World News: 16:28 GMT Wednesday 11th July 2018. [IRI via Businesswire via SPi World News]
Private brand performance within the grocery channel dramatically increased in the past year, posting annual sales of $138 billion across multi-outlet plus convenience store retail channels in the United States in 2017, according to new insights from Food Marketing Institute (FMI) and IRI®. Still, supermarkets face major competitive challenges and are experiencing steady own-brand share leakage to other retail channels.
FMI and its insights provider IRI recently released the first half of a four-part series in their annual exploration of the Power of Private Brands — from the business side and from the perspective of the consumer. The “consumer” study focuses on insights into how to build engagement, while the “register” report reveals how the grocery industry can improve its private brand business.
FMI Vice President, Industry Relations, Doug Baker commented on the fact that 69 percent of consumers said it’s very or somewhat important to have a good assortment of private brands in food and beverage. He said, “Private brands have become full-fledged brands in their own right, and the research emphasizes the importance of not making assumptions when appealing to demographics and audiences, including how store brands are marketed and positioned. In fact, Generation X is responsible for 31 percent of all dollars spent on private brands across all outlets, compared to 19 percent each for older millennials and younger boomers.”
The research outlines consumer demand trends as well as a range of next steps for retailers, including how to further leverage the consumer’s desire for variety, and how to increase trial to battle any lingering negative perceptions. Retailers made considerable progress not only in reversing sales declines, but in closing the gap with national brands, supported by a reduced sting from deflation. But the news wasn’t all positive. Retailers outside of the grocery channel – including mass and club operators – have been performing much better in private label brands.
“While the news for private brands overall is good, there is a special hurdle for food retailers,” said Mark McKeown, principal of Client Insights for IRI. “We needed to uncover why the biggest growth is taking place outside the grocery channel. Our first step was examining the evolution of private brands into tiers and which of these were driving growth. We then took a closer look at how private brands are performing in specific categories and departments to address competitive challenges. And this year, we examined the different groups of private brands, including lifestyle (products that cross over categories and departments and deliver a common promise, such as clean label or organic) compared to regular (retailer banner brands that do not deliver a common promise) and how consumers perceived and purchased either.”
To download the first half of the four-part series, The Power of Private Brands, Part I: From the Register and Part II: From the Consumer, visit www.fmi.org/privatebrands. FMI and IRI will unveil industry and global trends to round out the series in fall 2018.
Food Marketing Institute proudly advocates on behalf of the food retail industry, which employs nearly 5 million workers and represents a combined annual sales volume of almost $800 billion. FMI member companies operate nearly 33,000 retail food stores and 12,000 pharmacies. FMI membership includes the entire spectrum of food retail venues; single owner grocery stores, large multi-store supermarket chains, pharmacies, online and mixed retail stores. Through programs in public affairs, food safety, research, education, health and wellness and industry relations, FMI offers resources and provides valuable benefits to almost 1,000 food retail and wholesale member companies and serves 85 international retail member companies. In addition, FMI has almost 500 associate member companies that provide products and services to the food retail industry. For more information, visit www.fmi.org and for information regarding the FMI Foundation, visit www.fmifoundation.org.
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help CPG, OTC health care organizations, retailers, financial services and media companies grow their businesses. A confluence of major external events — a change in consumer buying habits, big data coming into its own, advanced analytics and personalized consumer activation — is leading to a seismic shift in drivers of success in all industries. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand, cloud-based technology platform, IRI is empowering the personalization revolution, helping to guide its more than 5,000 clients around the world in their quests to remain relentlessly relevant, capture market share, connect with consumers, collaborate with key constituents and deliver market-leading growth. For more information, visit www.iriworldwide.com.
Business Wire: 16:28 GMT Wednesday 11th July 2018
SPi News is published by Sector Publishing Intelligence Ltd.
© Sector Publishing Intelligence Ltd 2018. [Admin Only]
Sector Publishing Intelligence Ltd.
Ground Floor Offices, Little Keep Gate, Barrack Road, Dorchester, Dorset DT1 1AH
Registered in England and Wales number 0751938.