Table of Contents
Executive Summary
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- Weak economy and improved quality of offerings drive growth
- Innovation and value drive strong performance at some retailers
- Private label strongest in staples
- Many unable to differentiate between private label and national brands
- Overall, most feel that private label quality is equal to national brand
- Private labels increasing share of market
- Baking, bread and bakery
- Cheese, dairy and eggs
- Canned foods
- Fish and meat
- Jams, jellies and refrigerated spreads
- Oils, dressing and condiments
- Frozen foods and frozen desserts
- Rice, pasta, snacks, chips and nuts
- Drinks
Insights and Opportunities
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- Offer in-store samples to demonstrate quality of private label products
- Provide ways for customers to engage with the product
- Provide products that help consumers achieve healthy living goals
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- Figure 1: Eating healthier than last year, by household income, October 2010
- Provide recipes that include private label products to entice home chefs
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- Figure 2: Cooking more at home than last year, by household income, October 2010
- Figure 3: Consumer Price Index for key consumer markets, June 2008-10
- Highlight a money back guarantee on private label purchases
Inspire Insights
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- Trend: Experience is All
Market Size and Trends
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- Sales growth accelerates in response to recession
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- Figure 4: FDMx private label food and drink sales and forecast, at current prices, 2005-15
- Figure 5: FDMx private label food and drink sales and forecast, at inflation-adjusted prices, 2005-15
- Fan-chart forecast
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- Figure 6: FDMx private label food and drink sales and forecast at current prices, (2005-15) with worst and best cases
- Bakery and dairy lag other sectors in PL growth
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- Figure 7: FDMx sales of private label food and drink, by category, 2004-10
- Figure 8: Year-over-year change in FDMx sales of private label, by category, 2004-10
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- Figure 9: Indexed growth of FDMx sales of private label food and drink, by category, 2004-10
Market Drivers
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- Key points
- Macroeconomic conditions contribute to demand for private label options
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- Figure 10: Unemployment and underemployment rate in the U.S., January 2007-November 2010
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- Figure 11: Median household income in inflation-adjusted dollars, 1999-2009
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- Figure 12: Spending more time looking for sales and bargains than last year, by household income, October 2010
- Confidence wanes; most spending more time looking for bargains
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- Figure 13: Consumer Sentiment, January 2007-October 2010
- Healthy living trend driving performance of some private labels
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- Figure 14: Incidence of presently watching/controlling diet, May 2004-March 2009
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- Figure 15: Attributes diet-watchers look for in food, 2006 and 2009
- Private label products often seen as comparable to national brands
Marketing Strategies
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- Key points
- Overview
- Summary of in-store observations
- Safeway: SELECT
- Social media
- Television
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- Figure 16: Safeway Thanksgiving television ad, 2010
- Circulars
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- Figure 17: Safeway circular ad, meat, 2010
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- Figure 18: Safeway circular ad, bakery, 2010
- Figure 19: Safeway circular ad, SELECT prepared meals, 2010
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- Figure 20: Safeway circular ad, SELECT chocolate bars, 2010
- Target: Archer Farms
- Customer quotes from target.com
- Television
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- Figure 21: Target television ad, 2010
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- Figure 22: Target television ad, 2010
- Whole Foods: 365 Everyday Value
- Customer quotes from wholefoodsmarket.com
- Kmart: Smart Sense
- Kmart solicits customer feedback
Leading Companies — Who’s Getting It Right?
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- Key points
- Combination of innovative premium and value-oriented labels drive growth
- Safeway: SELECT
- Whole Foods: 365 Everyday Value
- Trader Joe’s
- Costco: Kirkland Signature
- Private label activity
- Costco on Facebook
- Target: Archer Farms
- Walmart: Great Value
- Supervalu: Shopper’s Value
Consumer Likelihood of Buying Private Label Products
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- Key points
- Many purchase private label bread, dairy and packaged meal elements
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- Figure 23: Likelihood of buying store brands, by food category, September 2010
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- Figure 24: Likelihood of buying store brands, by drink type, September 2010
- Private label purchase incidence compared to last year
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- Figure 25: Private label purchase incidence compared to last year, by product category, September 2010
Baking, Bread and Bakery
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- Key points
- Products baked on premises among most popular private label products
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- Figure 26: Incidence of household use of name brand vs. store brand, baking, bread and bakery, April 2009-June 2010
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- Figure 27: Trends in household use of store brand baking, bread and bakery, 2003-10
- Sales of sweeteners skyrocketed between 2005 and 2010
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- Figure 28: FDMx sales of baking, bread and bakery, by private label and national brand, with share and growth of private label share, 2010*
- The demographics of buying store brand baking, bread and bakery
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- Figure 29: Incidence of usually buying store brand baking, bread and bakery, by household income, September 2010
- Flavored oatmeal becoming more common; Family Dollar going gourmet
Cheese, Dairy and Eggs
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- Key points
- Majority show preference for private label eggs
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- Figure 30: Incidence of household use of name brand vs store brand, cheese, dairy and eggs, April 2009-June 2010
- Increased usage of private label cheese drives significant sales gains
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- Figure 31: Trends in household use of store brand cheese, dairy and eggs, 2003-10
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- Figure 32: FDMx sales of cheese, dairy and eggs, by private label and national brand, with share and growth of private label share, 2010*
- The demographics of buying store brand cheese and other dairy
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- Figure 33: Incidence of usually buying store brand cheese and other dairy, by age, September 2010
- Figure 34: Incidence of usually buying store brand cheese and other dairy, by household income, September 2010
- Variety of new dairy products coming online
Canned Foods
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- Key points
- Many still hesitant to use private label canned products
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- Figure 35: Incidence of household use of name brand vs store brand, canned foods, April 2009-June 2010
- Increased use of canned tomatoes and broth reflects cooking trend, drives sales
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- Figure 36: Trends in household use of store brand canned foods, 2003-10
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- Figure 37: FDMx sales of canned foods, by private label and national brand, with share and growth of private label share, 2010*
- Demographics of private label soup, packaged fruit and vegetable users
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- Figure 38: Incidence of usually buying store brand soup, packaged fruit and vegetables, by key demographics, September 2010
- More premium soups with aseptic packaging
Fish and Meat
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- Key points
- Private label meat and seafood sales are rising
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- Figure 39: Incidence of household use of name brand vs store brand, fish and meat, April 2009-June 2010
- Private label seafood sales on the rise as sales of frankfurters decline
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- Figure 40: FDMx sales of fish and meat, by private label and national brand, with share and growth of private label share, 2010*
- Few significant differences between demographic segments
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- Figure 41: Incidence of usually buying store brand fish, meat and poultry, by key demographics, September 2010
- Value-priced premium options becoming more common
Jams, Jellies and Refrigerated Spreads
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- Key point
- Consumers stick with name brand peanut butter, even during recession
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- Figure 42: Incidence of household use of name brand vs store brand, jams, jellies and refrigerated spreads, April 2009-June 2010
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- Figure 43: Trends in household use of store brand jams, jellies and refrigerated spreads, 2003-2010
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- Figure 44: FDMx sales of jams, jellies and refrigerated spreads, by private label and national brand, with share and growth of private label share, 2010*
- Lower income and older consumers more likely to buy private label
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- Figure 45: Incidence of usually buying store brand peanut butter, jams, jellies and preserves, by key demographics, September 2010
- More standard and premium options introduced in 2010
Oils, Dressing and Condiments
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- Key points
- Though brand name ketchup use quite high, many use store brands
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- Figure 46: Incidence of household use of name brand vs store brand, oils, dressing and condiments, April 2009-June 2010
- Most consumers remained loyal to brand names during recession
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- Figure 47: Incidence of usually buying store brand mayonnaise and dressing, by key demographics, September 2010
- FDMx sales growth driven by cooking trend
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- Figure 48: Trends in household use of store brand oils, dressing and condiments, 2003-2010
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- Figure 49: FDMx sales of oils, dressing and condiments, by private label and national brand, with share and growth of private label share, 2010*
- New products designed for those making inexpensive meals at home
Frozen Foods and Frozen Desserts
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- Key points
- Ice cream and frozen vegetables popular private label frozen foods
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- Figure 50: Incidence of household use of name brand vs. store brand, frozen foods and desserts, April 2009-June 2010
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- Figure 51: FDMx sales of frozen foods and frozen desserts, by private label and national brand, with share and growth of private label share, 2010*
- Low income households key for PL frozen
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- Figure 52: Incidence of usually buying store brand frozen foods and desserts, by household income, September 2010
- More premium and ethnic SKUs come online in 2009 and 2010
Rice, Pasta, Snacks, Chips and Nuts
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- Key points
- One in four buy private label pasta
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- Figure 53: Incidence of household use of name brand vs store brand, rice, pasta, snacks, chips and nuts, April 2009-June 2010
- Staples used to cook meals at home drive category growth
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- Figure 54: Trends in household use of store brand rice, pasta, snacks, chips and nuts, 2003-10
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- Figure 55: FDMx sales of rice, pasta, snacks, chips and nuts, by private label and national brand, with share and growth of private label share, 2010*
- Private label appeals most to households with incomes below $50K
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- Figure 56: Incidence of usually buying store brand rice, pasta, snacks, chips and nuts, by household income, September 2010
- Retailers introduced more enriched pasta and premium snacks in 2010
Drinks
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- Key points
- Drinks among the least popular private label category
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- Figure 57: Incidence of household use of name brand vs. store brand, drinks, April 2009-June 2010
- BFY options could drive sales growth
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- Figure 58: FDMx sales of drinks, by private label and national brand, with share and growth of private label share, 2010*
- Private label drinks most popular with low and middle income shoppers
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- Figure 59: Incidence of usually buying store brand drinks, by household income, September 2010
- Most private label drinks appear value-oriented, non-premium
Ability to Identify Private Label and Name Brands
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- Key point
- Most are unsure whether private labels are store brands or national brands
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- Figure 60: Ability to identify store vs. name brands, September 2010
- Higher income consumers more familiar with brand types
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- Figure 61: Identification of store brands as store brand/name brand, by household income, September 2010
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- Figure 62: Identification of name brands as store brand/name brand, by household income, September 2010
Attitudes and Beliefs Regarding Store Brands
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- Key points
- Consumers generally view private label and national brands as equals
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- Figure 63: Perceptions of quality, store brand vs. name brand, by product category, September 2010
- 55+ segment most likely to hold favorable attitudes toward private label
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- Figure 64: Attitudes and beliefs regarding store brands, by age, September 2010
- Affluents generally favorable towards private labels
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- Figure 65: Attitudes and beliefs regarding store brands, by household income, September 2010
- Most open to trying new products
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- Figure 66: Influencers of and interest in new products, by age, September 2010
Cluster Analysis
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- Moderate Users
- Demographics
- Characteristics
- Opportunity
- Brandies
- Demographics
- Characteristics
- Opportunity
- Proclaimers
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 67: Private label clusters, September 2010
- Figure 68: Attitudes and beliefs regarding store brands, by private label clusters, September 2010
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- Figure 69: Perceptions of quality, store brand vs name brand, consider name brand as better quality, by product category, by private label clusters, September 2010
- Figure 70: Perceptions of quality, store brand vs name brand, consider no difference between name brand and private label, by product category, by private label clusters, September 2010
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- Figure 71: Influencers of and interest in new products, by private label clusters, September 2010
- Cluster demographics
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- Figure 72: Private label clusters, by gender, September 2010
- Figure 73: Private label clusters, by age, September 2010
- Figure 74: Private label clusters, by household income, September 2010
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- Figure 75: Private label clusters, by race/Hispanic origin, September 2010
- Cluster methodology
Appendix: Additional Consumer Tables
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- Gender
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- Figure 76: Identification of store brands as store brand/name brand, by gender, September 2010
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- Figure 77: Attitudes and beliefs regarding store brands, by gender, September 2010
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- Figure 78: Influencers of and interest in new products, by gender, September 2010
- Age
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- Figure 79: Incidence of usually buying store brand baking, bread and bakery, by age, September 2010
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- Figure 80: Incidence of usually buying store brand frozen foods and desserts, by age, September 2010
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- Figure 81: Incidence of usually buying store brand rice, pasta, snacks, chips and nuts, by age, September 2010
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- Figure 82: Incidence of usually buying store brand drinks, by age, September 2010
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- Figure 83: Identification of name brands as store brand/name brand, by age, September 2010
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- Figure 84: Identification of store brands as store brand/name brand, by age, September 2010
- Household income
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- Figure 85: Influencers of and interest in new products, by household income, September 2010
- Race and Hispanic origin
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- Figure 86: Attitudes and beliefs regarding store brands, by race/Hispanic origin, September 2010
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- Figure 87: Influencers of and interest in new products, by race/Hispanic origin, September 2010
- Region
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- Figure 88: Incidence of usually buying store brand baking, bread and bakery, by region and urban status, September 2010
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- Figure 89: Incidence of usually buying store brand cheese and other dairy, by region and urban status, September 2010
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- Figure 90: Incidence of usually buying store brand frozen foods and desserts, by region and urban status, September 2010
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- Figure 91: Incidence of usually buying store brand rice, pasta, snacks, chips and nuts, by region and urban status, September 2010
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- Figure 92: Incidence of usually buying store brand drinks, by region and urban status, September 2010
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- Figure 93: Attitudes and beliefs regarding store brands, by region, September 2010
- Presence of children
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- Figure 94: Incidence of usually buying store brand cheese and other dairy, by gender and presence of children, September 2010
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- Figure 95: Incidence of usually buying store brand frozen foods and desserts, by gender and presence of children, September 2010
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- Figure 96: Incidence of usually buying store brand rice, pasta, snacks, chips and nuts, by gender and presence of children, September 2010
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- Figure 97: Incidence of usually buying store brand drinks, by gender and presence of children, September 2010
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- Figure 98: Identification of store brands as store brand/name brand, by presence and number of children, September 2010
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- Figure 99: Identification of name brands as store brand/name brand, by presence and number of children, September 2010
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- Figure 100: Attitudes and beliefs regarding store brands, by presence and number of children, September 2010
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- Figure 101: Influencers of and interest in new products, by number and presence of children, September 2010
- Purchase of private label personal care and household products
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- Figure 102: Likelihood of buying store brands, by personal care category, September 2010
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- Figure 103: Likelihood of buying store brands, by household goods category, September 2010
Appendix: FDMx Category Sales Forecast
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- Bakery
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- Figure 104: FDMx private label bakery sales, at current prices, 2005-15
- Figure 105: FDMx private label bakery sales, at inflation-adjusted prices, 2005-15
- Dairy
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- Figure 106: FDMx private label dairy sales, at current prices, 2005-15
- Figure 107: FDMx private label dairy sales, at inflation-adjusted prices, 2005-15
- Deli
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- Figure 108: FDMx private label deli sales, at current prices, 2005-15
- Figure 109: FDMx private label deli sales, at inflation-adjusted prices, 2005-15
- Edible
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- Figure 110: FDMx private label edible sales, at current prices, 2005-15
- Figure 111: FDMx private label edible sales, at inflation-adjusted prices, 2005-15
- Frozen
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- Figure 112: FDMx private label frozen sales, at current prices, 2005-15
- Figure 113: FDMx private label frozen sales, at inflation-adjusted prices, 2005-15
Appendix: Additional FDMx Sales Estimates
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- Baking, bread and bakery
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- Figure 114: FDMx sales of baking, bread and bakery, 2005-10*
- Figure 115: FDMx sales of private label baking, bread and bakery, 2005-10*
- Cheese, dairy and eggs
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- Figure 116: FDMx sales of cheese, dairy and eggs, 2005-10*
- Figure 117: FDMx sales of private label cheese, dairy and eggs, 2005-10*
- Canned foods
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- Figure 118: FDMx sales of canned foods, 2005-10*
- Figure 119: FDMx sales of private label canned foods, 2005-10
- Fish and meat
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- Figure 120: FDMx sales of fish and meat, 2005-10*
- Figure 121: FDMx sales of private label fish and meat, 2005-10*
- Jams, jellies and refrigerated spreads
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- Figure 122: FDMx sales of jams, jellies and refrigerated spreads, 2005-10*
- Figure 123: FDMx sales of private label jams, jellies and refrigerated spreads, 2005-10*
- Oils, dressing and condiments
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- Figure 124: FDMx sales of oils, dressing and condiments 2005-10*
- Figure 125: FDMx sales of private label oils, dressing and condiments 2005-10*
- Frozen foods and frozen desserts
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- Figure 126: FDMx sales of frozen foods and frozen desserts, 2005-10*
- Figure 127: FDMx sales of private label frozen foods and frozen desserts, 2005-10*
- Rice, pasta, snacks, chips and nuts
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- Figure 128: FDMx sales of rice, pasta, snacks, chips and nuts, 2005-10*
- Figure 129: FDMx sales of private label rice, pasta, snacks, chips and nuts, 2005-10*
- Drinks
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- Figure 130: FDMx sales of drinks, 2005-10*
- Figure 131: FDMx sales of private label drinks, 2005-10*
Appendix: Trade Associations
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