recently attended two industry events, one related to packaging and the other dedicated to ingredients, where I was intrigued to hear presentations that covered the surge in private label products.
It’s not that the upswing in private label purchases is new information to me – industry reports have provided evidence that value-minded consumers are turning to private label as a way to cut expenditures. What impressed me was that the trend had become such a factor in the industry that suppliers are keeping tabs.
A portion of the trend can be attributed to consumers’ increasing concerns about their spending habits, but we’ve also seen retailers step up their store brand platforms. Sam’s Club recently introduced Rue 33, a premium vodka under its Member’s Mark store brand. Last year, Sam’s Club sister store Wal-Mart redesigned its Great Value brand, and fellow retailer Target launched its “Up and Up” banner.
I agree that consumers’ shift from big-name brand loyalty does present a challenge for the name brands in the industry, but I don’t think it’s time to count out the importance of national brands, especially in the beverage industry. This could be attributed to the emotional connection consumers have to beverage brands, whether it’s a matter of personal preference or opinion based on a marketing campaign.
The increase in private label is not a trend to be taken lightly, but in my opinion, there is an exceptional amount of power in the brands that might stave off the transition into an entirely private label retail landscape.
Catalysts for private label gains
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