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.

Events
PLMA's Executive Education

Where do you go to learn about developing and marketing store brands? The answer for more than 1,900 graduates has been PLMA’s annual Executive Education Program.

November 15 - 16
Hyatt Regency O’Hare, Chicago
Register