Is premium private label an oxymoron

Private label food products are providing more than just cheap alternatives to national brands, attracting shoppers with premium ingredients, portability, and health benefits, reports Mintel GNDP.

So far in 2009, Mintel GNPD has seen nearly 1,800 new U.S. private label foods appear on retail store shelves, accounting for 27 percent of all food products introduced this year, compared to 13 percent in 2005.

As most Americans try to spend less at restaurants, Mintel sees private label retailers creating premium in-home meals that boast restaurant quality and fresh ingredients. Supervalu's Culinary Circle features an upscale Pork Carnitas Enchilada Casserole, while Wal-Mart claims fresh-baked taste in minutes with Sam's Choice Thin Crust Pepperoni and Canadian Bacon Pizza.

Portable, high-quality lunches are another popular area of private label development, People want to save money by lunching at the office, and new private label foods like Safeway's Rice Noodle Soup Bowl (retailing for just $1.55) make desk-dining easy.

Convenience remains a driver for private label prepared foods, but health and nutrition are increasingly influencing product development. Lucerne Foods gives shoppers convenience, nutrition, and private label pricing with its Eating Right brand. Products span the store, including kids' Whole Wheat Mini Ravioli with fiber and protein, plant sterol-fortified Apple Cinnamon Granola, and Light Ice Cream Cups containing probiotics.

Private label in the U.S. grew 9.3 percent in 2008 (compared to 4.5 percent for branded food sales), and Mintel forecasts it will grow another 8.1 percent by the end of 2009.

"Not only have private label introductions increased, but product innovation is reaching unprecedented highs," says Krista Faron, senior analyst at Mintel. "Retailers no longer only launch 'me-too' products to compete against major national brands. Instead, private label lines are hotbeds of creativity, driving markets and establishing themselves as trend leaders."