GLOBAL – After a disappointing 2020 where growth in private label sales was outpaced by National Brands for the first time in in a decade, sale growth in the category has rebounded, according to a recently released data by NielsenIQ.
The rebound in sales has been attributed to an increase in consumers who are actively looking for ways to reduce their spending as uncertainty and concerns over unemployment loom.
In a webinar presentation, Kerry also attributed the resumption of growth in private label sales can also be attributed to continuing innovation, e-commerce potential and consumers’ growing willingness to try new brands.
NielsenIQ says it has tracked consumers’ attitudes toward spending over the past year, categorizing them into two groups: “constrained” and “insulated.”
According to the firm, the percentage of shoppers that fall into the former category has grown recently, rising from 23% to 46% between September and December.
This category of buyers, due to their constrained purchasing power are more likely to consider private label brands due to their affordability compared to national brands.
The firm further notes that Insulated buyers are also considering private label brands but are gravitating more toward new and innovative products.
Kerry, citing a proprietary survey of 1,500 private label consumers, notes that pricing, safety and variety are top attributes these consumers looking for.
Online shopping is also shaping up to be the next major merchandising opportunity for private label.
“Retailers own that space, and so they actually have more control over what your eye is taken to, which also means that it creates a great opportunity for retailers to support the growth of their own brands,” said Kara Sheesley, vice president of retail engagement at NielsenIQ.
Amazon, the major driver of e-commerce in the US, recently launched its private label line known as Aplenty featuring a number of products including crackers, condiments, grahams, cookies and pita chips.
The e-commerce giant’s entry into the private label shows the potential of the segment which is poised to grow by US$215.81 billion during 2020-2024, according to Research and Markets.
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