Store Brands Gain Share in Significant Categories

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December 9, 2009

Store brands tallied significant gains in several categories this year, including baby food, frozen pizza, salad dressings and mayonnaise, snacks, and candles and incense, according to Nielsen data.

Private label baby food was the lead share winner with unit sales growth of 22.3 percent for the 52 weeks ended Oct. 3 in grocery, drug and mass merchandiser channels, including Wal-Mart.

During the same period, Nielsen data shows that overall store brand unit sales increased 5.3 percent, while national brand unit share dropped 2.3 percent.

In a Brand Week report, Lynn Dornblaser, director of CPG trend insight for Mintel said store brands grew 4.5 percent annually over the past eight years, and the recession further sparked sales. She added that most growth was driven by existing, not new, store brand products. Consumers are "rediscovering or discovering private label that has been on the market that they've never noticed before," Dornblaser said.

Kraft told Brand Week it has reduced store private label inroads with value-driven advertising for key brands such as Kool-Aid, Macaroni & Cheese and processed cheeses. "Overall, we view private label as we do any other competitor," Kraft rep Joyce Hode said. “Recently, we have seen private label growth trends slowing."

In a recent earnings call with analysts, Kellogg CEO David Mackay also indicated store brand momentum is slowing. "While it's a very tough economy, we have started to see the growth of private label moderate in the U.S. and around the world. The initial spurt of growth has begun to level off."

The Hartman Groups research, however, indicates store brands continue to gain consumer attention and share of shopping dollars. The majority of the 43 percent of Americans who tried private label products in the last year plan to continue purchasing store brands, according to Hartman Group.

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