Can private-label brands move passed fast-follower status to be market leaders in 2024?

“It’s cheaper to buy a private-label item than it is to buy a national item, and when [consumers are] economically challenged, they do everything they can to search for the value… The opportunity for private label is to overcome that statement that people are buying it because they have to. You should be focusing on activities that will make that statement people are buying it because they want to.”

Private-label brand adapts to market trends, retailers focus on brand loyalty

Private-label brands saw an upswing in adoption because of the pandemic, and now, consumers have turned to private-label products to offset higher food prices, Maute said. In a survey of more than 1,000 US shoppers, FMI found that 96% of consumers​ buy store brands occasionally, and 46% said they buy private brands more or all the time.

Over time, private label’s value proposition evolved from being a generic offering to being on par with name brands on quality, as they’ve become fast followers in the market, Maute said. Now, “traditional grocers and … regional grocers are starting to rethink how [private] brands can play a role in building loyalty” because “higher private label penetration in [a] marketplace equals greater store loyalty,” he added.  

“Private label started out as a value brand, generics, inferior product quality to meet a great price point. Then, when that started to grow, they became national brand knockoffs to try to change the value and quality perception. Then they said, ‘Well, I don’t want to be the knockoff anymore because that’s going to minimize my ability to scale and grow, so let me try to become an independent brand,’ and all these companies are starting to launch brands. A lot of these factors are predicated on, in my opinion, the retailer’s equity in the marketplace.”