Jun 17, 2024

By: Tom Cosgrove, Director, Industry Relations, FMI

Power of Private Brands 2024

There’s no denying that the food industry’s recent private brands story has been positive.

FMI’s newly released Power of Private Brands 2024: What's Ahead for Shoppers and Private Brands report identifies upbeat shopper perceptions and buying behaviors, based on a national consumer survey.

I’m especially interested in figuring out how to keep the positive momentum going in this highly competitive retail environment. There are also opportunities to add even more power to private brands. Below is a summary of the good news from the latest research and then turn to ideas for building on the success. I encourage you to download the report for more details.

Highlighting the Good News

Here’s a quick run-down of the positive findings:

  • Shoppers offer increasingly positive perspectives about private brands and openness to more product trial.
  • Fifty-five percent of shoppers responding to the FMI survey have been purchasing more private brands over the past year — compared to only 28% purchasing more name brands.
  • Value and price are the top reasons consumers have been buying more private brands —with quality and taste increasing as key drivers.
  • Shoppers relay highly upbeat expectations about future private brand purchases.
  • More than half of shoppers say store brands are very or extremely important in their decisions on where to shop.
Strategies to Build on the Success

One of the most powerful aspects of private brands is the strong connection to shoppers’ choice of stores. This underscores how these brands drive competitive retail advantage – and that not having them can lead to competitive disadvantage. Private brands enable retail differentiation. Food retail leaderships need to take this into account in planning investments in their private brand programs.

Opportunities to Enhance Consumer Perceptions

While private brands are perceived as far ahead of name brands in providing lower price and better value, name brands have a bit of a shopper perception edge over private brands in certain other aspects, the research found. These include trust, variety/novelty, quality, healthier/better-for-me, and providing detailed information. Private brands have opportunities to further advance how they are perceived by making investments in marketing to raise their profiles.

Specific Areas for Improvement

Shoppers are increasingly engaged with private brands and relay their likes and dislikes. Food retailers that examine both the positives and negatives will be in better positions to adapt and keep the momentum going.

Shoppers outline how primary stores can further enhance private brands in aspects including health and well-being, packaging, sustainability, taste, variety, merchandising and marketing.

Here are just a few of the shopper improvement suggestions relayed in the report:

  • “More environmentally friendly packaging.”
  • “Have more variety in flavors.”
  • “Put them closer to entrance.”
  • “Have gluten-free options.”
Next Steps to Meet Shopper Needs

A second FMI Power of Private Brands report will be released later this year, focused on food industry progress strategies. I feel confident that the industry can build on its successes if we analyze key insights and stay focused on meeting evolving consumer needs.

Download Power of Private Brands 2024