These Segments Are Soaring

Consumer trends, product development initiatives and a number of other factors influence store brands’ ups and downs during any given year-to-year period. Some private brand categories lose some steam, while others make impressive gains.

Each year, Store Brands takes a look at the latter segments — those categories and subcategories in which store brands posted dollar and unit sales gains of 5 percent or more and accounted for $5 million or more in total sales. Making our 2015 list, based on data from Chicago-based market research firm Information Resources Inc. (IRI) for the 52 weeks ending May 17, are 76 food and beverage categories (compared to 73 in 2014) and 65 non-food categories (compared to 46 in 2014). See the tables, beginning below.

Single-serve soars

Rising to the top of this year’s Food and Beverage Movers and Shakers list are aseptic juices. Store brand dollar sales here rose 137.5 percent to reach $13.2 million, while unit sales rose 119.4 percent.

Many aseptic juices come in a single-serve format — and single-serve items certainly are trending on the 2015 Movers and Shakers list. For example, dollar sales of private brand single-cup coffee rose 56.7 percent to reach $385.5 million, while unit sales here climbed 50.1 percent.

“The single-serve coffee sector has been strong for several years now, spurred by single-cup brews and economy-driven trends around home-based enjoyments,” notes Susan Viamari, vice president of thought leadership for IRI, noting that IRI’s MarketPulse data show that 39 percent of consumers are buying treats such as coffee for at-home enjoyment more often now than before the economic downturn began.

Store brand refrigerated ready-to-drink coffee, much of which comes in a single-serve format, also achieved strong gains, with dollar sales rising 32.4 percent to reach $6.1 million, and unit sales growing by 25.0 percent. Store brand refrigerated teas, too, posted strong growth, with dollar sales increasing 23.4 percent to reach $126.3 million, and unit sales climbing 27.2 percent.

The growth in single-serve offerings also is tied to trends toward convenience and snacking, says Jim Hertel, managing partner with the Barrington, Ill.-based Willard Bishop retail consultancy.

Indeed, store brands saw strong growth in a number of convenient snack-minded categories — most of which cross single-serve territory as well. Ready-to-eat popcorn/caramel corn (+23.2 percent in dollar sales and +9.3 percent in unit sales), refrigerated appetizers/snack rolls (+22.9 percent and +17.6 percent), frozen breaded vegetables (+22.8 percent and +19.4 percent), chocolate-covered salted snacks (+17.8 percent and +8.4 percent), frozen pretzels (+13.9 percent and +5.3 percent), frozen appetizers/snack rolls (+13.1 percent and +11.6 percent) and breakfast/cereal/snack bars (+10.3 percent and +12.3 percent) are among the strong gainers here.

And the snacking trend goes hand in hand with the trend toward on-the-go eating.

“Twenty-one percent of Americans eat on the run, grabbing something to eat or drink as the opportunity arises — nutritional snacks/trail mixes, snack nuts, single-cup coffee, convenience water, etc.,” Viamari states, citing IRI’s recent Consumer Snacking Study.

Speaking of on-the-go eating, 24 percent of surveyed consumers say that claims centered on protein will make them more likely to purchase a product or brand, she says, citing IRI’s 2015 Brand & Retailer Loyalty Survey.

“Portable satiation ties together these two trends: refrigerated handheld non-breakfast entrées, etc.”

Health and wellness push continues

Store brands in a number of food and beverage categories also are reaping positives from the consumer trend toward health and wellness. Viamari points to refrigerated teas (+23.4 percent and +27.2 percent) and refrigerated almond milk (+91.2 percent and +90.4 percent) as two categories that are “benefiting from consumers’ focus on healthier eating and a growing assortment/broader availability.” Frozen/refrigerated turkey/turkey substitutes (+23.4 percent and +22.7 percent) also can attribute strong growth to the health and wellness push, at least in part.

“Poultry prices were up rather sharply in 2012 and 2013,” Viamari adds. “Inflation here has moderated, but this will take time to ripple through the system. Prices are encouraging consumers to try lower-priced options — private brands.”

Some of the other health- and wellness-minded categories that posted strong growth on the store brand side include specialty nut butters (+39.4 percent and +26.9 percent), frozen squash/zucchini (+30.7 percent and +14.6 percent), dried cranberries (+24.2 percent and +15.4 percent), nutritional/intrinsic health value bars (+11.3 percent and +11.8 percent), frozen fruit (+10.2 percent and +5.6 percent), nutritional snacks/trail mixes (+8.9 percent and +5.7 percent) and fresh-cut salad (+8.7 percent and +6.5 percent).

Non-foods take off

Boasting 19 more store brand categories than what appeared on the 2014 list, the 2015 Non-Food Movers and Shakers list reflects at least two trends also seen on the food and beverage side, Hertel says: health and convenience. He points to water filters (+71.9 percent and +59.6 percent) and anti-smoking tablets (+36.5 percent and +38.1 percent) as examples of two categories that mesh with the health trend.

“Smoking cessation is a huge trend,” Viamari notes in conjunction with anti-smoking tablets’ gains

She also points to the 2010 Patient Protection and Affordable Care Act, which has an increased focus on prevention and encourages consumers to take a more holistic approach to health, as a growth influencer for store brands in some health-minded categories. Some of these categories are personal thermometers (+24.9 percent and +16.5 percent), Epsom salts (+25.3 percent and +12.1 percent), cough syrup (+14.1 percent and +7.0 percent), dental accessories/tools (+13.4 | percent and +13.3 percent) and foot care devices (+8.8 percent and +7.0 percent).

On the convenience side, Hertel points to such items as “other” home testing kits (+77.3 percent and +97.9 percent) and laundry detergent packets/bars (+52.4 percent and +49.7 percent).

“I’d also believe that new items propelled many of these growth categories,” he adds.

Also worth noting is that air care currently is the strongest area of the home care sector, Viamari says. Its strength is reflected in the growth of store brand potpourri/sachets (+19.7 percent and +15.8 percent).

Maintain the momentum

To keep this year’s Movers and Shakers in growth mode — and grow the list for 2016 — retailers will “need to focus on meaningful innovation that is aligned” with the single-serve/snacking, convenience and health and wellness trends, Hertel says, “while maintaining or even enhancing their value proposition.”

Viamari agrees that the value proposition is critical.

“Marketers of store brands really need to stay focused on providing affordability and value,” she stresses. “They can increase penetration with highly targeted products and marketing programs. In addition to targeted innovation, store brands need to think outside the box, pursuing ideas that appeal to up-and-coming market segments and/or change the product’s/brand’s competitive set.”