“Expansion in 2023 will heavily rely on a retailer or brand’s ability to focus on bolstering the key areas impacting development,” he said. “This includes establishing a unique and ownable lens to innovation, boosting sustainability measures across the board, planting both feet into omnichannel investments and securing the supply chain through partnerships.”
Consumer Shopping Habits
The past three years have also seen the habits of consumers shift at an uncommonly rapid rate in the face of significant factors that include the COVID-19 pandemic and inflation. But which of these habits will carry into 2023 and which will diminish?
Connors said that while consumers will remain focused on price, they will also look at what they are buying through the lens of value and assess both when making purchase decisions.
“Consumers today are much savvier and have adopted new habits in an effort to maximize their budgets,” she explained.
She also said shoppers overall will remain focused on buying products that have a positive impact on their health. Noting that this topic has evolved beyond calories and the fat content of consumables, Connors said the topic of health also includes identifying products that allow them to improve immunity levels and get a better night’s sleep, for example.
Lynch added that financial concerns will remain top-of-mind for consumers who spent much of 2022 zeroed-in on managing their household budgets in an effort to make ends meet.
“They bought less, reduced waste, chased promotions and were very intentional in choosing what to purchase, with many turning to store brand products,” she said. “I expect that to continue in the near term in 2023.”
Similar to Connors’ view about consumers seeking the best value for their dollars, PLMA’s Davies said based on conversations with private label suppliers, she expects to see more value packs on store shelves. This would not only give consumers more options when shopping for needed products, but allow retailers in the grocery channel and others to compete with the big-box stores.
Sustainability will again be a big part of the conversation, Daymon’s Griffin said, with consumers continuing to show an interest in the link between the environment, climate change, personal well-being and buying behavior.
“With a keen eye to how their individual purchasing decisions impact the world around them, more and more consumers are expecting companies to elevate their sustainability efforts,” he added. “Private brands need to be considering multifaceted goals and commitments, including product development innovation initiatives that take into account these consumer concerns and category dynamics.”
This, Griffin said, encompasses everything from acting on topics such as adjusting packaging (i.e. minimizing packaging and extending its lifecycle) to tasks that may require higher investments such as incorporating renewable energy and regenerative agriculture throughout the total supply chain.
Products to Watch
Despite the many changes to doing business seen over the past three years, a constant has been the continued need to develop new products. With retailers looking to build on the growth of private label product sales from 2022, the remainder of the year is expected to see a great deal of innovation, industry experts said.
“Innovating products around consumer trends will always be a key component of driving product development and loyalty,” Griffin said. “Now more than ever, shoppers are looking for ways to
drive satisfaction in everyday life, with products that bring simple joys and excitement through familiar items while balancing the value equation.”
An area of growth Griffin expects to see in private label is innovation with dynamic flavor pairings such as sweet and spicy global flavor profiles like gochujang. Across nonfoods, he noted the introduction of products that promote shareability across social media platforms by leveraging unique and new applications of colors, scents and formats such as within personal care products.