Introduction: Today, private label is no longer the plain stepsister of branded offerings. PLMA's 2009 Private Label Yearbook reported that private label sales in the United States jumped by more than 10% in 2008, hitting a record high of $83.3 billion — particularly impressive given the onset of the recession last year.
More than half of that volume came from private label sales in the supermarket channel alone, which grew a remarkable 9.4% to $53.8 billion, compared to branded goods in the same category, which grew only 1.4%. In the past five years, private label supermarket sales have risen 22%, outstripping the 10% increase managed by national brands in the same period.
As more cost-conscious consumers seek to stretch their food and beverage budget, supermarkets and major retailers are responding to this demand by extending their private labels. This white paper raises the following questions: Is this recent surge of private label demand in the food, beverage and supplement industry just a short-term savings strategy for consumers, or will sales continue to grow beyond this economic downturn? Also, how can packaging affect consumers' decision to purchase private label products?
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