According to Private Label Manufacturers Association, 1 in 4 products sold in the United States are private custom label or store brands.
The Private label manufacturers organization say that the custom label market grew by 4.4% in 2018, adding $5.5 billion in sales to make a total of $129 billion.
The group’s survey also showed that the common response from consumers was: “in general, store brand products I have bought are just as good if not better than the national brand version of the same product.”
Over 40% of consumers said that buy store brands frequently, or always, and 25% said they are buying more store brands than five years ago.
Why Private Product Labels?
But why are retailers making custom labeled products? Because Custom printed labels are good for labeling you product with your company information. This creates consumers who learn your logo, colors, and label, and if they like it will keep coming back for more future sales. These retailers get market share, and volume, and so does the custom label company printing the labels.
Trader Joe’s launched their first custom labels and private labels brand in 1972, with a granola product under their own name. By 1997 they were adding 10 new private label products a week.
3 Different Levels of Quality
The recent trend for retailers offering private labels has been to offer 3 different types of brands. One high quality brand, the second brand a middle quality, and the third brand a specialty line like ethnic, or organic products.
The Future of Private Product Labels
The predictions are that non-GMO will be the big winner in the coming years, with consumers more informed than ever about consumer products. According to PLMA (Private label manufacturers association), Trader Joe’s offers almost 100 gluten free products. Custom label products are being released specifically for diets like vegan, diabetic, and lactose intolerant. Catering to those who have special needs.
For example, The Amazon Basics brand also created batteries that compete with Energizer and Duracell. What battery would you choose? The Amazon Basics battery, Energizer, or Duracell?
There will be a growing assortment of prepared foods and processed foods, created or cooked by a different company, that is using the retailer’s private label.
In-store baked foods have been growing, and is helping to bring more customer loyalty and foot traffic.
Overall private labels are good, they help retailers gain more customer loyalty, and also keeps product manufacturers and food manufacturers producing, and is great for consumers by creating more competition in the market place. One thing Is clear, the days when the grocery store was just a place to buy big name brands, is slowly becoming less popular.
Or will consumers rise up with backlash in the coming years for private labeled brands, and switch back to the big name brands they know?