Advertising Age has a story saying that while the recession has been given much of the credit for the growth of private brands, a study by NPD Group suggests that the expanding acceptance of own-label products in fact precedes the current economic downturn.
The study says that:
• Private brands are equally accepted by households across all demographic groups.
• Own label accounts for 30 percent of all the food (not including beverages) consumed in the US.
• And that 97 percent of US households buy private brands at least occasionally.
However, the study also notes that private brands only account for about 20 percent of dollar sales, which is seen as a confirmation of their discount positioning.
The study says that:
• Private brands are equally accepted by households across all demographic groups.
• Own label accounts for 30 percent of all the food (not including beverages) consumed in the US.
• And that 97 percent of US households buy private brands at least occasionally.
However, the study also notes that private brands only account for about 20 percent of dollar sales, which is seen as a confirmation of their discount positioning.
- KC's View:
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Ad Age correctly points out that this trend could have a significant impact on lower tier national brands, which simply may not be able to survive a heightened competition between top-tier national brands and house brands that are gaining in strength.
As I’ve pointed out here before, this trend does not surprise me since I do a vast majority of my brick-and-mortar grocery shopping at three stores – Stew Leonard’s, Trader Joe’s and Costco – that feature robust, high quality private brands. Create excellent products and market them with a little panache, and there is no reason that shoppers cannot be converted.
