Expo West 2023: Sustainability Helps Grow Private Brands

NIQ data shows that not only is sustainability important for consumers, but that private label products that make sustainability claims are growing faster than branded items.
Zachary Russell
Associate Editor
Zachary Russell profile picture
Expo West 2023

Leaning into sustainability is a winning formula for private brands with the topic being front-of-mind for consumers, according to experts who spoke at Natural Products Expo West 2023.

Sherry Frey, VP of Total Wellness at NIQ, formerly NeilsenIQ, and Steve Noble, senior partner at McKinsey & Company, both detailed the “The Evolving Business Case for Sustainability” at the recent event held in Anaheim, Calif.

Noble said that sustainability is important for consumers and is translating to the products that they purchase. According to NIQ data, 69% of consumers say that sustainability has become more important to them over the last two years, and only one-in-four consumers believe companies are not making it easy for them to support ESG initiatives.

“Over the course of five years, there was a meaningful difference on average,” said Noble. “The products that did not have any of these [sustainability] claims grew 4.7% per year. Products that did have these claims grew at almost 6.5%. Doesn’t mean that it happens for every product or category, but on average, really significant growth that we saw.”

Of the products that made sustainability claims, ranging from ethically farmed or harvested, organic, non-GMO and more, private brands were among the most popular, showing the intersection between consumers wanting high-value products and making a difference with their purchases.

private label ketchup

“The brands that performed the best, sustainable attributes vs. not, were private labels,” said Noble. “Over 80% of private label products performed better with a sustainability claim vs. not. The smaller brands performed better, and the mid-size brands performed least well compared to their non-sustainable peers. It’s not just about value, it’s about the consumer defining value beyond price. It’s what they’re getting for the product, and sustainability does make a difference.”

Looking forward, Frey said that retailers and brands across the spectrum are becoming more on-board with sustainability, adding that this will mean more claims on more products in the future. With inflation remaining high, private brands have the opportunity to build loyalty among consumers with sustainable products following a record-setting year for private label in 2022.

“As these claims become more mainstream in your category, that opportunity declines, but what we recommend more is paying attention to the loyalty that these claims are making from a consumer perspective," she said. “There’s a higher level of repeat [purchasing] for products that make those ESG claims."