Eighty-four percent of food retailers and manufacturers surveyed say that private brands are extremely important to their organizations and 93% plan to moderately or significantly increase private label investments in the next two years, up from 82% a year ago, according to FMI – The Food Industry Association’s “The Power of Private Brands 2024: Industry Strategies to Sustain Momentum” report.
Key areas of investment include adding capacity and value through innovation and new product development in growth opportunities like premium, best value, health and well-being, products with simple/clean ingredients, and frozen and fresh foods, according to the report.
Price (71%) and good value (72%) are top reasons cited by shoppers for buying more private brand items, and 80% of food industry respondents believe that private labels continue to perform well in terms of driving growth of customer purchases via delivering value.
However, more than half (54%) of retailers are focused on emphasizing the value of private brands beyond price, focusing on other areas that motivate consumers’ private brand purchases, including quality, taste, and meeting meal solution needs.
Eighty-one percent of food industry executives said that appealing to younger consumers is the top area of importance, along with emphasizing value/price, to driving private brand growth.
Both food retailers (69%) and manufacturers (52%) cited digital marketing as a top strategy to attract younger consumers from digital-native generations. Additional strategies cited by retailers and manufacturers were increased use of samples (33%), leveraging shopper insights (30%), boosting convenience (25%) and enhancing ecommerce experiences (20%) through improved search functionality, suggestive selling, and more compelling online product images.