5 Private-Label Insights From the 2018 McLane National Trade Show

ORLANDO, Fla. -- Convenience retailers and suppliers from around the country flocked to Orlando, Fla., Sept. 4 for the 2018 McLane National Trade Show—an exhibition of the hottest products manufactured by Temple, Texas-based supplier The McLane Co.—to get a look at what’s headed to convenience stores. One of the grandest topics discussed throughout the show was private label: Where it’s been, where it’s going and its potential for the future.

Private label’s presence at the show wasn’t by accident. The category accounts for $146 billion in purchases today, which equates to 20% of total annual spending, said Teresa Voelter, product director for McLane, during her presentation, "The World of Private Label." Moreover, private-label purchases are up 30% from 2017, and 83% of consumers say they trust these brands just as much as national labels.

Here are five insights into the world of private label …

Photograph courtesy of McLane

One hundred percent of U.S. households purchase private-label products—a possible result of increased value and quality, said Voelter. Seventy-four percent of shoppers say private label is a better value for their money, and 61% of shoppers say proprietary brand quality has vastly improved over the years.

“If consumers are satisfied with quality, they become loyal to the brand,” she said.

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Consumers between the ages of 25 and 64 are the most frequent private-label buyers, said Voelter. And while millennials and Gen X are often considered the main drivers of private-label purchases, baby boomers cannot be overlooked. The generation is increasingly stepping out of their comfort zone when it comes to the products they’re buying, she said.

“Boomers have always been brand loyal,” she said. “They are becoming more comfortable with private label.”

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Narrowing the number of options shoppers have can increase consumer engagement with private label, said Voelter. She said large companies such as Amazon, Walmart and Trader Joe's have perfected this strategy, often shelving no more than three varieties of one product.

“Private label comes down to simplifying,” she said. “It’s about giving shoppers what they want and not making them do all the work. For the consumer, it’s a no-brainer: They’re happy they don’t have to decide between 12 or 13 items and can move on with their purchase.”

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Although 53% of shoppers say they shop at a store specifically for private-label products, the amount who do so varies per region, said Voelter.

In the United States, the Mountain region (Arizona, Colorado, Montana, Idaho, New Mexico, Nevada, Utah and Wyoming), Mid-Atlantic (New York, New Jersey, Pennsylvania, Delaware, Maryland and Washington, D.C.) and South Atlantic (Virginia, West Virginia, North Carolina, South Carolina, Georgia and Florida) have the highest consumer engagement with proprietary brands, said Voelter.

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Voelter advises retailers to conduct due diligence when stocking up on private-label products—to consider factors that can help operators take their businesses to the next level, she says.

Such questions to ask oneself before diving into private label, according to Voelter, include:

• Are you a large, mid-sized or small chain?
• What is your buying power?
• How would you rank your chain on product innovation?
• Does your product selection represent more value for the money but have unique attributes?
• How does your chain use point of sale and technology for marketing purposes?
• Do you respond to consumer trends?
• Do you do anything to differentiate and offer items that no one else has?

Photograph courtesy of Shutterstock