The US private-label food market has expanded by almost 60% since 2003, compared with just 23% growth for overall US retail food and drink industry, and is giving branded food companies cause for concern, according to a report from business information provider Just Food.
As a result of this growth, private label now accounts for more than 19% of market value, up from less than 15% in 2003. In volume terms, private label has increased its share of the overall market to 24%, up from around 20% in 2003.
The report, “The US Private Label Food Market – Forecasts to 2013,” reveals that private-label food products are continuing to gain favor in the US, primarily because of the economic recession, increased food price inflation, and a wider selection and availability of private-label foods, writes Retailer Daily.
In addition, private label is increasingly significant to the business of most US food retailers, with almost 80% having increased the amount of private label products offered between 2006 and 2008. Supporting this expansion is a figure indicating that more than 70% of US shoppers feel that private labels are as good as, if not better than, branded products.
These results echo other recent research findings. “Store Brands and the Recession,” an ongoing study conducted by the Private Label Manufacturers Association (PLMA) and GfK Custom Research North America, indicates that 90% of respondents sa6y private-label products are just as good as, or better than, national brand products. The poll also found that 35% of respondents are trying store brand products in categories where they had previously only purchased national brand items, and slightly more than 30% said they are now buying more store brand products than they were a year ago.
A 2008 report on private label food and beverage trends in US? households by NPD Group found that 24% of all food and beverages served in US homes were store brands, up from 18% in 1999. Additionally, 97% of all US. households consumed private label foods and beverages on a regular basis last year.
MediaBuyerPlanner also reported that CPG company Procter & Gamble reported a 5% dip in global sales volume for its Q309 (ended March 30, 2009), and analysts predict earnings per share may drop 5% in Q1 2010 (starting July 1, 2009), with private label goods the most likely beneficiary.
Retailer Daily reports that numerous retailers are expanding or introducing new lines of private label merchandise this year, some in partnership with manufacturers or celebrities. Some of the bigger names include Wal-Mart, Target, Best Buy, 7-Eleven, Sears, and JCPenney.