Report: National brands gaining on private label

November 13, 2012

A new report from SymphonyIRI shows that private label brands have experienced recent share losses in the United States across many consumer product good categories (CPG) and channels. When the recession started, private label products experienced a boon as consumers were looking to save money. To protect their brands, national brand manufacturers have been working to offer new value, quality, and innovation.

“Signs that private label may be hitting a proverbial glass ceiling have emerged during the past couple of years,” said Daniel Grubbs, Principal, Symphony Consulting, SymphonyIRI Group. “While private label has made some impressive gains, our new report reinforces the fact that private label has entered a phase where there are pockets of growth among categories and retailers, rather than a general expansion. Private label’s success still relies heavily on price discounts, and private label purchases are quite concentrated among a minority of shoppers.”

Penetration continues to be a key influencer of private label share. Penetration has slid across a majority of CPG channels during the past two years, with the exception of the club channel, which has seen private label penetration increase more than one point since 2010, to fewer than 43%. Penetration gains are also helping to support growth at the category level, including categories such as refrigerated salad/coleslaw, where private label share has historically been above average.

Private label sales are quite concentrated. At present, the top one-third of private label buyers account for nearly two-thirds of all private label sales. And, while overall private label penetration is nearly universal, private label penetration is below 25% across three-quarters of CPG categories. Despite the measurable discount offered by many private label CPG products, the last two years have witnessed a growing average private label price per volume and a declining private label price gap versus the category as a whole.

Private label share is on the decline in 40 of the 100 largest CPG categories. In these categories, innovation is often playing a key role in thwarting private label in-roads. Price is also a key influencer of trends in this area and is critical to monitor in the coming weeks and months, as private label prices are rising more quickly versus industry average. 

Press release