Premium products driving store brand growth
Sales of store brand consumer packaged goods (CPG) have increased to $143 billion over the last year (May 25, 2018, through May 25, 2019), a figure that’s up nearly $14 billion since 2015, according to a recent report from market researcher Nielsen.
While name brand CPG products have increased 2% in sales, that growth has been constrained by flat consumer spending, which has leveled off relative to store brands, Nielsen stated.
Premium store brands are spurring overall growth. Premium private label products now represent more than 19% of store brand sales, according to Nielsen.
“The rise of higher-end store brand products has come hand-in-hand with consumers’ inclination to spend more on store brands,” Nielsen reported. “Discount products still represent the majority of store brand sales in America, but they have ceded three share points in the last three years. Forty-percent of surveyed Americans said they would pay the same or more for the right store branded product, while only 26% of those surveyed feel that name brands are worth the extra price.”
Retailers that offer more premium private private brands are seeing more sales, Nielsen noted.
“With a premium facelift on many private label products, we’ve seen an interesting impact on discount grocery stores,” Nielsen said. “U.S. value grocery outlets, including the likes of ALDI and Lidl, have collectively seen a 4% decline in private label share of wallet. Meanwhile, stores with premium products, such as premier fresh grocery stores like Whole Foods, Sprouts and Fresh Market, have continued to see lifts in private label sales.”
Click here for Nielsen’s report.