Research Reveals Opportunistic Categories for Store Brand Development

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May 25, 2010

Retailers looking for opportunist categories to expand their store brands might want to explore bottled water, peanut butter and cereal, according to Consumer Edge Research.

The research firm surveyed more than 2,500 households and rated 90 categories of grocery products based on the likelihood that they will continue to prefer the store brand versions as the economy improves, according to a CNBC report.

While milk, cooking oil, bleach, paper napkins and spices were the most popular store brand categories, research revealed that consumers are extremely open to using store brand peanut butter, cereal and bottled water, according to Bill Pecoriello, president of Consumer Edge Research.

While the research bodes well for store brands, CPG companies such as Dean Foods are feeling the pinch, reporting a 43 percent decline in first quarter profit reportedly due to store brands that are making it difficult for the company to raise prices and improve profitability.

Other companies at risk from heavy store brand competition, according to Pecoriello, are McCormick, Kraft, Kellogg's and Campbell Soup, to name a few.

Quality, however, is key. Consumer Edge Research found that consumers are dissatisfied with store brand trash bags, liquid cleaners, disposable razors and batteries. Other categories that have low risk of store brand penetration are energy drinks, tobacco, candy, and wine and spirits, according to Pecoriello.

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