Tough Times a Boon for Private Label Products

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Tough Times a Boon for Private Label Products

04/22/2009
CHICAGO -- Difficult economic times have been a boon for private label foods and beverages, but according to leading market research company The NPD Group, private label usage has grown over the last decade. According to a new NPD report called Private Label Perceptions, Usage Patterns, & Intentions, 24 percent of all food and beverages served in American homes last year were store brands, up from 18 percent in 1999. Today, 97 percent of all households consume private label foods on a regular basis.

"There is no question that private label foods have become an integral part of American life," said Harry Balzer, chief industry analyst at NPD and author of Eating Patterns in America. "Furthermore, we do not hide private label foods as an ingredient or as an additive to another dish. Today over half of all store brand food eatings are the end dish."

Price and value are the chief reasons why consumers purchase private label or store brands, according to an NPD survey of grocery shoppers, but most respondents also feel that the quality of store brands is often equal to, or in some cases better than, name brands. Users of private label foods and beverages span all income levels and demographic profiles.

"The bottom line is that private label foods can offer a great value to budget-minded consumers. If a consumer is working with less disposable income, stretching the food dollar and finding value will naturally gain importance," said Dori Hickey, director of product management at NPD and author of the Private Label Perceptions, Usage Patterns, & Intentions report. "Name brand and private label marketers will each need to focus on differentiating their products while finding ways to effectively address consumer needs, as the lines between the two are blurring in the minds of consumers."

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