ROCKVILLE, Md. -- Leaving behind the nondescript packaging and "generic" identity of a decade ago, private-label or store-brand food and beverage sales are soaring, according to Private Label Food & Beverages in the U.S., a new report from market research firm Packaged Facts. The report estimates 2006 sales at more than $48 billion, and projects that sales will top $56 billion by 2011.
Dairy and grain foods lead the pack, with 2006 U.S. retail sales reaching more than $7 billion and $5 billion respectively. Yet these segments showed some of the slowest [image-nocss] growth during the 2002-2006 period, unlike smaller segments such as pizza, which grew at a compound annual growth rate (CAGR) of 9.7%.
In the beverage category, store-brand bottled water and energy drinks top the list, with bottled water growing by more than 12%. Only the juice segment showed an overall decline during the same period.
Market growth comes as no surprise as retailers and manufacturers have replaced the low-quality "generic" products with high-quality products and packaging that rival national brands. Report findings show that 41% of shoppers now identify themselves as frequent buyers of store brands, versus five years ago, when only 36% did. The current wave of high-visibility private-label productsincluding organics and other premium farehas effectively contributed to both the building of brand equity and relationship building with core customers.
"The idea that a 'local' retailer can offer products as good or better than a national brand at a lower price only helps to build consumer confidence and loyalty towards the retailer," said Don Montuori, publisher of Packaged Facts. "The consumer gets a greater value and the retailer is more profitable."
Rockville, Md.-based Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a variety of consumer industries, including consumer goods and retailing, food and beverage and demographics.
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