private label products increasing at the same time retailers have shed slower moving products, this post exams how, contrary to expectations, private labels improve the.
This led to a renewed increase in demand for private label fmcgs, with global sales jumping by 9% in current value. This was also partly attributable to an increase in private label prices in developed markets as a result of quality improvements, as several retailers developed premium ranges that competed directly with branded products.
It notes that grocery products are among the most-reviewed items in Amazon's private label portfolio. Private labels will increase dramatically over the next four or. Sponsored by L.E.K. Consulting. The Next Wave of Private Label. In the midst of the recession, U.S. market share of private-label grocery products had its biggest increase .Download