Manzoline: Good things are happening with store brands
The past two years have been quite a ride for the private label industry. A good ride.
According to the Private Label Manufacturers Association (PLMA), store brands have never been more popular among consumers. Nearly one of every four products sold in the U.S. today is a retailer’s own brand.
In 2018, sales of private label grew by 4.4%, four times as much as national brands, representing a gain of $5.5 billion, according to the PLMA. Store brands’ market penetration set records, advancing to 18.5% in dollar share and 22.3% in unit share.
A few weeks ago, Information Resources Inc. (IRI) reported that consumers across ages and demographics are buying more private label goods, and have shifted their attitudes and behaviors around purchasing such products. IRI said private label sales are up nearly 4% in 2019.
During her address Monday morning at the Opening Breakfast for the PLMA’s Private Label Trade Show in Rosemont, Ill., this week, Lisa Manzoline, the PLMA’s chairperson of the board, talked about that ride and the fact that it’s not coming to an end anytime soon for those involved in private branded consumer packaged goods in food, non-food, and health and wellness products.
“Whether you’re competing in the business in grocery, drug chain, mass merchandising channels or online, the rapid and accelerating pace of change has become the new normal,” said Manzoline, director of sales for Lake Forest, Ill.-based Reynolds Consumer Products, a supplier of household products.
Consumer expectations for private brands have perhaps never been higher. They want quality products at a value, and those buying online want them delivered to their homes faster. And while “the unrelenting pace of change of presents unprecedented opportunities,” Manzoline said, it presents obvious challenges. Retailers and suppliers need to keep up in all facets.
Manzoline believes they will. She cited the theme of this year’s Private Label Trade Show — “Store Brands Make Things Happen” — and noted that store brands, indeed, are making things happen.
“In category after category across all departments, store brands continue to post impressive gains even in the midst of uncertainties about the labor market, trade tariffs, the stock market and geopolitical concerns,” Manzoline said. “Store brands are going to continue to rise to the challenge by offering newer and more innovative and higher-quality items that will drive increased private brands sales and share.”
Because store brands are focusing more on innovation, and retailers and suppliers are creating more premium and niche items to their assortments, Manzoline believes the industry’s better days are ahead of it.
“The future is even brighter than the present,” she added.
But Manzoline noted that product differentiation has never been more important.
“Private brands must stand on their own,” she said.
Beyond innovative and differentiated products, it’s crucial that retailers not only excel in their e-commerce programs but make their store brands a vital part of them, Manzoline noted.
“It has now become imperative for retail brands to be managed as other brands are,” she added.
In the end, it’s about retailers and suppliers collaborating together to be successful, which Manzoline added is the “key to making great things happen.”