Supermarket Perimeter - March 2021 - 14

PRIVATE v.
©
BRANDED
Using the unique offerings of private and national
brands to meet consumer needs
BY EMILY PARK

14 - MARCH 2021

It seems that early in the pandemic, when shelves were quickly
emptying, private brands were less likely to see out of stocks, and as
an often-cheaper alternative in a financial crisis, private brands saw an
early boost. But as all brands came back in stock, consumer preference
has really come down to trust in the product that comes with a name
on the package, said IRI's team lead for fresh, Jonna Parker.
" There used to be a larger share of products that weren't aligned
with any brand (private or national) and that has shifted predominantly
toward more third-party packaged items in the bakery and deli in
2020 because of the pandemic, " she said. " Consumers are preferring
branded over unbranded because there is a trust factor that is more
synonymous with third-party brands-whether they be private label or
national brands-consumers just want to know where it's from, that it
was packed safely and that it wasn't overly handled. "

Brands can ease the load on retailers
Historically, private-label food item programs have seen the most
success with center store items, with fresh items boasting the name of
nationally known brands or, as Parker noted, products without a brand
label at all.
As consumer attitudes have changed, there is plenty of room for both
private labels and national brands on the shelf, with each having their
own advantages. There are several areas where national brands can
easily step in to help retailers meet consumer needs.
Unlike private brands that usually have products throughout every
department in the store, national brands focus on specific categories
that lend to a leading presence and ready-to-go story to give
consumers the transparency and product attributes they're looking for.
" Partnering with a brand can help bring extra emphasis to drive
credibility of that category, " Parker said, pointing out that national
brands can also lend a helping hand when it comes to promotion and
educating consumers about products.

supermarketperimeter.com

KRISTINA BLOKHIN - STOCK.ADOBE.COM

W

hen shoppers go about choosing the foods to put in their
baskets, they are paying less and less attention to the
brand of the product itself and more attention to what
that product is offering them - whether that be value, an attribute
such as natural or sustainably produced, or a sense of transparency.
It's often different for each customer, and retailers can leverage
both privately labeled and nationally branded products to reach
consumers.
" Younger demographics are very agnostic to brands and more
focused on what does the product deliver to their own personal
requirements? " said Doug Baker, vice president of private brands for
Arlington, Va.-based FMI - The Food Industry Association. " It really
comes down to consumer attitudes toward products in general: is
it helping me with my health and well-being? Are they produced
responsibly? Attributes are driving those decisions. "
For fresh perimeter products, quality is one of the most important
attributes that shoppers take into consideration. In fact, when it
comes to produce, 76% of consumers say that high-quality fruits
and vegetables are the number one factor that comes to play when
choosing a grocery store.
Coming into the pandemic last year, private brands were well
positioned for success, noted FMI's 2020 Power of Private Brands
report released in the last quarter of 2020. In 2019, nearly half (46%) of
consumers said store brands were very or extremely important on store
choice. And aside from the second quarter of 2019, private brands were
experiencing faster growth than CPG brands in the grocery category.
Early in the pandemic, private brands saw strong performance. When
lockdowns began in mid-March private brands experienced a 70.9%
increase, while national brands clocked an increase of 54.1%. As time
progressed, though, national brand growth began to slightly outpace
private brands at the end of May, and private and national labels have
been toe-to-toe ever since.


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Supermarket Perimeter - March 2021

Table of Contents for the Digital Edition of Supermarket Perimeter - March 2021

Supermarket Perimeter - March 2021 - 1
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