Year after year across the U.S., private label’s growth continues to outpace national brands. According to Private Label Foods & Beverages in the U.S., 8th Edition, a recent report by market research firm Packaged Facts, private label accounted for almost a fifth of the $530 billion total food and beverage market dollar sales in 2013, up about 2 percent from the previous year. Looking ahead, Packaged Facts projects retail dollar sales of private-label foods and beverages will grow by a compound annual growth rate of 4 percent to reach $122 billion in 2018.
Dairy products lead the private-label sector. Led by milk, private-label dairy beverages account for nearly 50 percent of total unit dairy beverage sales. Dairy’s strength in private label is driven in part by the relatively short shelf life of most products in the dairy case, resulting in many regional and local products and more private-label products than national brands. This holds true for private-label dairy food products as well, which is led by cheese, eggs and butter and account for 32 percent of total unit sales.
A growing trend for private label is health and wellness. Many retailers are trying to offer more affordable healthy food options through the introduction of store brands. Natural and organic private-label brands have been around for a number of years led by Safeway’s O Organics, Stop & Shop and Giant’s Nature’s Promise, Food Lion and Hannaford’s Nature’s Place, and Supervalu’s Wild Harvest. These brands continue to expand and update with a focus on healthy product attributes. Other retailers are catching up with the natural and organic trend, launching private-label brands for first time.
Likewise, several leading private-label retailers have evolved natural and organic positions to more modern wellness brands that shift focus from product attributes to lifestyle enhancement. For example, Kroger’s Simple Truth, Target’s Simply Balanced and Aldi’s Simply Nature all attempt to provide consumers with easy solutions for taking care of themselves and their families. The brands cross many food & beverage categories with affordable, nutritious products that are natural or organic, and free of artificial ingredients.
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