Select Page

Favorable economic conditions aren’t blunting consumers’ appetite for private label products. In fact, 83% of adults surveyed by IRI [pdf] in Q3 2018 reported buying private label products to save money, while 73% said they try new, lower-priced brands to save money. Both figures remain basically unchanged from the year-earlier period.

Private label shopping appears to be more prevalent among younger than older shoppers. Fully 92% of Millennials surveyed buy private label products to save money, as do 86% of Gen Xers. And more than 8 in 10 Millennials (82%) and Gen Xers (84%) try new, lower-priced brands in order to save money. That compares with 77% of Seniors who buy private label and 57% who try lower-priced brands to save money.

This is likely a reflection of younger adults’ more strained financial situations. Roughly 4 in 10 Millennials (38%) and Gen Xers (42%) surveyed for the report say that they have difficulty affording groceries, a rate double that of Seniors (19%).

But youth also show an above-average likelihood to perceive real value and quality in these solutions. For example, three-quarters (75%) of Millennials – compared to 69% of adults overall – feel that private label products are just as good in quality as national brands. Additionally, 73% of Millennials – versus 68% of adults overall – agree that private label products are a better value than national brands.

As such, 63% of the youngest cohort claim to often buy private label solution instead of name brands. For this group, private labels can also dictate shopping destinations: 7 in 10 prefer stores that have a large variety of private labels from which to choose, and 55% choose to shop at certain stores as a result of their private label offerings.

Previous research from IRI has also shown that Millennials tend to be the most price-sensitive generation when CPG shopping.

Meanwhile, the most important private label solutions to adults are food and beverage solutions, followed by home care products, health care products, and personal care products, per the latest IRI study.

Millennials Dedicate Almost One-Fifth of Their CPG Spend to Private Label Products

Each generation is devoting a greater proportion of its CPG dollar spend and unit purchases to private label solutions this year than last, according to the report.

Not surprisingly, young people spend the most on private label solutions: the study indicates that younger Millennials devote 19.3% of their CPG spend to private label, and 23.1% of their unit purchases. Older Millennials likewise allocate 18.3% of their spend and 22.5% of their unit purchases to private label.

By comparison, Boomers are the least reliant on private label solutions, apportioning 16.5% of their dollars to these products.

Interestingly, while lower-income respondents are the most likely of the income brackets to say they buy private label to save money, there is some consistency across income segments in private label spending. The $15-25k and $25-35k income segments spend the most of their CPG budgets on private label, at 18.2% and 18.3%, respectively, but the $100k+ bracket – which spends the smallest share – still allocates 15.7% of its CPG budget to private label products.

These figures align with research from Nielsen, which has found that store products account for one-fifth of FMCG sales.

This is unlikely to change in the near future: a majority of the IRI survey respondents intend to purchase more private label products in the coming 6 months.

About the Data: The results are based on a survey of more than 2,000 adults (18+). Millennials are those born in 1990 and later.

Feel Like You're Always Playing Catchup?

Stay ahead of the curve with our free newsletter. It’s fast. It’s factual. And it’s clear

marketing charts logo

Error: Please enter a valid email address

Error: Invalid email

Error: Please enter your first name

Error: Please enter your last name

Error: Please enter a username

Error: Please enter a password

Error: Please confirm your password

Error: Password and password confirmation do not match