NORTHBROOK, IL – During a year when value pricing was a dominant concern of consumers, private label brands made significant gains in several categories, with frozen pizza and baby food leading the way, Brandweek reports.
Overall, unit sales of private-label goods increased 5.3 percent for the year ending October 3, compared to a 2.3 percent decrease in branded packaged goods during the same time period. Unit sales of private label baby foods grew 22.3 percent, the biggest private label category gain, while frozen pizza grew 20.4 percent.
While private label brands grew at an annual rate of 4.5 percent over the past eight years, the recession triggered the recent growth spurt, according to Lynn Domblaser, director of CPG trend insight at Mintel. That indicates that consumers are "rediscovering or discovering private label that has been on the market that they've never noticed before," Domblaser said.
As a result of the private-label growth, CPG companies have responded with aggressive marketing that emphasizes value, familiarity and the longtime appeal of their brands. Kraft said that its strategy is working and claims that its Kool-Aid and Macaroni & Cheese brands have fended off private-label competition. "Overall, we view private label as we do any other competitor," said Kraft spokesperson Joyce Hodel, adding that "recently, we have seen private label growth trends slowing."
The Hartman Group said that private label growth is far from over, with 43 percent of Americans having tried private-label products in the past year with plans to continue purchasing them.
Categories where private label made the biggest gains (percent gain over last year):
- Baby Food: 22.3%
- Frozen Pizza/Snacks: 20.4%
- Salad Dressings: 18.0%
- Candles: 16.8%
- Snacks: 15.9%
- Canned Seafood: 15.3%
- Detergents: 14.2%
- Fresh Produce: 14.2%
- Cheese; 14.1%
- Meat: 13.0%