CHICAGO – The latest IRI Times & Trends report, “Private Label: The Journey To Growth Along Roads Less Traveled,” takes a closer look at how CPG retailers and manufacturers can strike the right balance between national and private label brands, and provide shoppers with the value and quality they desire.
“Relying on distribution to drive consistent growth is no longer feasible, and we’re seeing this in recent growth and share changes,” said Susan Viamari, vice president of Thought Leadership for IRI. “Private label is entering the next phase of its evolution, and there is significant opportunity for retailers if they invest the time and resources needed to raise their private label game.”
This past year, the grocery, club and convenience channels maintained solid footing and even slight growth in private-label share, supported by careful expansion of product assortment across food and beverage and non-food ranges, according to IRI. However, private label lost ground in the dollar channel due to strong pricing headwinds. And the drug channel struggled to maintain private-label unit share, losing ground across private label edibles, including candy, bottled water and cookies.
IRI notes that retailers and private-label manufacturers are looking for opportunities to build momentum, with some progress being made in private-label performance of packaged beverages that deliver benefits such as nutritional enhancement, workout recovery and energy enhancement, and in emerging private-label categories such as liquid drink enhancers, bottled water and coffee.
“This type of forward-looking thinking and shopper-centric focus is essential to reinvigorating struggling private-label sectors and activating new growth levers,” Viamari added.
The IRI study notes that striking the right balance between private label and name brands is the key to successfully providing a solid value proposition and a positive shopping experience for consumers. National brands drive traffic and variety, and manufacturers continue to excite consumers with innovative new products that are backed up by essential marketing programs. On the other hand, private-label brands are critical to a retailer’s value image, supporting margin and profitability. And when used effectively, private-label products offer exclusivity and drive increased customer loyalty.
“It is such an important time in the evolution of private-label brands, so this new research is the first installment in private-label analyses that IRI will be providing throughout 2017,” Viamari added. “The initial step is for retailers to understand that they have an opportunity to shine, better serve their customers and strengthen customer loyalty. Establishing organic and sustainable private label growth requires some nitty-gritty planning and solid execution. But, the rewards of getting private label right will be sweet.”