FMI: Grocers Aim to Communicate Value Beyond Price Across the Store

Private label products continue to be a prominent way for shoppers to save money on grocery and home essentials. According to FMI - The Food Industry Association’s recent The Power of Private Brands 2023: Innovation that Drives Winning Private Brands report, eight in 10 retailers will increase investments moderately or significantly over the next two years.

Last week, Doug Baker, vice president of Industry Relations with FMI, joined Store Brands Executive Editor Greg Sleter to discuss the report in greater detail, highlighting how retailers can further meet consumer needs with private brands.

“In our interviews [with retailers and suppliers], we found while new products are always an important part of innovation, the effort and need to go well-beyond new product introductions is extremely important,” said Baker. “That’s including focusing on branding, purchasing, logistics, inventory management, and marketing and more.”

Baker said that as consumers seek out value, retailers are beginning to communicate product attributes beyond price that make a private label product worth purchasing. According to the report, grocers are doing this by incentivizing repeat purchases with expanded loyalty programs, using labels to provide transparency and talk about value beyond cost savings, digital programs, sustainability and more.

“The use of digital tools like SmartLabel and others is extremely important in order to be able to give the customer what they’re looking for,” said Baker. “Sustainable packaging is important, but then how do you tell the customer that you’re using it? How do you get the benefit from that? So it’s making sure you’re able to relay the story about that new package, the producers and the way you’re using it.”

Outside of consumables, Baker said that nonfood private label items are continuing to see success, calling the umbrella category a “significant opportunity” for retailers to expand into.

“That’s also an area where sometimes consumers are quick to move,” he said. “So how can you improve your nonfood program and create that loyalty in that same category to keep them coming back. The impulse purchase is much larger than just sunglasses at the front end. It’s about creating an experience around food that can also offering those creative experiences for the shopper. I enjoy going into a grocery store and getting into the department that isn’t just food because you need those as well and they also create the experience for you in the home.”

The full webinar can be viewed on-demand here.