PLMA e-scanner February 11, 2023

Issue #3 of 24
February 11, 2023

NEWS ROUNDUP
Store Brands Sales Smash Record

Store brands had a record-breaking year as 2022 sales reached $228.6 billion, an increase of $23 billion over the prior year, according to data provided exclusively to PLMA by IRI. Overall dollar sales grew by 11.3%, nearly doubling national brands' 6% increase for the 52-week period ending January 1, 2023. 

Store brand dollar share for 2022 came in at 18.9%, an increase over the 18.2% share in 2021 in all the major channels. Likewise, unit share was 20.5%, an increase over the 19.9% in 2021. 

Growth was generated across the store. Of the 17 departments tracked by IRI, 16 of them showed store brand growth over the past year, with only tobacco declining. Beverages were the strongest category, adding 19.1% in dollar sales, followed by Deli Prepared (17.3%), Refrigerated (17.1%), Liquor (15.6%) and General Food (14%) rounding out the top five departments. 

Sales increases were not limited to food. Non-food categories also showed robust growth. General Merchandise private label sales rose 9% as did the Health (3.1%), Beauty (2.7%) and Home Care (2.1%) departments. Combined the four departments had over $40 billion in total private label dollar sales. 

While unit sales continued to decline for both national and store brands throughout 2022, store brands seem to be holding on to unit sales better than national brands. For all of 2022, national brand unit sales declined 4.1% while store brand unit sales decreased 1%.

Notably, in the last two months of the year, store brand unit sales growth turned positive, reaching plus 0.3% for both November and December while national brand unit sales continued to decline, by 4.4% and 3.7% respectively. 

Later this month, PLMA will release its annual report, which will dive deeper into the historic year of private brand sales. The 2022 results are currently available for members at plma.com in the IRI Unify section, which also offers monthly sales updates on 317 categories, 967 subcategories and 17 departments. 

 

Lunch and Learn to Focus on Store Brand Innovation, Feb 23

PLMA continues its popular Lunch & Learn series on February 23 with a look at store brand innovation and marketing and what it means for the industry, manufacturers and retailers.

Titled “The Private Label Advantage (Ready, Set, GO!)” the session will be presented by Gary Stibel of The New England Consulting Group. He will share the strategies and tactics national brands have been using for decades to maintain their leadership over private label.

"Retailers and suppliers have done an excellent job improving product quality; some national brands are even benchmarking and reverse engineering store brands," says Stibel. "Ditto innovative packaging, which repositions some brands as old and irrelevant. And also in competitive pricing, with best-in-class premium lines and the superb execution of good, better, best tiers.”

“Now, in these inflationary times we have a rare opportunity to seize the moment and pave the last mile with great marketing," he added.

"We'll explore how those executions can be used by the private brand community to turn the tables. We are on our marks. We just need to go and go quickly because this favorable environment won't last forever."

This is PLMA’s third 2023 Lunch & Learn session. The first was held on January 26 and focused on growing private label sales and hosted by Kyle Patterson, Senior Vice President of Daymon. The session was held February 2 with a review of store brand sales from 2022 by MaryEllen Lynch of IRI.

Lunch & Learn sessions are conducted online for 60 minutes starting at 12:30 PM EDT. The professional development program is complimentary for all PLMA member manufacturers, brokers, and suppliers as well as for retailers and wholesalers.

To register for any session, please click here or please contact Julia Meehan at education@plma.com for more information.

 

FDA Planning Study of Front-of-Pack Labeling

The U.S. Food and Drug Administration is once again considering front-of-pack labeling “to help consumers interpret the nutrient information on food products.” This will also include the testing a controversial traffic light approach to show when a product is high or low in select nutrients and a design that recalls the industry-created voluntary Facts Up Front system.

The study is entitled “Quantitative Research on Front of Package Labeling on Packaged Foods.” The agency published a notice on January 25 of the upcoming labeling research project in the Federal Register for comments. The comment period will last 60 days. To read the notice click here.

The FDA cited the rise of chronic diseases that are diet-related among Americans for revisiting the issue. “To help address this problem … we are exploring the establishment of a standardized, science-based FOP scheme that helps consumers, particularly those with lower nutrition literacy, quickly and easily identify foods that are part of a healthy eating pattern,”​ the agency said in a Federal Register notice published last week.

The agency plans to hire a contractor to offer an online questionnaire to 3,000 residents selected to represent different ages, genders, education and backgrounds consistent with the most recent Census results. Participants will be shown different formats of front-of-pack labels and will answer questions on product content, label perceptions and purchase intent.

Establishing a new front-of-pack labeling system is an idea the Biden administration has championed, especially during last fall’s White House Conference on Hunger, Nutrition and Health.

The FDA has investigated front of package labeling changes over the past decade but this attempt could be stronger. The agency is using supporting documents available with the Federal Register to show how designs like “traffic light” colors could benefit consumers. The traffic light packaging system highlights if a product is high or low in saturated fat, sugar or sodium, as well as fiber and calcium.

 

Kroger Cites 2023 Private Label Food Trends

Kroger has released its 2023 Food Trends Report, detailing which of its store brand products it expects to be popular this year.

Stuart Aitken, senior vice president, chief merchant and marketing officer at Kroger, said family and cooking at home will remain important to consumers this year.

"Customers not only learned to cook during the pandemic, they grew to love it. In 2023, cooking at home remains a mainstay with customers gathering together to celebrate time lost and save money as inflation moderates. From global flavors and elevating a special meal to household staples, Kroger is proud to offer our customers fresh, affordable food every day and we are honored to play a small part in so many shared happy moments,” he said.

Kroger believes consumers will seek products such as cheese, cheesecake and salt and pepper flavored items. Snacking will continue to be popular and dips and dippers as well as fresh veggies and protein packed snacks both for snacking and for parties. Sweet and salty snacks are also on the rise with customers according to Kroger’s trends report. Shoppers will be seeking traditional salty snacks as well as finding an easy dessert option for the family or celebrations.

The report said home meals will remain a staple with shoppers as they continue to seek ways to elevate their menus. Products such as shrimp, sea scallops and crabcakes could be popular to help add a special element to a meal and save money.

Foods and flavors from around the globe are being embraced as customer favorites, according to the report. Families and friends are seeking to diversity both meals and flavors found in food they bring home.

Trader Joe’s Reveals its Customers' Favorite Products

For the 14th year in a row, Trader Joe’s has released its Customer Choice Awards which highlights which products its loyal customers like the best.

Trader Joe’s polled 18,000 customers on its website and Instagram account with the question “If you were to spend the rest of your life on a deserted island, which nine Trader Joe’s products would you take with you?”

The product with the most votes both in snacks and overall was Trader Joe’s Chili & Lime Flavored Rolled Corn Tortilla Chips. For cheese products, Trader Joe’s English Cheddar with Caramelized Onions was favored the most by consumers while Butter Chicken with Basmati Rice was voted the top entrée.

Among household products, Trader Joe’s Scented candles were the most popular while in desserts Trader Joe’s Mini Ice Cream Cones came out on top. The vegan product with the most votes was Trader Joe’s Kale & Cashew Pesto while the number one beverage was Trader Joe’s Sparkling Honeycrisp Apple Juice.

Several products were ineligible for the contest because they have won their categories several times. These have been inducted into the newly created Trader Joe’s Product Hall of Fame.

 

FTC Prepares Possible Antitrust Suit Against Amazon

The Wall Street Journal has reported the Federal Trade Commission is considering an antitrust suit against an array of practices by Amazon accusing them of anticompetitive practices.

In recent years the FTC has looked at business practices at Amazon in recent years including whether it favors its private label products versus competitors’ on its platforms.

The Journal reported Amazon officials haven’t had individual late-stage meetings with each of the FTC commissioners to make their arguments against a legal challenge, possibly indicating ant action by the commission is not imminent.

In recent years the FTC examined Amazon practices especially whether it favors its private label products over competitors products on its platforms and how it treats outside sellers on Amazon.com, The FTC also has been inspecting Amazon Prime subscription service’s bundling practices, some of the people said. However, which aspects of Amazon’s businesses, if any, would be targeted by the agency is unknown.

Amazon and the FTC both declined to comment on the story. Amazon has stressed repeatedly that it competes fairly and that its services benefit both customers and sellers on its platform.

 

Target’s Brightroom Tops Fastest Growing Private Brands

Three of the ten fastest-growing private brands of 2022 are Target brands, according to research company Numerator.

Target’s home organization brand, Brightroom, which includes trash cans, closet and home storage bins, topped the list. The company’s Mondo Llama and Favorite Day brands were ranked in the top 10.

Target’s Mondo Llama brand has a variety of products including home, school and office supplies and party supplies was ranked fourth. Favorite Day, whose products include a variety of food and beverage products, finished 5th on the list.

Brands from other retailers that showed the greatest sales increase from 2021 while also holding at least 5% household penetration included: Giant Food, Crav’n Flavor from Food City, Nature’s Touch from Kiwi Trip, Aldi’s Clancy’s brand, ShopRite’s Bowl & Basket brand, BJ’s Wholesale’s Wellsley Farms and Albertson’s Signature Farms.

In the stores

CVS Health has introduced One+Other into its stores and CVS’ website in late January. The new line spans a wide range of personal care products, including cotton balls, eyelash curlers, nail polish remover, tweezers and clippers, among others. The One+Other brand (pronounced “one another”) includes more than 200 stock keeping units in-store and online.

4U by Tia, a new haircare brand founded by actress and entrepreneur Tia Mowry, is coming exclusively to Walmart. The line is 100% vegan, silicone-free, sulfate-free and paraben-free, and will be sold at over 2,800 Walmart stores nationwide as well as through the company’s website. Products from the initial launch will include Curl Defining Curl, Multiuse Hair Oil, Leave-In Curl Cream and more.

United Natural Foods, Inc. (UNFI) is expanding its private label Wild Harvest organic produce  brand to include over 40 new items, the grocery wholesaler has announced. Organic items added to the Wild Harvest brand include bagged apples, russet and sweet potatoes, oranges, mangoes, limes, avocados, tomatoes, broccoli, cabbage, and iceberg and romaine lettuces.

Save A Lot has added a line of hot cocoa mixes to its stable of private brands. The mixes are under the McDaniel’s Cocoa name and come in new flavors and varieties including salted caramel, peppermint, spiced apple cider and cocoa with marshmallows added.

The popular Selfless by Hyram brand has announced it is moving to Target after its decision to end its partnership with Sephora.  Selfless will become available at Target both in store and online starting in early February. Hyram Yarbro, the founder of the line, has 6.5 million followers on TikTok, 4.55 million on YouTube and 976,000 on Instagram.

The Vitamin Shoppe is partnering with G Fuel for an exclusive line of energy drinks. The products are inspired by video game and anime series including Dragon Ball Z, Naruto, Pac-Man and more. The Dragon Ball Z inspired drink is called Kamehameha  and comes in Strawberry Lychee flavor. Pac-Man’s drink is called Power Pellet in cherry lollipop flavor and Soda Ice Candy is inspired by Naruto Shippuden.

To celebrate St. Patrick’s Day, health and wellness retailer GNC has added a new, limited-edition Irish Creme flavor to its private label protein products. GNC Total Lean Layered Lean Bar, GNC Total Lean 25 Lean Shake Powder and GNC AMP Wheybolic Whey Protein will all offer the flavor.

Macy’s has announced a partnership with Tracee Ellis Ross to launch a line of hair care and styling products as the retailer continues its expansion into cosmetics and beauty products. It’s the second partnership between Macy’s and a celebrity-founded beauty brand; the retailer launched Kylie Cosmetics last year.

Market research
Retailers Focusing on Promotions Using Private Brands

The market research company Numerator has found almost one of every three promotions by retailers are private brands.

Numerator reported as consumers face increasing prices and recessionary pressures, retailers and brands are adjusting their promotions to support them in those challenges. It found almost one-third of December 2022 promotions featured a private brand.

Share of voice for private-label brands is up by almost 10 percentage points in December 2022  when compared to findings from December 2021. Numerator also found retailers provided more promotions that focused on absolute savings, about 18% more versus what a similar study found a year ago. The reported data includes all products sold at retail, not just fresh produce.

The research firm also reported more than 1 in 4, or 27%, of consumers say they would switch brands to take advantage of a deal and 32% of consumers often use coupons to save money, while 33% of consumers check store ads before shopping.

Numerator tracks purchase data and survey verified buyers to understand these shifts in consumer behavior.

 

Herbal Supplements Show Strong Growth in Q4

New data from shopper research firm Catalina shows herbal supplements saw a large increase year-over-year in the final quarter of 2022.

Unit sales of herbal supplements, including private brand sales, increased 48% year-over-year in Q4 of 2022. Catalina believes its data shows much of this growth was due to consumers battling the “tripledemic” of flu, RSV and COVID-19 late in the year.

The herbal supplements category saw a 22%-dollar sales increase compared to the same period in 2021. Adult and kids cough/cold medicines also saw hefty unit increases. The largest increase in unit sales came from kids analgesics products, which recorded unit sales increasing 67% and dollar sales up 93%. The average prices for those products increased by 15%.

Adult cough/cold medicine was the next highest, with unit sales rising 30% while dollar sales grew 44%. CBD supplements saw the largest decreases in unit change with a loss of 39% and dollar sales falling 49% when compared to Q4 of 2021.

PLMA News and Happenings
Kroger Store Brands Chief to Speak at PLMA’s March Conference

Juan De Paoli, vice president of Our Brands at the Kroger Co., will take the stage at PLMA’s Annual Meeting & Leadership Conference, March 22-24 in Orlando at the Hyatt Regency Grand Cypress.

De Paoli will speak at a breakfast session on Friday, March 24.

“We are pleased to welcome Juan De Paoli to our annual Meeting and Leadership conference,” said PLMA President Peggy Davies. “Juan’s 20-plus years of experience, vision and talent has greatly contributed to consumer engagement with retailers’ own brands.”

De Paoli joined Kroger in 2021 and he is responsible for driving Kroger’s private label vision, strategy, and program development to deliver long-term growth and enhance the company’s brand equity, strategic positioning, revenue, profit, and market value.

He also provides leadership to and develops high-performing team members, oversees product development, testing, sourcing, vendor selection and private label marketing programs related to private label products. Prior to Kroger, he served as senior vice president of Private Brands, Ahold Delhaize USA; and spent 12 years at H-E-B in its Own Brand organization.

The theme of this year’s PLMA's Annual Meeting and Leadership Conference is “What Does Winning Look Like for Store Brands?”

Other speakers at PLMA’s 2023 Annual Meeting & Leadership Conference include Kevin Ryan of Malachite Strategy and the Culture Matters newsletter; James E. Dillard III, Executive Vice President and President, Consumer Healthcare Americas, Perrigo; Roger Davidson, an industry veteran and leading consultant in the food retail industry; Tim Pollard, Founder & CEO of Oratium; and Julien LeBlanc, Co-Founder and President, Blueprint North America.

The conference brings together manufacturers, retailers, and many others and focuses on expanding private brand knowledge of the industry in general, as well as for personal and professional development.

To register for the conference please click here or for additional information, contact Carleen Foster at conferences@plma.com

 

PLMA Live Scores Interview with dunnhumby

The latest edition of PLMA Live features an interview with Erich Kahner, Director of Strategy & Insights at dunnhumby and his thoughts on the company’s surprising results of its latest Retailer Preference Index (RPI) survey.

This year’s RPI was unanticipated as Texas retailer H-E-B took over first place from Amazon as U.S. grocery leader. H-E-B had finished second to Amazon in the previous two years. Overall, Amazon dropped to third place as Costco Wholesaler moved up the list to second place.

The other grocers in the top 10 were Wegmans, Sam’s Club, Market Basket and Amazon Fresh. Trader Joe’s finished in the 8th spot, while WinCo Foods was at No. 9 and BJ’s Wholesale Club in 10th place.

In PLMA Live’s interview with Kahner, Carol Angrisani takes a closer look at the report’s findings and what part store brands may have played in the results. You can watch it at www.plmalive.com

'World of Private Label' Show Set for May 23-24

In about three months the global private brand industry will again meet at PLMA’s “World of Private Label” International Trade Show at the RAI Exhibition Centre, Amsterdam, May 23-24.

Some 25,000 professionals from more than 120 countries are expected to participate. Exhibitors will be joined by retailers, wholesalers, importers, and others, to examine products, strengthen partnerships, identify innovation in business practices and plan for profitable store brand growth.

Products on display will include fresh, frozen and refrigerated foods, dry grocery, and beverages as well as non-food categories, including cosmetics, health and beauty, household and kitchen, auto aftercare, garden, and housewares & DIY. The show will also present more than 2,500 exhibiting companies including 50 national and regional pavilions.

For more than 35 years, PLMA’s annual “World of Private Label” International Trade Show has brought retailers and manufacturers together to help them find new products, make new contacts, and discover new ideas that will help their private label programs succeed and grow.

In the past year, private label has increased its position throughout nearly all national markets. The future looks to be bright for store brands as retailers expand internationally and take a larger role in marketing themselves and the products that they sell.

For more information, click here.

 

PLMA is Open to New Membership

The Private Label Manufacturers Association is the only trade association devoted exclusively to the private label industry. Founded in 1979, PLMA currently has over 4,000 member companies. Membership is open to manufacturers, brokers, trade suppliers and other companies. PLMA members enjoy exclusive access and discounted pricing to PLMA events and services. For more information about membership, please visit www.plma.com or contact Barbara Cruz at (212) 972-3131, EXT. 1225 or bcruz@plma.com.

 

Events
Online Speaker Series

Attendees can advance their knowledge about the private brand industry by attending PLMA’s Lunch and Learn online speaker series

November 7, 2024
Lunch and Learn - Online
Register