Retailers and CPG Companies to Focus on Store Brands in 2010

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December 16, 2009

While it’s no surprise that retailers plan to focus on store brands in 2010 to continue sales and profit momentum, it looks like it’s also top of mind among consumer packaged goods companies (CPGs).

In a Smart Brief poll, the Grocery Manufacturers Association and the Food Marketing Institute each asked their constituents to forecast what 2010 will bring. When manufacturers were asked which topic would be most important to their business, the top answer was store brands (36.24 percent), followed by health and wellness (see the chart below from the GMA Smart Brief daily newsletter) .

On the supermarket front, by a slim margin, only health care reform beat out store brands as the topic that will have the greatest impact on their business. Stores brands scored 30.71 percent against health care reform’s 31.43 percent.

Clearly the market share strides of store brands has CPG companies concerned and more focused on counter strategies next year. When asked what they think consumers will be looking for in 2010, manufacturers by a landslide said promotions (43 percent), followed by health or natural products and store brands (15.96 percent).

Grocers, on the other hand, believe shoppers will be looking for increased customer service (35.75 percent), followed by stores brands (25.91 percent), and local foods (15.03 percent).

Interestingly, when asked which initiatives grocers will most likely focus on in 2010, store brands didn’t even make the cut (manufacturers were not asked this question). Topping the list by more than a 20-point margin was customer service (53 percent), followed by sustainability programs (30.77 percent), health and wellness programs (13.46 percent) and community partnerships (1.92 percent).

While CPGs plan to focus on store brand counter strategies, it seems retailer attention will be squarely on the customer to improve all areas of service and satisfaction.

Read These Related Articles:

• Store Brand Savings Still Beat Aggressive CPG Discounting
• Store Brands Drive Differentiation and Profit
• Citigroup: National Brands Gained Share From Store Brands in August
• PLMA Live: Nielsen V.P. Says Store Brands Will Remain Strong After the Recession
• Nielsen: Look to Europe for the Future of U.S. Store Brands

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