Packaged Facts Releases 'Private Label Foods & Beverages In The US, 8th Edition'

Retail sales of foods and beverages have been challenged by a frugal consumer who is struggling with the lingering effects of recession, a continuing sluggish economy, and higher food prices. These factors have affected overall spending on both national and private label brand groceries in the U.S.

Total U.S. retail sales of the overall private label food and beverage market were $102 billion in 2013, up about 2% over 2012. Unit sales were virtually flat, with average unit prices higher during the year. The total food and beverage market grew at 1.4% to reach $530 billion in 2013, with unit sales also flat. Food, with sales estimated at $80 billion compared to $22 million for beverages, accounts for nearly 80% of overall private label dollar and unit sales. Overall private label penetration of the total market was about 20% in dollars and units in 2013.

Private label growth has slowed from the last several years when consumers flocked to private label brands during the recession and its aftermath. Consumers sought out lower prices and greater value, and retailers responded with numerous introductions of their own brands. In many cases, retailers raised the quality of product and packaging to equal national brands, and leading retailers launched different private label brands to create portfolios offering consumers good, better, best and specialty product options. The most successful retailers have heavily marketed and promoted their private label brands as equal or superior alternatives to national brands. In some cases, even mass-market retail brands like Costco’s Kirkland and Wegmans private label have achieved (if not edged out) the status of a national brand in consumer’s minds, thus providing the retailer with competitive advantage. Whole Foods’ 365 brand and Trader Joe’s private label gain additional prestige from being based in the natural foods channel. Trader Joe’s and its sibling company Aldi are two of the most aggressive and successful private label marketers that have, much like Costco, extremely loyal customers. Private label products, accounting for more than 80% of products sold in their stores, help cement that loyalty.

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