Store Brands

JAN 2017

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

Issue link:

Contents of this Issue


Page 36 of 77 / January 2017 / Store Brands 3 5 "They are smart enough to understand that, and realize that it doesn't make sense to pay more for the national brand," he notes. So if grocers and private label manufacturers continue to introduce quality products that match up to national brands, they'll be feeding right into millennials' hands. GAINING WITH ORGANICS p INSIGHT: FMI data reveals that organic private brands represent a small but growing segment of the industry. However, organic private brands are consistently capturing more share points of total organic sales. NEXT STEPS: Kristof says store brands are finding success in organics because no national organic brands are dominating any segments of the category, which could also bode well for future organic private brands. Organics are also popular among millennials, who prefer brands that support their local communities. The connection is that millennials perceive many organic products to have local origins. Organic food is also perceived to have many other benefits: pesticide-free, more sustainable and better for animal welfare. And while organic continues to represent an opportunity, Kristof believes the newer trend beyond organic is clean label and products featuring fewer ingredients. "Organic is great because you know the standards those products are sourced under. But you can still have an organic product with a long list of ingredients," Kristof adds, noting that more consumers want organic products with fewer ingredients that they can pronounce. WHERE PRIVATE BRANDS CAN IMPROVE q INSIGHT: Cleaning supplies and beer/wine/spirits top the list of private label products that heavy buyers of store brands avoid most. Duna says it has been difficult for private brands to break through in these categories because the national brands have had a stronger and longer foothold, and private brands haven't invested enough to drive innovation in the categories. Duna notes there is still a negative quality perception toward these items as private brand products, noting that most older consumers are more apt to use national brands in these categories because they simply believe they are better. NEXT STEPS: In the report, FMI says the poor quality perception of these products doesn't mean private brands are failing. "More likely it means that national brands have set a very high bar in certain categories, including in consistency and marketing, and have done a great job associating their products with high quality," the report states. While Duna says there are items among these products where flavors, textures and scent formulas are so distinct and unique that private brands haven't been able to replicate them, he believes private brands are getting close in some areas, such as with carbonated soft drinks. Duna also believes more investment is needed in these categories to improve store brands. "There are certainly private labels that do well, but they haven't broken through quite as well," he adds. SB Gaining with organics Private brands are consistently capturing more of a percentage of total organic sales. Total vs. Organic F&B (No Liquor) Dept Beverages Dept General Food Dept Frozen Dept Refrigerated 24% 30% 14% 23% 23% 40% 11% 16% 20% 31% Total Organic Where private brands can improve The percentage of heavy private label buyers who avoid these store brand products. Cleaning supplies Beer, wine, spirits Pet needs Personal care Cosmetics Soups Soft drinks Paper products Baby (diapers, wipes) Coffee/tea 24% 30% 14% 23% 23% 40% 11% 16% 20% 31%

Articles in this issue

Links on this page

Archives of this issue

view archives of Store Brands - JAN 2017