Roughly 80 percent of industry executives plan to increase private brand investments either moderately or significantly over the next two years, according to a recent FMI report. The research, titled The Power of Private Brands 2023: Innovation that Drives Winning Private Brands, examined how new private label products keep prices low.
“After temporary pauses to some innovation efforts because of pandemic supply disruptions and on-going consolidation many food retailers are ready to jumpstart innovation in collaboration with their supplier partners,” said FMI VP of industry relations, Doug Baker, in a statement. “Respondents said that while new products are always an important part of innovation, the efforts need to go well beyond new item introductions, including focusing on branding, purchasing, logistics, inventory management, marketing, and more.”
The report also outlined how grocers capitalize on shopper behaviors to market private-brand products in the following ways:
• Using labels to provide transparency and share value beyond cost savings.
• Providing more in-depth product information beyond the physical label, allowing grocers to utilize SmartLabel and other digital tools.
• Focusing on sustainable packaging and using labels to relay stories about food producers, and recycling information.
• Building consistent brand experiences across digital channels and using social media and ecommerce platforms to promote store brands.
• Incentivizing repeat customers with loyalty programs like discounts.
“Inflation-driven price increases throughout the store have also spiked significant consumer interest in private brands as shoppers look for ways to stretch their grocery dollar farther, with nearly 77 percent of customers who are already purchasing private brands saying they expect to buy even more in the future,” said Baker.
Related: Rao’s Homemade Prepares to Open Chicago Pop-Up; Why Trader Joe's Discontinues Items Frequently