Consumer Confidence In Private Label Continues To Grow
Consumer perception of retail private label products continues to evolve as a growing number of shoppers view store brand items in a positive light, according to the 2024 Power of Private Brands report from FMI—The Food Industry Association.
In the annual report, survey respondents focused on several keywords including “good,” “great,” “quality,” “better,” “brand” and “value” to describe their view on private label products now on the market. Additionally, 55% of respondents said they have increased their buy of private label products over the past year, compared to 28% of consumers who said they purchased more national brand products during the prior 12 months.
"Our research suggests that private brands are no longer just about offering a cost-effective alternative; they are about delivering quality, creating new experiences, and highlighting unique values that resonate deeply with today's consumers," said Steve Markenson, vice president of Research & Insights for FMI. “In turn, retailers have recognized their portfolio serves as a strategic differentiator and an extension of their brand narrative to shoppers.”
While price has long been the top motivating factor for consumers when choosing to buy a retail brand over a national brand, retailers across all channels have discussed the need to develop new store brand products that are something other than national brand equivalents. The goal for many is to develop unique products that serve as a point of differentiation from their competitors.
"Private brand owners have the opportunity to further elevate their perception by increasing investments in marketing and treating the portfolio as an asset to support print and digital strategies."
— Doug Baker, FMI
Motivating factors such as less expensive/sale (71%) and good value (72%) remain the top reasons consumers say they purchase private label items. However, other reasons such as quality (42% in 2024 vs. 30% in 2023) and taste (33% in 2024 vs. 26% in 2023) played a larger role for shoppers when choosing private label products.
Private brands are also having a greater influence on where consumers shop. In the FMI survey, 53% of respondents said a store's private brands influenced their store choice, up from 35% in 2016. Also, 55% of respondents said a grocery store’s primary store brand is “very” or “extremely important” in shopping at that given store.
"Private brand owners have the opportunity to further elevate their perception by increasing investments in marketing and treating the portfolio as an asset to support print and digital strategies,” said Doug Baker, vice president of Industry Relations at FMI.
Consumers also indicated a stickiness with store brand products they purchased more recently. In the survey, 51% said they were “very likely” to continue purchasing store brand products should the price of groceries decrease, up from 42% in 2023. Only 7% said they either were “not very likely” or “not likely at all” to continue buying private label products if grocery prices decrease.
Consumers also cited an average of eight categories in which they will purchase more store brand products in the year ahead. The top eight are paper products, refrigerated dairy foods, frozen foods, packaged breads, milk or non-dairy substitutes, salty snacks, baking/cooking items, and (tie) condiments and packaged/canned foods.
The FMI report is based on an exclusive survey and was administered online to a nationally representative sample of 1,539 U.S. grocery shoppers 18 years of age or older. The survey was conducted between March 7 and 15, 2024. The research carries a maximum sampling error of +/-2.5 percentage points at the 95% confidence level.
