The growth of discount retailing in the last few years has been a key facilitator of ingredient growth in private label products. The discounters have expanded their store networks and shoppers are increasingly exposed to more private label options. In addition, the strength of private label products in discount stores coupled with their price, has helped improve the perception of this category for shoppers.
By Keshia Walvin, Senior Retail Analyst at IGD
To compete, mainstream retailers are increasingly improving their private label offers, allowing them to close the pricing gap and respond quickly to trends in individual markets. In turn, brands are struggling to maintain loyalty with shoppers.
IGD identifies five trends driving growth in the global private label category.
Product innovation driven by private label
Shopper behaviors are constantly evolving, and retailers are reacting by remodeling stores and developing new product ranges. This can be seen in several focus areas within the private label category:
- Healthy living – producing more organic and natural products
- Premium products designed to appeal to foodies
- Having an active lifestyle – products rich in fiber or protein, free-from
By being innovative and responding quickly to these consumer trends, retailers can attract a wider range of shoppers. Unique private label ranges help retailers to differentiate themselves from the competition and provide a compelling reason for shoppers to visit.
Some good examples of this include Carrefour in Spain, introducing a range of edible, insect-based food including pasta, snacks and energy bars. This range reinforces its sustainability and healthy living credentials by using organic ingredients. Albertsons in the USA has introduced an ultra-premium brand – Signature Reserve, which focuses on quality ingredients and flavors.
