Private Brand Food Trends for 2011

This interesting report on the trends from the PLMA Trade show comes courtesy of tock market opinion and analysis website Seeking Alpha and Rick Shea of Shea Marketing.

Private Label Food Trends for 2011

Private label leaders returned from the recent PLMA conference in Chicago with lots of information to digest and new ideas on how to drive growth in 2011. PLMA regularly holds a conference in Chicago in November in which suppliers and retailers get together to show their wares and discuss new ideas and products. Attendance was up +15%, according to a PLMA spokesperson, despite a year that was average at best for private label growth.

After growing strongly in 2008 and 2009, sales of private label foods are flat in 2010 as brands counterattacked and increased trade and consumer promotion. Despite this, private label leaders are optimistic that private label brands will return to gaining share. The leading private label companies Treehouse and Ralcorp were well represented, as were many of the key supermarket retailers like Target, Kroger, Super Valu and Safeway.

Several key trends appear to be emerging or continuing based on our conversations with private label retail and manufacturing leaders:

  • Products continue becoming more upscale both in price and quality. While much of the current sales are in the “extreme value” or mid tier (brand competitive segments), much of the interest in new products was aimed at creating premium quality private labels that are differentiated from brands. Think of a return to “natural” and / or “organic”, along with higher quality products aimed at more affluent consumers.
  • Upscale and differentiated packaging was also discussed with many vendors. This also fits with the more upscale private label products as retailers need the packaging to convey the better quality. Gone are basic metal cans while upscale plastic containers are more on trend.
  • Continued rise of pricing to offset commodity price increases. Most private label vendors, especially those with exposure to grains, need to push through price increases to maintain margins.
  • Expansion of SKUs into somewhat related product categories. Treehouse’s Sturm division has announced new single serve coffee packages will be available in Walmart. These items are a direct attack on Green Mountains (Keurig) successful k-cup franchise. Were also hearing about new private label products in categories that before now did not have a strong or any presence.

All in all, expect private label products to continue their assault on branded items. We expect the focus to cater to the improving economy and attempts to gain traction with mid and higher income consumers.

Rick Shea is President of Shea Marketing Inc a firm that specializes in marketing and strategy services for consumer product companies. Mr Shea has 20 years of marketing experience as a VP of Marketing for large CPG companies (Kraft, Unilever, Entenmanns, Malt-O-Meal) Mr. Shea partners with his dad who is former President of Campbell Soup and CEO of Pepperidge Farm. At Shea Marketing they provide their expertise on all aspects of the supermarket industry to leading consumer products companies and financial investment firms. They can be contacted through www.sheamarketinginc.com or through Gerson Lehrman Group www.glgroup.com for individual consultations, speaking engagements or longer term strategy or marketing development projects.



Facebooktwittergoogle_plusredditpinterestlinkedinmail
Previous articleTESCO Redesigns HBC Essentials
Next articleBuilding Private Brand Success: Three Distinct Views
Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.