With consumers facing high costs in the grocery aisles, TreeHouse Foods President and CEO Steve Oakland said consumer demand for private label products continues to grow and he expects interest in store brands to stay strong for the foreseeable future.
During TreeHouse’s 2022 second quarter earnings call, he noted that demand from shoppers for store branded products in categories sold by his company, which include snacking and beverages, has accelerated for 22 straight weeks.
“This increase demonstrates that the value proposition (of private label products) resonates with consumers,” he said.
Oakland pointed to a June survey conducted by TreeHouse of more than 1,000 shoppers that revealed a growing loyalty to private label products. More than half of survey respondents (52%) said they switched to a store branded product within the previous six months. Of those that switched, 72% said they were satisfied with the new store brand product and 91% said they were likely to continue buying private label products in the coming six months.
“The survey results give me confidence that we have turned the corner in terms of consumer behavior,” he said. “History would tell you that in periods of economic downturn, share increases. Today, private label is positioned significantly better than in past periods of economic downturn.”
His positive outlook also stems from changes in the overall selling environment during the past decade.
“The retail landscape has changed dramatically,” Oakland said. “There are far more outlets focused on private label, which are being driven by discount retailers. And there are more retailers today that are more committed than ever to their private label strategies and are making meaningful investments to support their store brands.”
He made his comments following the release of TreeHouse’s second quarter results. As previously reported by Store Brands, net sales increased 19.4% to $1.2 billion when compared to the second quarter of 2021. Net loss from continuing operations was $(30.6) million, an increase when compared to the comparable quarter the previous year when the company reported a net loss of $(5.2) million.