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A SymphonyIRI Group Webinar today, “Times & Trends: Reversal of Fortune,” took a further look into its findings that although private label dollar share continued to rise in 2012, unit share fell 0.2 percent.
Susan Viamari, editor of Times & Trend, led the Webinar. Viamari explained that as private label unit share of CPG products slipped to 17.1 percent (down from 17.4 percent in 2010), national brands were gaining volume share in 40 of the 100 largest CPG categories. Private label share of CPG dollar sales increased slightly during the past year, but unit sales slipped for the second consecutive year.
Although overall penetration is 99 percent for private label, not everyone buys private label in every category every time. The goal, Viamari said, was not to win new private label buyers. Rather, retailers should be shooting to get current private label shoppers to buy more private labels in more categories.
In the 2006-09 time frame, among the top categories where private label gained share included cold/allergy sinus tablets, refrigerated salad/coleslaw, and internal analgestics.
Where private label share is below average, but on the rise, the so-called “up-and-coming” categories, the largest jump comes from the snack aisle. A total of 57 percent of consumers say they switch tolabel snacks when their budgets are tight, a separate SymphonyIRI report found. Bakery snacks were the big winner for private label, up a 2.5 point change in penetration among category buyers and up nearly 5 percent in share since 2010.
Viamari gave a nod to Walgreens’s heavy promotion of Nice! brand snacks as Gameday Favorites.
“These kinds of promotions are working,” Viamari said.
Private label merchandising support has declined more quickly versus industry average during the last few years, and lift is down sharply during the same timeframe, she said.
“Certainly this is not unique to private label, national brands are struggling too,” Viamari said.
However, “private label and national brand marketers have to find a way to coexist,” Viamari stressed. “Success is going to come to those who find a way to coexist.”
As she explains, it is up to manufacturers to find a way to find a way to tie in private label brands with national brands in a way that meets the needs of the consumers.
“The one-size-fits-all strategy is a thing of the past,” Viamari said.
Going forward, retailers need to expand private brand offerings in a way that supports their broader overall branding story. Retailers should also tailor private label offerings at the marketing level and carefully manage private label pricing programs to maintain an optimal price gap between brands.