Milk Stands Out in Private-Label Sales

Fluid milk is a small but top-10 category for c-store retailers.

November 19, 2021

Private Label Milk

ALEXANDRIA, Va.—Private-label food and drink grew 14% in 2020, from $142.3 billion in 2019 to $158.8 billion, according to a report by Chicago-based Mintel. During the pandemic, many consumers who were looking to save some money turned to private-label goods, but as the pandemic wanes and shoppers return to normal habits, private-label sales may decrease, but a “well-aligned” brand that meets consumers’ needs and priorities could keep private-label top of mind, reports Beverage Industry.

Private-label milks, including plant-based milks, stand out in the private-label space. In total U.S. multi-outlets for the 52 weeks ended Oct. 3, private-label milk was at a 49.3% market share and had dollar sales of $7.3 billion, a little less than half of the $15.3 billion for national ($7.9 million) and private-label brands.

At 1.2% of in-store sales, fluid milk (including major brands and private label) represented “a small but still top 10 category in terms of percentage of store sales,” said Jayme Gough, NACS research manager, in a recent Category Close-Up article. The category offers “decent margins at 30.91% and faster inventory turnover than any other category,” she continued. While fluid milk isn’t a category often promoted by c-stores, “customers expect it to be able to find it in store,” Gough said, providing retailers the opportunity to capitalize on planned shopping visits. Nearly 97% of all c-stores stock fluid milk, according to the NACS State of the Industry Report of 2020 Data.

According to 7-Eleven, about eight out of every 10 Americans buy private-brand products to save money. Millennials have a particular affinity for the value and quality that the brands offer, the chain said, and are contributing to the growing popularity of retailer brands.

The opportunity for improved profits is a big motivator for retailers considering private-label products. “In some cases, margins could be 25% versus 18% for a national brand,” said Roy Strasburger, president of StrasGlobal, in a recent NACS Magazine article on private labels. Marketing and promotional control over the brands is another benefit, allowing c-stores to become destinations for products not available anywhere else. “If done successfully, it’s not the store pushing the product, but the product pushing the store,” Strasburger told NACS Magazine.