Yesterday, Chicago, Illinois based research and trend firm Symphony IRI released the “Times & Trends: Private Label – Brand Positioning in the New World Order” report. The report has been widely covered in the trade press with most publications, declaring the end of the Private Brand growth era. You can judge for yourself, dollar share increased from 18.3% in 2010 to 18.5% in 2011 and unit share decreased .7% from 23.3% in 2010 to 22.9% in 2011 hardly a groundbreaking change.
I have included the introduction as well as link to download download the full report.
Times and Trends reports that CPG private label sales dipped in 2011
This isn’t your grandmother’s private label. In fact, that today’s private label products meet consumers’ need for lower-cost alternatives to brand name CPG products is just about the only thing that 21st Century private label CPG has left in common with private label of the past.
Private label products are viewed as differentiators. They are no longer simply “me too” products that offer “the same thing for less money.” More and more, they bring something new to the market.
Private label products are strategic weapons. Increasingly, they are tools that separate a retailer from its competitors, hopefully in a way that helps to build loyalty and purchase behavior.
And, in addition to bringing something unique to a retailer, they offer better margins, thereby supporting bottom line growth—a critical role to be played in an industry that has forever been marked by thin margins and today is feeling margins seemingly choked out of existence.
For consumers, private label offers money-saving opportunities. As discussed later in this report, private label products cost an average 29% less versus national brand alternatives.
Much opportunity remains for private label marketers and national brand marketers alike. But, success will be achieved by those who are thinking outside the box.
To bring private label to the next level, private label marketers must explore opportunities to expand private label, to make it reach broader and deeper into the CPG marketplace, and to reinforce the equity of the store banner.
Meanwhile, national brand marketers must continue to identify and capitalize on opportunities to raise their own value proposition—to bring shoppers new and better benefits, to simplify lives and to alleviate financial strain.
For marketers of national and private label brands, all of these efforts must center on the shopper. Those that effectively identify and deliver against critical shopper needs will win share of wallet and shopper loyalty.
This report explores current and emerging trends around private label, as well as national brand efforts to protect and grow their position in the CPG marketplace. Private label also offers value. New products, new attributes, new sizes… private label products are opening doors to attributes which have historically been out of the reach of many consumers by bringing them into an affordable price range.
And still, private label can be—should be— even more. Correctly orchestrated, private label architecture can give retailers significant leverage with suppliers. It can help them attain sizable discounts for scale, which can be passed along to the consumer and/or used to strengthen profit margin.
It can also help to increase customer loyalty. In partnership with key national brand manufacturers, for instance, retailers can design multi-tiered programs across key departments and/or categories to ensure that assortment remains in lock- step with the needs of key shopper across multiple consumer segments. They can support those programs with joint promotional and/or merchandising campaigns that underscore value as a “return on investment” operation.
And it can help retailers to develop product assortments to address niche-market needs—once again building and broadening customer loyalty.
Private label accounts for nearly 23% of CPG dollar sales across retail channels today. This is an increase of almost one point versus 2008 share, but a slight decline versus share in 2010.
SymphonyIRI has closely monitored private label trends during the past several years, documenting inroads made across channels, departments and categories as consumers embraced private label as a means of reining in CPG spending.