Growth Leaders Defy Odds

Anyone questioning the resolve of retailers to push boundaries with store brand options needs to look no further than the latest Nielsen's top-15 growth categories list. Collectively, the newcomers to the list show a category diversity that bodes well for retailers committed to execution of category management fundamentals and open to taking the occasional calculated risk.

For the 52 weeks ending Dec. 24, 2011, beer, deodorant and coffee were the top-three store brand growth categories in terms of percentage dollar sales change versus one year ago, posting 62 percent, 51 percent and 28 percent gains, respectively. The percentage unit sales change leader (for the same time period) was beer as well, with an eye-popping 117 percent growth rate. Deodorant (46 percent) and fresheners/deodorizers (26 percent) rounded out the top-three unit sales gainers, posting impressive, albeit more earthbound numbers.

Possibly most exciting is the makeup of the top performers on these lists. These largely are categories in which the national brands invest heavily in marketing and innovation, and often are tough areas for store brands. Equally noteworthy is the number of non-edible categories on both lists. Today, you'll find two kinds of store brand program managers: those engaged in taking on these tougher categories and those just thinking about it. Wherever you are in the process, make sure these "dos and don'ts" are part of your management or expansion game plan:

1. Don't let price gaps get too large and drive declining category sales.
2. Don't de-list high-penetration, high-frequency or strong niche brands and drive shoppers to retailers that carry them.
3. Do promote store brands with brands where limited shopper overlap exists to drive category sales.
4. Do promote store brands along with noncompetitive or complementary branded offerings to build larger baskets.
5. Do select credible suppliers and hold them to high standards.
6. Do leverage consumer analytics to get the most out of your store brand investments.

As good as growth numbers are, no one is suggesting Goliath has been slain. Store brand market share still is low in many categories, so what might be incremental increases for a brand often are amplified for a store brand.

But this reality doesn't diminish the fact that retailers are achieving solid gains. My hope for 2012 is that these successes embolden others to explore uncharted areas. For those with discipline and daring, gains are to be made.

Straight Talk delivers monthly store brand insights from Nielsen, New York. Todd Hale is Nielsen's senior vice president, consumer & shopper insights.