Private Label Promise

Consumers cast a wide net when purchasing beverages

DUBLIN, Ireland -- U.S. consumers still rely on conventional supermarkets for the bulk of their beverage purchases, but they are also casting their nets wider to purchase beverages in convenience stores, restaurants and other channels. That's one of the conclusions in the newest research offering from Research and Markets, Dublin, Ireland, titled Store Brand Drinks in the United States.

The report hypothesizes that as consumers widen the array of channels through which they buy beverages, private-label products sold through food, drug and mass [image-nocss] merchandise (FDM) channels will face increased competition.

The overall report examines sales of store-brand beveragesproducts that are sold under a retailer's private label instead of national or regional brand name. The label may be the same as the retailer or may bear a separate brand name owned exclusively by that retailer.

The five beverage product categories with the highest store-brand sales were chosen for the report: milk, juice, bottled water, coffee/tea and carbonated beverages. These categories exemplify the current position of store brands and their potential to become stronger players in the market, according to Research and Markets. The study focused on beverages available through supermarkets, drug stores and mass merchandisers.

U.S. retailers taking on the challenge of offering private-label lines of beverages do so with a couple of different approaches. Some may offer only the basics in store brands, while others have highly developed programs. And the relative success of store-brand drinks varies not only from segment to segment, but also from channel to channel and retailer to retailer.

Overall FDM sales of the five store-brand beverage segments were $9.5 billion in 2004, up 5% from 1999 sales (a decline of 8% in inflation-adjusted 2004 dollars). At the same time, overall FDM sales of all products in these segments totaled $39.0 billion, up 11% from 1999 (an inflation-adjusted decline of 2%).

Click here for more information about the report.