Jun 22, 20223 min read

By Doug Baker, Vice President, Industry Relations, FMI and Steve Markenson, Director, Research and Insights, FMI

What do you know about shoppers’ views on grocery private brands?

Consumer attitudes have evolved in the last couple of years, and food retailers and manufacturers can no longer rely on long-held assumptions.

That is why FMI’s Private Brands Leadership Council recognized the importance of conducting new consumer research on this topic. The results are showcased in the latest version of FMI’s The Power of Private Brands series subtitled What Makes Private Brands Powerful to Shoppers.

Compelling Questions for 2022 and Beyond

We know consumers have increased their trial of grocery private brands at a time when the industry is accelerating innovation of these items.

As a result, we considered it crucial to learn what shoppers now expect from private brands on aspects including price, quality, health, meal solutions, sustainability and other factors. Do consumers trust private brands as much as manufacturer brands? Will shoppers be buying private brands more in the future?

Just as important is learning about unmet consumer needs. What can retailers and suppliers do to make shoppers even more excited about private brands?

What Shoppers Relay About Purchase Motivators

We asked consumers what is driving their grocery private brand purchases based on a list of some 18 product characteristics.

It turns out the top factors, in order of importance, are taste (78%), quality (64%), trust in the brand (61%), need for the product (61%), and low price/less expensive (59%). Factors lower in priority but still important range from sustainability to nutrition.

Here’s a crucial point about the feedback. We asked consumers the same questions about manufacturer brand purchase drivers. The responses were relatively similar — with the biggest exception being price, which is slightly more of an impetus for purchasing private brands than manufacturer brands.

The upshot of all this is good news for private brands. Shoppers are saying they now have relatively similar priorities on a wide range of factors in buying private brands and manufacturer brands. Compare that to the not-so-distant past, when private brands were mainly seen as manufacturer-brand followers not always able to compete on quality and other attributes. Today private brands are still chosen for price, but also for much more than that as well. The latest FMI research, in fact, found that over 40% of shoppers have been buying more grocery private brands since the start of the pandemic because of their quality.

Consumer Opinions on Unmet Needs

Consumers offered perspectives about what else they want from grocery private brands — information that can be leveraged for future innovation strategies. The FMI report includes many shopper quotes on this topic, and here’s a sampler:

  • “Use more eco-friendly packaging that could easily be recycled.”
  • “More plant-based.”
  • “Have customer rating scores on the labels, like wine does.”
  • “Have more gourmet-type frozen meals.”
Interpreting Findings for Each Organization

The information relayed here just scratches the surface on what the report contains. The research also delves into how shoppers feel private brands are actually performing against name brands on a range of attributes, the impacts of inflation on buying and the influence of private brands on the choice of a primary store.

This is a pivotal time for industry leaders to re-examine shopper motivations to build on recent private brand gains. They can benefit by downloading the report, analyzing the results and interpreting the findings for their own organizations and unique customer bases. Our Power of Private Brands 2022 series will continue with a second report released at the Private Brands Summit, September 29 – 30 in Arlington, VA. Here private brands professionals will learn more about innovation taking place is this sector of the food industry.