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Private Label Food and Drink Trends - US - January 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Consumer engagement with private label in a holding pattern
Figure 1: Store brand purchase trend, November 2018
Improved economy could signify a peak for private label, for now
Figure 2: Total US sales and fan chart forecast of private label food and drink, at current prices, 2013-23
Disposable income rise could spell trouble ahead
Figure 3: Consumer Sentiment Index, January 2007-November 2018
Figure 4: Disposable personal income change from previous period, Jan 2017-Oct 2018
Consumers not trying new private label products
Figure 5: Priorities for food shopping, November 2018
The opportunities
Emphasizing, increasing awareness of store brand improvements
Figure 6: Reasons for increased purchase of store brand food/drinks, November 2018
Expanding appeal among fresh-oriented categories
Figure 7: Categories where store brands are preferred, November 2018
Potential in craft-style beer and premium alcohol
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Private label sales may have reached peak for now
Steady sales for drink, as food sales dip
Improved economic outlook presents distinct challenges
MARKET SIZE AND FORECAST
Private label sales to decline
Figure 8: Total US sales and fan chart forecast of private label food and drink, at current prices, 2013-23
Figure 9: Total US sales and forecast of private label food and drink, at current prices, 2013-23
MARKET BREAKDOWN
Avoidance of processed foods impacting private label sales overall
Figure 10: Total US multi-outlet retail sales and forecast of private label food and drink, by segment, at current prices, 2013-23
Non-supermarket store brand efforts pay off
Figure 11: Total US multi-outlet sales of private label food and drink, by channel, at current prices, 2013-18
MARKET PERSPECTIVE
Private label market share increases
Figure 12: US multi-outlet total and private label food and drink sales, and private label share, at current prices, 2013-18
Figure 13: US multi-outlet total and private label food sales, and private label share of total, at current prices, 2013-18
Figure 14: US multi-outlet total and private label drink sales, and private label share of total, at current prices, 2013-18
MARKET FACTORS 
Rising disposable income likely to shade private label sales
Figure 15: Consumer Sentiment Index, January 2007-November 2018
Figure 16: Disposable personal income change from previous period, Jan. 2007-Oct. 2018
Shrinking household size likely to impact store brand sales longer term
Figure 17: Households with own children under age 18, 1960-2017
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Private label successes in fresh, more-commoditized options
Private label's missed opportunities in healthier alternatives
Premium options, particularly in alcohol, could resonate
WHAT’S WORKING?
Private label successes revolve around fresh
Figure 18: Health attributes sought, May 2018
WHAT’S STRUGGLING?
Natural selection – or lack thereof
Figure 19: Private label food/drink launches with natural, environmentally friendly, organic claims, 2013-18
WHAT’S NEXT?
Premium, craft, store brand alcoholic beverages
Figure 20: Private label alcoholic beverage launches, 2018
THE CONSUMER – WHAT YOU NEED TO KNOW 
Nearly universal penetration, but opportunity to grow store brand share of basket
Price and quality prove key motivators
Store brand potential for natural, convenience, online retailers
Store brands' appeal in baked goods, produce
Leveraging fresh in store brand dairy, meats
National brands dominate in processed foods
Improved packaging, more natural options likely appeal
PURCHASE TRENDS 
Store brand purchase almost universal
Figure 21: Store brand purchase trend, November 2018
Younger, less-affluent are strong targets
Figure 22: Store brand purchase trend, by consumer demographics, November 2018
Majority of Hispanic Millennials buying more store brand food/drinks
Figure 23: Store brand purchase trend, by Hispanic origin, November 2018
REASONS FOR INCREASING PURCHASE OF STORE BRANDS 
Quality, budget lead reasons for increased store brand usage
Figure 24: Reasons for increased purchase of store brand food/drinks, November 2018
Quality improvements resonating with older consumers
Figure 25: Reasons for increased purchase of store brand food/drinks, by age, November 2018
REASONS FOR BUYING LESS OR NO STORE BRAND FOOD/DRINKS 
Taste, trust lead reasons behind name brand loyalty
Figure 26: Reasons for less or no store brand purchase, November 2018
STORE BRAND PURCHASE LOCATION 
Store brand loyalists sticking with supermarkets, mass merchandisers
Figure 27: Store brand purchase locations, November 2018
Multiple-store shoppers more likely to be expanding store brand usage
Figure 28: Store brand purchase trend, by repertoire of food/drink purchase location, November 2018
Figure 29: Store brand purchase location, by store brand purchase trend – buying more, November 2018
BFY innovation could resonate with private label loyalists
Figure 30: Priorities for food shopping, by repertoire of food/drink purchase location, November 2018
STORE BRAND OPPORTUNITY BY CATEGORY 
Store brand loyalists most likely turn to supermarkets, mass merchandisers
Figure 31: Store brand preferences, by purchase location, November 2018
Potential in categories where freshness resonates
Figure 32: Categories where store brands are preferred, November 2018
CATEGORIES WHERE NEITHER STORE NOR NAME BRANDS RESONATE STRONGLY
Taking fresh to new levels
Figure 33: Brand preference by category, November 2018
NAME BRANDS STRONGLY PREFERRED IN CERTAIN CATEGORIES 
Processed foods see name brands dominate
Figure 34: Categories where name brands are preferred, November 2018
PRIORITIES FOR FOOD SHOPPING
Quality, price improvements of interest
Figure 35: Priorities for food shopping, November 2018
Quality, price, organic could expand a product’s appeal
Figure 36: TURF analysis – Priorities for food shopping, November 2018
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations
Abbreviations
APPENDIX – THE MARKET 
Figure 37: Total US sales and forecast of market, at inflation-adjusted prices, 2013-23
Figure 38: Total US multi-outlet retail sales and forecast of private label food and drink, by segment, at current prices, 2013-23
Figure 39: Total US multi-outlet retail sales and forecast of private label food and drink, by segment, at current prices, 2016 and 2018
Figure 40: Total US multi-outlet retail sales and forecast of private label food, at current prices, 2013-23
Figure 41: Total US multi-outlet retail sales and forecast of private label food, at inflation-adjusted prices, 2013-23
Figure 42: Total US multi-outlet retail sales and forecast of private label drink, at current prices, 2013-23
Figure 43: Total US multi-outlet retail sales and forecast of private label drink, at inflation-adjusted prices, 2013-23
Figure 44: Total US multi-outlet sales of private label food and drink, by channel, at current prices, 2016 and 2018
Figure 45: US supermarket sales of private label food and drink, at current prices, 2013-18
Figure 46: US sales of private label food and drink through other multi-outlet channels, at current prices, 2013-18
METHODOLOGY - TURF ANALYSIS
Figure 47: Table – TURF analysis – Priorities for food shopping, November 2018

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