Retailers report having strong goals over the next two years for their private brand portfolio, with a current average dollar share of 18.2 percent and a goal of 22.6 percent share in the next two years, according to a report by The Food Industry Association.
“As the food industry looks toward the future for private brands, they are setting bold targets based on high demand from consumers,“ said FMI’s VP of industry relations Doug Baker, in a statement. “To reach these goals, retailers and manufacturers are looking at several tactics including private brands outside the U.S. that have higher shares for approaches to growth, including innovation, strategies to accelerate growth and enhanced ecommerce availability for private brands.”
Innovation is top of mind when retailers focus on private label: 81 percent of food retailers and manufacturers report innovation as the top strategy for increasing private brands’ market share. Specifically, 69 percent of respondents see a future for private brands’ premium products, 60 percent see products with simple ingredient lists, 56 percent see products offering value in a category, and 42 percent look toward prepared meal solutions.
For retailers opting to bolster their private brand assortment, ecommerce capabilities are key for expanding growth: only 60 percent of private brand products are available on ecommerce, so availability expansion is needed. Both retailers and suppliers also noted several key feature improvements to the online shopping experience that will facilitate ecommerce sales, like prioritizing search functionality in their strategy, uploading compelling product images, including attribute tags like “well-being”, and participating in suggestive selling.
Related: Thrive Market Launches Curated Gift Boxes; Meijer Seeks Midwest Makers