Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Private label food sales continue to grow, but more slowly
- Economics are key drivers
- Retailer activity also supports sales, drives positive perceptions
- National brands fight back on a changing playing field
- Private label up overall, but dynamics differ from category to category
- Private label share lowest in edible department, where strong national brands compete
- Private label share highest in relatively commoditized dairy department
- Frozen department private label sales cool off after strong growth in 2008-09
- Only modest private label share gains in bakery department
- Rising meat prices since 2009 boost private label deli department sales
- Retail channels: supermarkets still dominate
- Retailer activity and innovation
- Private label marketing presents opportunity to build deeper relationships
- Who’s buying: store brand demographics
- Additional findings from Mintel’s consumer research
- Shoppers perceive heavy private label purchases
- Name brands still get credit for consistent quality, but store brands are catching up
- Perceptions of parity alone don’t necessarily translate to loyalty for store brands
- New varieties and flavors can tip the scale in favor of name brands, or vice versa
- Store brands can shape store image, influence store selection
- Value-seeking black and Hispanic consumers show interest in store brands
Insights and Opportunities
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- How can we help you?
- Instead of looking for products to replicate, look for problems to solve
- So what’s the problem?
- What’s in a name?
Inspire Insights
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- Inspire Trend: Prove it
- Inspire Trend: Cool Vending
Market Size and Forecast
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- Key points
- Private label food sales continue to grow
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- Figure 1: FDMx sales and forecast of private label food at current prices, 2006-16
- Figure 2: FDMx sales and forecast of private label food at inflation adjusted prices, 2006-16
- After peaking in 2008, private label share growth moderates
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- Figure 3: FDMx sales of food, private label food, and private label market share, 2006-11
- Fan chart forecast
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- Figure 4: Fan chart forecast of FDMx sales of private label food, at current prices, 2006-16
Market Drivers
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- Overview
- Household income
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- Figure 5: Median household income in inflation-adjusted dollars, 2000-10
- Consumer confidence
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- Figure 6: University of Michigan’s index of consumer sentiment, January 2006-August 2011
- Inflation
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- Figure 7: Food inflation rates for 2005-2010 and forecasts for 2011-12
- Private label accounts for a larger share of new product activity
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- Figure 8: Name brand and private label food new product launches, 2006-11
- Perceptions of store brand quality support growth, suggest potential
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- Figure 9: Perceptions of store brand quality, August 2011
Competitive Context
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- Private label share growth slows as national brands fight back
- Aggressive retail trade promotion closes price gap a little
- Name brand strength benefits retailers as well
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- Figure 10: Stop & Shop uses brands on flyer front page 2011
- Price-driven flanker brands go head to head with store brands
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- Figure 11: Kraft “Simply” uses value brand look, 2011
- Added-value line extensions can help to set brands apart
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- Figure 12: Green Giant added-value line extensions, 2011
- Taking the competition to another level
Segment Performance Overview
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- Private label sales up in all departments, more so in some than others
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- Figure 13: FDMx sales of private label food at current prices, by segment, 2006-16
- Figure 14: FDMx sales of private label food, by segment, 2010 and 2011
Segment Performance—Edible
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- Key points
- Big companies and brands still hold sway in edible department
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- Figure 15: FDMx sales and forecast of private label edible, 2006-16
- After rising in 2008 and 2009, private label share nearly flat
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- Figure 16: FDMx total sales and private label sales, edible, 2006-11
- Canned and jarred goods
- Vegetables and fruits lead the private label pack
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- Figure 17: Edible department FDMx sales and private label share, by select canned and jarred goods categories, 2006-11
- Ingredients/components
- Home meal prep helps drive ingredient/component category sales
- Flavored rice a possible platform for private label growth
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- Figure 18: Edible department FDMx sales and private label share, by select ingredients/components categories, 2006-11
- Cereal and baking
- Private label cold cereal has little room to maneuver
- An opportunity at the top
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- Figure 19: Edible department FDMx sales and private label share, by select cereal and baking categories, 2006-11
Segment Performance—Dairy (Excluding Milk)
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- Key points
- Spiking commodity prices drive private label dairy sales
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- Figure 20: FDMx sales and forecast of private label dairy (excl. milk), 2006-2016
- Private label gains share in commoditized categories
- Greek invasion puts pressure on private label yogurt sales, for now
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- Figure 21: Dairy department FDMx sales and private label share, by select categories, 2006-11
Segment Performance—Frozen
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- Key points
- Can private label help heat up the freezer case?
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- Figure 22: FDMx sales and forecast of private label frozen products, 2006-16
- Private label plays a role as consumers eat less but better ice cream
- Ice cream as private label proof point
- Private label frozen seafood grows on convenience, economy, and health
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- Figure 23: Frozen department FDMx sales and private label share, by select categories, 2006-11
Segment Performance—Deli
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- Key points
- Inflation drives private label sales in meat categories
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- Figure 24: FDMx sales and forecast of private label deli products, 2006-16
- Varying private label performance across deli department categories
- More specialized concepts in the deli department
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- Figure 25: Deli department FDMx sales and private label share, by select categories, 2006-11
Segment Performance—Bakery
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- Key points
- Solid share but only modest growth for private label bakery products
- Competition from within
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- Figure 26: FDMx sales and forecast of private label bakery products, 2006-16
- Regional bakeries keep private label at bay in bread and rolls
- Private label sweet treats offer comfort to recession-weary shoppers
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- Figure 27: Bakery department FDMx sales and private label share, by select categories, 2006-11
Retail Channels
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- Key points
- Overview
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- Figure 28: FDMx sales of private label food, by retail channel, 2010 and 2011
- Supermarkets
- Private label helps supermarkets fend off competition from all angles
- Recent focus on price/value may point to most significant challenge
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- Figure 29: Sales of private label food at supermarkets, 2006-11
- Figure 30: Sales of all food vs. private label food at supermarkets, 2006-11
- Other FDMx channels
- Private label gains as food sales grow more important
- At Walgreens, a brand with no name
- Store brands part of Target’s efforts to grow food sales
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- Figure 31: Sales of private label food at other FDMx channels, 2006-11
- Figure 32: Sales of all food vs. private label food at other FDMx channels, 2006-11
Retailer Activity and Innovation
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- Overview
- Multitier brand architectures address multiple opportunities
- Safeway’s store brand architecture continues to expand and evolve
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- Figure 33: Safeway store brand architecture, 2011
- Target’s brands support both sides of its “Expect More, Pay Less” brand promise
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- Figure 34: Target, Market Pantry offerings, 2011
- Figure 35: Target, Archer Farms offerings, 2011
- Brand creation and consolidation
- Back to basics: recent launch activity heavy at price/value level
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- Figure 36: Back-to-basics—select retailers’ basic lines, 2011
- Figure 37: Family Dollar, Family Gourmet offerings, 2011
- Health & wellness
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- Figure 38: Fresh & Easy Eatwell line, 2011
- Natural & organic
- Premium & indulgence
- Food Emporium Trading Company seeks out international specialties
- Schnucks launches gourmet store and brand
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- Figure 39: Schnucks gourmet offerings, Culinaria, 2011
- A touch of personality
- Nice!
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- Figure 40: Walgreens’ Nice!, 2011
- “Sunny Smile”
- Delish
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- Figure 41: Duane Reade, Delish, 2011
- The Snack Artist
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- Figure 42: Safeway, The Snack Artist, 2011
- Credibility/authenticity
- H-E-B taps into Texas pride
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- Figure 43: H-E-B leverages Texas, 2011
- Safeway takes ownership with “Farms” and “Kitchens” brands
- Costco’s Kirkland Signature remains a constant symbol of quality and value
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- Figure 44: Costco co-branding, 2011
- Giada de Laurentiis for Target—combining style and credibility
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- Figure 45: Giada de Laurentiis for Target, 2011
- A&P Mid-Atlantic Country Farms
- IKEA moves to private label food
Marketing Strategies
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- Overview: an opportunity to build deeper relationships
- Store brands help H-E-B tap into Texas pride
- Family Dollar makes employees “in-store ambassadors” for store brand
- ShopRite creates online community to support private label food
- Wegmans puts price hold on store brands to highlight EDLP position
- Safeway’s Open Nature launch paves way for ongoing conversation
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- Figure 46: Safeway Open Nature TV ad, 2011
Who’s Buying: Store Brand Demographics
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- Key points
- Older shoppers less likely to opt for store brands
- Store brands appeal to all income levels
- More people in the household means more private label food
- Private label pantry staples have broad appeal
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- Figure 47: Category, store brand and store-brand-only usage in select categories (part I), by household income, April 2010-June 2011
- Figure 48: Category, store brand and store-brand-only usage in select categories (part I), by number of people in household, April 2010-June 2011
- Store brand alternatives to popular name brands appeal to lower incomes
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- Figure 49: Category, store brand and store-brand-only usage in select categories (part II), by household income, April 2010- June 2011
- Figure 50: Category, store brand and store-brand-only usage in select categories, by age, April 2010-June 2011
- Higher-end opportunities to win the loyalty of higher-income consumers
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- Figure 51: Category, store brand and store-brand-only usage in select categories (part III), by household income, April 2010-June 2011
Store Brands’ Share of Weekly Spend on Groceries
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- Key points
- Shoppers perceive heavy private label purchases
- Younger shoppers purchase more private label food
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- Figure 52: Share of spend on store brand groceries, by age, August 2011
- Shoppers at all income levels opt for private label
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- Figure 53: Share of spend on store brand groceries, by household income, August 2011
- Larger households tend to buy more store brand products
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- Figure 54: Share of spend on store brand groceries, by household size, August 2011
Perception of Quality of Store Brands
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- Key points
- Most shoppers put private label on a par with name brands
- Older shoppers more likely to see store brand parity, but less likely to buy
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- Figure 55: Perceptions of store brand quality, by age, August 2011
- Low-income shoppers slightly more likely to appreciate store brand quality
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- Figure 56: Perceptions of store brand quality, by household income, August 2011
Attitudes Toward Store Brands
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- Key points
- Store brand vs. name band: variety of factors can influence choice
- Store brands can shape store image, influence store selection
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- Figure 57: Attitudes to store brands vs. name brands, August 2011
- Younger shoppers look past brand to product attributes, benefits
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- Figure 58: Attitudes to store brands vs. name brands, by age, August 2011
- Income impacts attitudes only modestly
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- Figure 59: Attitudes to store brands vs. name brands, by household income, August 2011
- Figure 60: Attitudes to store brands vs. name brands, by household size, August 2011
Frequency of Shopping at Major Grocery Retailers
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- Walmart/SAM’S CLUB by far most frequently shopped
- The Kroger Company’s retail banners combined come in second
- Costco ranks as third-largest grocery retailer
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- Figure 61: Frequency of shopping at major grocery retailers, August 2011
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- Figure 62: Frequency of shopping at major grocery retailers, by household income, August 2011
Impact of Race and Hispanic Origin
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- Key points
- White shoppers somewhat less likely to buy private label food
- Acculturated Hispanics more likely to purchase private label
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- Figure 63: Share of spend on store brand groceries, by race/Hispanic origin, August 2011
- Store brand quality gets generally good marks across all groups
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- Figure 64: Perceptions of store brand quality, by race/Hispanic origin, August 2011
- Asians slightly more likely to appreciate the quality of name brands
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- Figure 65: Attitudes to store brands vs. name brands, by race/Hispanic origin, August 2011
- Hispanics and Asians less likely to use store brand staples
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- Figure 66: Category, store brand and store-brand-only usage in select categories (part I), by race/Hispanic origin, April 2010-June 2011
- Store brand use low among all groups in categories led by big national brands
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- Figure 67: Category, store brand and store-brand-only usage in select categories (part II), by race/Hispanic origin, April 2010-June 2011
Cluster Analysis
Custom Consumer—Food Lifestyle Segmentation
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- Pantry staples
- Weekend cooks more likely to buy store brand staples
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- Figure 68: Category, store brand and store-brand-only usage in select categories (part I), by food lifestyle, April 2010-June 2011
- Categories led by popular national brands
- Weekend Cooks go for snacks
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- Figure 69: Category, store brand and store-brand-only usage in select categories (part II), by food lifestyle, April 2010-June 2011
- Specialty and cooking-oriented categories
- True Foodies a development opportunity for private label
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- Figure 70: Category, store brand and store-brand-only usage in select categories (part III), by food lifestyle, April 2010-June 2011
Appendix: Additional Edible Subsegment Sales Tables
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- Figure 71: Edible department FDMx sales and private label share, by select sauces categories, 2006-11
- Figure 72: Edible department FDMx sales and private label share, by select meals/prepared foods categories, 2006-11
- Figure 73: Edible department FDMx sales and private label share, by select condiments/spreads/dressings categories, 2006-11
- Figure 74: Edible department FDMx sales and private label share, by select snacks and treats categories, 2006-11
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Appendix: Trade Associations
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