Private brands gain $19B from CPGs since 2014

A new study on the consumer goods market said private brands are gaining share on large national brands, saying since 2014, $19 billion in industry sales have shifted from large and mid-size CPGs to store brands.

The finding comes from the eighth annual CPG study from Boston Consulting Group and IRI. The study did note that while private brands have increased share, private label volume has dropped 1.5% to mid-size and larger national CPGs since 2018. 

The report hardly showed a slowdown in overall CPG success, too. Comparing sales data of more than 430 CPG brands with more than $100 million in 2019 sales, the study found that the CPG industry was up 2.2% in sales in 2019, up slightly from a 2% growth the year before.

"Over the past five years, a mix of acquisitions and portfolio shaping has driven growth among both large and small CPG companies," said BCG managing director and partner Aman Gupta. "Acquisitions made by Tyson in the past five years account for 85% of its 2019 growth and 53% of its overall portfolio. While CPG companies are using a variety of tools to sustain growth, interest in acquisition seems to be on the rise even among smaller players."

The leading national brands in the report were Constellation Brands, Johnson & Johnson, Tyson, General Foods and Procter & Gamble.

The study pinpointed six category types where CPGs are seeing success, and areas where private brands could impede: multifunctional beverages, protein-on-the-go products, premium self-care items, better-for-you snacks, simple and transparent ingredients in products and products focused on the Hispanic market.

Drivers of CPG growth in the last year could be pointed to acquisitions and innovation, pricing changes, a bigger focus on e-commerce and introducing products that satisfy those six trends above, the report said.