Private Label’s Evolution
Growth and maturation.
Those two words, at least to this writer, best describe the current state of the private label industry as we close out 2024 and head to the new year.
Following several years of significant expansion, the private label segment enjoyed another banner year in 2024, and more growth is expected in 2025. It has been fascinating to watch how the sales growth store brand products have seen is tied to an industry that is maturing.
I’ve been fortunate to cover aspects of private label throughout my career and have also leaned on industry professionals who have shared their experience and expertise with me. Also, reporting on a robust list of new private brand products over the past 12 months has shown me the differences in how retailers of all shapes and sizes are bringing their new items to market.
One notable change is the mindset of retailers when they talk about their product development efforts. Offering products that are national brand equivalents is a diminishing benchmark for many. Retailers want their products to be better than national brands in quality while also providing shoppers with a better value. The words “cheaper” and “less expensive” are disappearing from the vernacular of many, and packaging designs are immensely better than in previous years, which makes the items more attractive on shelf.
The other buzz word that is evolving from a trend to the way business is done and products are developed is differentiation. With each unveiling of a new private brand assortment, retailers talk about the need to offer consumers products that not only meet or exceed national brands, but also offer something unique that allows them to separate themselves from CPGs and retail competitors up the street.
For example, in food and beverage, we’ve seen more retailers develop snacks and drinks that are more than only a salty or sugary treat. Many have added attribute-based products that are sugar-free, gluten-free, and offer solutions for those in need of a protein boost during the day. These types of products allow private label goods to stand out on crowded store shelves and web pages.
We’re looking forward to seeing continued ingenuity from an industry that has grown and matured in recent years. Retailers’ efforts to keep getting better and bring creative offerings will provide consumers with an improved product selection and money-saving options.
