Consumers in the U.S., reacting to the long-tailed economic downturn, helped private label brands advance to a 17.3% share of dollars and a 21.9% share of units by March 2010, according to recent research from Nielsen. Although branded products hold their own, that's up 2.1 and 1.9 percentage points respectively from 2007.
Store brand share varied widely from grocery aisle to grocery aisle, from a high of 40.4% in the dairy aisles department to a low of 0.9% for alcoholic beverages. According to Nielsen senior vice president for Consumer & Shopper Insights, this accurately reflects the typical pattern of store brand strength in several commodity categories like milk, eggs and sugar, as well as those with little “consumer-perceived” differentiation such as first aid or wrapping materials.
Conversely, the Nielsen study showed that in those categories with a limited showing for strong brand marketing support like beer and candy, or those with a high demonstrated level of innovation such as deodorants and detergents, store brand share remains relatively weak and undeveloped-a potential opportunity for retailers and flexible packaging suppliers alike.
While private label products were once associated with low-income families or households with many mouths to feed, the Nielsen research shows that's no longer the case. In fact, typical private label buyers today:
- Make between $30,000 and $70,000 in annual household income,
- Reside in rural and outer suburban areas,
- Have larger households with three or more members,
- Include a younger female head of household, and
- Fastest-growing segment is Families making $100,000 or more a year represent the fastest-growing segment in private label purchases.
Private label gains strength in weak economy
May 4, 2010