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01/20/2022

IRI, PLMA discuss the state of private label

At PLMA's Lunch & Learn event, Mary Ellen Lynch discussed IRI's recent in-depth study on how private brands performed in 2021.
Zachary Russell
Associate Editor
Zachary Russell profile picture

To discuss the findings of IRI’s recent Consumer Demand for Private Brands study, the Private Label Manufacturers Association (PLMA) hosted a Lunch & Learn online event on Thursday featuring Mary Ellen Lynch of IRI’s Center of Store Solutions Group.

IRI, the Chicago-based data research company, released the study in December of last year, detailing the state of private label including category growth, what motivates store brand and national brand loyalists and much more. Despite losing some market share in 2021 compared to 2019, overall sales rose in that period, and IRI previously predicted that private label brands could see gains in 2022 if inflation continues.

“There’s been a major shift to home consumption and we don’t see that letting up any time soon,” said Lynch, citing the share of store brands in the total grocery sales shrinking from 17.5% to 17.3%. “Year-over-year we’ve seen growth and that includes for private label. Heading into the pandemic, store brands were growing slightly year-over-year. During the [at-home] surge, they maintained that share, but coming out of it and in more recent weeks, we are seeing softening in the food and beverage private label shares.”

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IRI data

Lynch added that consumers who returned to more at-home consumption opted for legacy name brands instead of private label. Despite the shift, IRI’s data shows that store brands continue to hold their own in terms of total sales, even with increasing prices. Consumers driving own brand sales tend to be seniors, who spend one in five grocery dollars on own brands. 

IRI reported that store brand loyalists, meaning households where private label is greater than 27% of total dollar spend, tend to be suburban, White, own a home and have kids. 72% of private brand loyalists say they search for the lowest price while shopping, with nearly 60% stating that they have a budget while shopping. Lynch added that unique store brand products can be a trip driver, with Trader Joe’s, Aldi and Lidl being frontrunners in own brand exclusive offerings.

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IRI Data

“To recap, private brands encompasses a lot of brands, so look beyond the average when thinking about strategy,” said Lynch. “The store brands that are being supported by their retailers as if they are brands are successful. It all comes down to specific strategy and mission for your banner. Price is important, but value is even more important, so it has to be the right product at the right price. It has to do what it says it’s gonna do… be creative in getting the shopper’s attention.”

The full report from IRI can be found here.