Private Label Products Continue to Penetrate Marketplace

CHICAGO -- Private label products are no longer cheaper versions of brand-name products, according to the latest SymphonyIRI Group Times & Trends Report. Titled "Private Label: Brand Positioning in the New World Order," the report explores trends around private label, as well as national brand efforts to protect and grow their positions in the consumer packaged goods (CPG) marketplace.

Nearly everyone now buys private label products with no stigma attached, according to the report. Private label products bring something new to the market and are no longer simply "me too" products.

The report noted that huge opportunities remain for private label marketers and national brands alike. However, outside-of-the-box thinking is required to be successful.

"At nearly 23 percent of CPG unit sales across retail channels today, private label products certainly have momentum and command a sizable share of consumers' CPG spending," said John McIndoe, senior vice president, marketing, SymphonyIRI. "However, this momentum is not demonstrated equally across channels, retailers, departments or categories. This means there is room for private label and national brand manufacturers to capitalize on opportunities. The key for both camps is to center their efforts on the shopper. Those that effectively identify and deliver against critical shopper needs will win share of wallet and shopper loyalty." According to the report, private label share is largest within the grocery channel. However, its private label share of sales slid 0.6 points during the past year.

The decline was even more dramatic in the drug channel, where private label share of vitamins and internal analgesics fell by 3.2 and 4.4 points, respectively. Bath soaps and blades suffered a 5-point decline.

As for future opportunities, the most sizeable private label share increase came in the refrigerated salad/coleslaw category, which increased more than 20 points during the past three years. Private label gastrointestinal tablets, cold/allergy/sinus tablets, internal analgesics and pastry/doughnuts have also been doing well and have room to grow, according to the report.