Oct 15, 20243 min read

By: Tom Cosgrove, Director, Industry Relations, FMI

Power of Private Brands

Three months ago, FMI unveiled private brands consumer research that relayed highly positive news about shopper buying behaviors and perspectives.

Now it's time to get the industry's take — especially on what it will take to maintain these positive trends.

That leads me to introduce our newest Power of Private Brands report called Industry Strategies to Sustain Momentum.

I'm pleased this year's industry research offers concrete steps to overcome headwinds and stay on track. I want to relay a quick overview, and you can learn a lot more by downloading the report.

The Good News About Momentum

I'll start by relaying positive data points from the industry research:

  • More than 90% of industry survey respondents plan to moderately or significantly increase private brand investments in the next two years.
  • Respondents to the FMI survey report a goal of increasing their private brand dollar share by about four percentage points and their unit share by about 3.5 percentage points during the next two years.
  • About 80% of respondents say that private brands are performing well in delivering on value/price to help drive consumer purchases.
  • Brand development is ranked as one of the top strategies of importance — and the area of best performance — for enhancing retailer/wholesaler private brand strategies.
The Importance of Appealing to Younger Consumers

The research identifies timely areas of opportunity for private brands. The industry can do more to engage with younger consumers. While more than 80% of respondents say this focus is important, only 20% say the performance has been excellent or very good so far. Respondents point to digital marketing as an essential strategy for success.

The Need to Tie into Product Trends

The industry points to a wide range of opportunities to increase private brand sales and share growth. More than 50% of respondents cited premium, best value, health & well-being and simple clean ingredients — and overall, the feedback indicates even more opportunity now versus a year ago.

Enhancing Suppliers, Supply and Assortments

Survey respondents emphasized the importance of longer-term commitments to supplier arrangements, engaging more closely with existing suppliers and giving suppliers more opportunity to innovate. The industry needs to do more to succeed with these imperatives. For example, for supporting longer-term commitments, the industry needs to prioritize communications and win-win approaches.

Improving Trading Partner Alignment

The findings relay opportunities to boost trading partner alignment. As a case in point, manufacturers were far more likely than retailers to emphasize the importance of making longer-term commitments to supplier arrangements and engaging more closely with existing suppliers. Retailers were more likely to underscore the importance of developing new supply sources. Partners can improve success by becoming more aligned.

How Each Organization Can Make Progress

I hope you will download and read the full report for more insights and strategies. The report ends with a section that helps leaders interpret the FMI findings for their own needs by asking themselves questions to drive action steps — on topics ranging from investment strategies to relationships with suppliers. I feel confident that the industry can build on its successes if we analyze key insights and stay focused on meeting evolving consumer and industry needs.

Industry Strategies to Sustain Momentum     What's Ahead for Shoppers and Private Brands