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06/30/2021

IRI data: National, store brands increase prices, premiumization of products

The June report finds national brands lead in accelerating prices in edible and nonedible categories by nearly a full percentage point over store brands and more in nonedibles.
Dan Ochwat
Executive Editor
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The latest data from IRI shows large national brands are leading in accelerating prices in both edible and nonedible categories but store brands aren’t too far behind in food and beverages. Medium and small-sized national brands aren’t increasing prices to the same degree, but the analysts say they will likely follow due to universal rising costs.

IRI’s findings are featured in its “2021 Trends and Emerging Growth Pockets” report for June 2021, reporting a nearly 2% change in price growth for large manufacturers (those with $6 billion in sales or more) in edibles and up 1.4% in nonedibles. By comparison, store brands are up 1% in edibles and up half a percentage point in nonedibles. Medium-sized national brands are practically even in pricing in edibles and up 1.3% in nonedibles. Small brands (those with less than $100 million in sales) are .9% in edibles and nonedibles.

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From IRI's June report: 2021 Trends and Emerging Growth Pockets

IRI said the numbers show an opportunity for retailers to balance shelf price increases across channels and brand tiers by ensuring adequate opening price points and value products, while driving sales of premium products.

The report said that the premiumization of store brands is continuing, too, as IRI’s seeing an increase in products in a premium price tier vs. a value tier. In fact, there’s been a more than 15% increase in premium price tier edible products pre-COVID 2020 and into the second quarter of 2021 compared with a year ago. For nonedible products, the rise in premium price tier products is up more than 19% for the same periods vs. a year ago.

The share of premium products is growing at the expense of the value end products, according to the report.

The report said consumers continue to buy premium products at the same time that shelf price increases are taking into effect. IRI said it expects an increasing trade-off vs. product value as prices creep up, adding that store brands, which lagged or decelerated vs. national brands in the first half of 2021, are likely to gain share in the second half as national brands raise prices.

The full report and others from throughout the year are available at IRI’s website.