Economic Concerns Fuel Interest in Private Labels

Whether the U.S. is technically in a recession or not is being debated. Nonetheless, consumers feel the pinch of rising prices, especially at grocery stores. 

Federal data reveals Americans are paying 10% more for food at grocery stores than a year ago—mostly linked to escalating costs. Supply chain issues have not disappeared, and costs of goods continue to rise.

Shoppers are weighing the advantages of shifting to private label options—especially since there is high perceived value in house brands. 

According to IRI data, store brands gained 11.6% in dollar sales in July of 2022. National brands, in comparison, only posted gains of 5.5%. Looking at three-month trends, store brands jumped 11.4% in June and 9.8% in May for an average of 10.9%. Year-to-date, private brands produced gains of 9.1%, versus national brand growth of 5.5%.

Price is what drives shoppers to private brands at first, but many stay for the quality. According to the Food Marketing Institute, 41% of shoppers surveyed in the spring of 2022 said they now buy more store brands that even before the pandemic. 

When supply issues hit over the past two years, customers tried out store brands when their national product was not in stock. Many of them are sticking with the store brand. 

Among those who said they bought more store brands, 77% responded they plan to continue to purchase those brands. Several major retailers also list private brands as among their fastest-growing products. Pet has always been a strong contender in store brands, especially if shoppers trust the retailer and buy their products in other categories. 

Packaging is crucial for store brand pet food store to stand out on shelves against heavily supported national brands. Store brands need to stay current on consumer packaging preferences such as flat-bottom packages. 

Learn more about successful pet food packaging read here.