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Private-Label Packaged Goods Growing

SCHAUMBURG, Ill. -- Sales of private-label consumer packaged goods (CPG) are growing much faster than branded products, according to the U.S. Trends in Private Label report by ACNielsen U.S., an operating unit of ACNielsen, a sister company of Convenience Store News. While branded products still constitute the majority of all CPG sales, private-label products are enjoying faster sales growth and expanding into an increasing number of categories, becoming the share leader in more categories, and gaining an increased presence in more retail channels.

Since 1997, private-label products have grown from having a presence in 69 percent of the categories tracked by ACNielsen to 75 percent, entering 88 new categories in that time. In 2002, private label had the dollar volume share lead in 25 percent of the categories in which it competed -- up from 21 percent in 1997.

Private label's initial success came from commodity-type products, such as milk, bread, cheese and eggs. More recently, private label has begun to make inroads into categories traditionally dominated by branded products, such as cosmetics and baby food. However, Gail Zielinski, ACNielsen Homescan account director and author of ACNielsen's annual U.S. private-label study, says the vast majority of private label's overall growth is coming from expanded sales in established categories.

"Private-label manufacturers are driving sales growth by focusing on categories that have been traditional strongholds for store brands," Zielinski said. "They're introducing different package sizes and types, new flavors, and adding new, higher-priced premium private label products. In addition, several retailers are increasing their focus on providing in-store samples of their products and using other promotions to boost sales."

The grocery channel owns the largest share of total private-label consumer packaged goods sales. However, its lead is decreasing as other retail channels add private-label products to their shelves. The dollar store, warehouse club store and supercenter channels are generating the strongest growth in private-label sales, albeit off of sales bases that are still relatively small.
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