Private brand opportunities in food

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Private brand opportunities in food

By Collette Perozzi, ADM - 10/05/2020

Rising economic concerns as a result of COVID-19 are prompting shifts in consumer shopping behavior — shifts that provide growth opportunities for private labels.

According to ADM OutsideVoice research, value-based shopping is experiencing a resurgence. This includes growing demand for basic pantry staples, increased traffic to value retailers and trade-offs to private labels. The research shows that 41% of consumers say they will continue to buy “more” or “much more” private label products post-COVID-19.

This comes on the heels of favorable pre-pandemic perceptions that elevated the status of private labels to more closely compete with brand names. OutsideVoice research found that 75% of consumers said private labels have improved their quality in recent years, while 73% felt private labels provided better value for money, and 63% felt private label products are as good as brand name products.

Private label product developers can expect to see continued growth in the coming months and years if they strike the right balance of value and quality. One way to seize this opportunity is by differentiating private label goods with added health and wellness benefits.

The pandemic has only heightened consumer interest in proactively supporting aspects of wellness like mental health and immune function. ADM OutsideVoice research found that 77% of consumers will make attempts to stay healthy in the future and 30% are willing to pay more for products with ingredients that target health and wellness.

Here are three ways product developers can give private label products an edge: 

Pre-, Pro- and Postbiotics
The pandemic has elevated consumer awareness of the microbiome and its impact on health and wellness. This provides fertile ground for food and beverage innovation with prebiotics, probiotics and postbiotics. Postbiotics are non-viable microbes or their metabolites that may have similar benefits to probiotics but can be used in a wider array of food and beverage applications.

One opportunity is an element like ADM's HT-BPL1, one of the first commercially available postbiotics. It targets healthy weight management and is uniquely tolerant to high-heat applications and other harsh processing conditions. With HT-BPL1, the comfort foods consumers seek, like baked goods and snacks, can provide functional health and wellness benefits, giving them permissible indulgences.

There are many microbiome solutions to choose from depending on the application, but research shows consumers cite efficacy as a product feature influencing their willingness to pay a premium price.    

Dietary Fiber
The wide-ranging benefits of dietary fiber are well established, yet most Americans don't get enough in their diets. Long known to be important for weight management and heart and metabolic health, prebiotic fiber is also important to promoting a healthy microbiome. And, according to ADM OutsideVoice research, fiber is the ingredient consumers are most interested in adding to their diets.

 A soluble fiber ingredient also makes it easy to increase prebiotic fiber in a variety of applications, from baked goods to beverages and more, without sacrificing taste, aroma or texture. Because only minimal formulation adjustments are required, these are ideal solutions to accelerate product development. 

Functional Botanicals
Chamomile, known for its calming effect, and green tea, recognized for its positive support of heart health and weight management, are examples of on-trend functional botanicals. Tropical fruit extracts that are sources of vitamin C are also gaining in popularity for their role in supporting immune function. Regardless of the health and wellness benefit, the addition of botanicals can lend an overall wellness halo to private label products, because they are perceived as naturally derived.

The increase of value-driven purchases and consumers' interest in supporting their health and wellness through positive changes to their diets holds great potential for private labels. Whether that means reformulating an existing product or introducing new products, differentiating private labels by increasing their value is key to future success.

Collette Perozzi oversees private label marketing at ADM. She has a Master’s degree in Food Science from the University of Illinois and 20+ years of experience in sensory, consumer insights and marketing, working at Mars/Wrigley, Kellogg’s, Slim Fast Foods, PepsiCo, Givaudan and InsightsNow (consumer research consultancy).

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