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Consumers Boost Engagement With Private Brands

By: Doug Baker, Vice President, Industry Relations - Private Brands, Technology, FMI

Momentum for private brands continues to build, according to the latest FMI reportPicture82 based on IRI data. The 2019 edition of FMI’s Power of Private Brands: From the Consumer finds that food retail private brands are advancing in several ways:

  • They are driving higher purchase levels from consumers across multiple generations.
  • They are doing the same across a bigger variety of income groups.
  • They are increasingly known for their ability to draw shoppers to stores.
Three-Year Trends Highly Positive

This year’s report marks the third year of FMI consumer research based on a national shopper survey from IRI. The trend lines have become clearer. Consumers are becoming heavier purchasers of private brands, as these items represent a greater share of shoppers’ baskets. In particular, more shoppers are moving beyond “light” buying patterns, defined as representing less than 26% of a shopping basket.

The momentum is playing out across generations. While millennials have shown the most engagement until now, older generations are starting to catch up by stepping up private brand purchases. Gen X consumers reduced their light buying by eight points since 2016, and Boomers did so by five points.

No less important is how private brands are impacting different income groups. The longtime stereotype is that lower income shoppers are the biggest proponents of private brands. However, in the past three years, middle- and higher-income shoppers have stepped up buying the most. Their buying patterns have been moving from light to heavier.

Private Brands Accelerate ‘Destination Impact’

Retailer brands are showing off their magnet-like abilities to draw consumers to stores. This stems from the success of private brands in meeting a wide variety of consumer needs, from value to lifestyle.

Forty six percent of consumer respondents said private brands are highly influential in their choice of store, up significantly from 35% three years ago. The results vary somewhat according to retail channel, which shows that consumer expectations differ by type of store.

Meanwhile, 54% of millennials emphasize a big store destination impact of private brands. This represents a huge positive as retailers are successfully courting younger shoppers.

Price and Value Grow in Importance

Even as retailers leverage private brands for lifestyle strategies, ranging from organic to specialty, price and value are still crucial. In fact, the 2019 research shows these aspects are even more important to shoppers. 

This finding likely reflects the increased ability of consumers to compare items across a wide range of stores and retail channels. Consumers want high quality and innovative private brand items, but they also want it on their terms, with the best possible prices and value. 

Next Steps — From Packaging to Marketing

This year’s report offers guidance to retailers. It includes the imperative of keeping up with the shifting needs of younger shoppers, and the importance of continuing to boost price perception. There’s also a recommendation to make sure that packaging communicates quality, given that a minority of respondents, 18%, said private brand packaging makes products appear to be lower in quality than national brands.

Retail leaders need to focus on the growing ability of private brands to draw shoppers to stores. The big jump in this capability over the past three years underscores how private brands are incredibly valuable to retail organizations. This is an important reason to keep investment levels and organization engagement high as a new decade gets underway.

Download 2019 Power of Private Brands: From the Consumer

Distribution channels: Food & Beverage Industry


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