In the last few days I have received a slew of press releases on exciting research about Private Brands. The below release from IRI gives a peak into their new report on emerging trends and key success factors for Private Brands.
New IRI Private Label Report Uncovers Emerging Trends and Key Success Factors in Challenging Economy
CHICAGO–(BUSINESS WIRE)–Private label share in the United States has risen dramatically across retail channels and product categories during the past two years as consumers continue to struggle with high food prices and other economic pressures. According the latest research from Information Resources, Inc. (IRI), \”The 2009 Private Label Report,\” this trend is expected to continue through 2009 and beyond, representing an unprecedented opportunity for retailers and a threat for branded manufacturers.
\”With budgets strained to the breaking point, shoppers are scrambling for ways to save money,\” says IRI Consulting and Innovation President Thom Blischok. \”Shoppers are looking through a lens of affordability and have a re-invigorated interest in private label since the economic turmoil began. The need for affordable packaged goods solutions is high, and private label products are going a long way toward answering that need.\”
\”Since many private label products are truly becoming mainstream these days, IRI refers to these products as private brands, such as Target\’s Archer Farms, Safeway\’s O Organics and Supervalu\’s Wild Harvest to name a few,\” adds Blischok. \”The retailer halo is now foundational, and private brands are becoming as familiar and relevant as national brands in some categories.\”
The IRI Private Label Report provides a thorough review of private label performance and best practices across channels, categories and retailers as well as current viewpoints from more than 1,500 consumers. The study also takes an in-depth look at the opportunities that exist for retailers and how branded manufacturers can more effectively compete against private label in a tough economy.
The following is just a glimpse of the private label insights found in the report:
- Guidance is provided to retailers on \”where to play\” and \”how to play\” in key growth hot spots for private label. For example, private label\’s strongest growth performance tends to be such categories as cream cheese/spread, paper napkins, refrigerated entrees and shortening and oil to name a few. Developing categories include pet supplies, cold/allergy/sinus tablets, refrigerated salad/coleslaw and salad dressings.
- Drivers behind the highest performing regions and markets was also analyzed and revealed that grocery channel private label share is highest in the West at 25.2 percent and lowest in the Northeast at 19.2 percent for U.S. regions. For individual U.S. markets, Wichita, Kansas had the highest share of private label unit sales at 34.3 percent in 2008, and New York City had the lowest at 14.2 percent.
- Four out of five shoppers are now \”sold\” on private label quality indicating that product marketing during the current recession is successfully expanding the positive reputation and reach of these products.
- Although nearly 80 percent of shoppers in 2008 have positive attitudes towards private label versus 73 percent in 2007, dollar and unit shares are still below 25 percent.
- In personal care categories, branded manufacturers have successfully differentiated themselves in the minds of shoppers, which has made it difficult for retailers to successfully penetrate these categories with private label.
- Consumers\’ perception of private label quality is consistently high across U.S. regions and channels. Some regional variations do exist, which are driven by best-in-class regional retailers.
\”The evolution of the U.S. private label market has accelerated in the face of growing financial turmoil,\” says Sean Seitzinger, senior vice president, IRI Consulting and Innovation. \”As shoppers opt out of some products and stores, they will opt into others. It is critical for the ongoing success of CPG manufacturers and retailers to not only react to, but anticipate these trends and be ready with products, assortments and store layouts that meet the shopper\’s changing needs.\”
IRI Private Label Webinar
IRI is offering a free webinar, entitled \”Key Success Factors in Private Label\” on April 22 at 10 a.m. CDT. To register for the webinar, hosted by consumer trends and private label expert Sean Seitzinger, please visit http://us.infores.com/NewsEvents/EventsWebinars/KeySuccessFactorsinPrivateLabel/tabid/221/Default.aspx.