- Baby Non-Food Products
- Baking/Cooking Staples
- Household Products
- Kitchen Products
- Paper Products
- Personal Care
- Pet Products
- RESEARCH & AWARDS
According to an article in the Oct. 14 issue of the group's online newsletter, HartBeat, national brands are "heavily favored" in categories in which consumers can easily distinguish differences in product and brand heritage, including laundry detergent, cereal, carbonated soft drinks, diapers and personal care products.
However, it added that the “most heated battles between private label and national brand manufacturers” will occur in two distinct areas: commodity-like categories and emergent categories. Commodity-type categories are those in which consumers find it difficult to distinguish between brands because quality varies so little.
According to Michelle Barry, Ph.D., Hartman Group senior vice president, the only differentiator in categories such as spices, baking ingredients, over-the-counter drugs and bottled water is the package or the brand.
“And for many consumers, that’s no longer compelling enough to warrant spending the extra money,” she said.
Although many retailers have already taken full advantage of private label opportunities in commodity-type categories, few have fully explored the possibilities offered by emergent categories, many of which are so new that no brand has an advantage over another.
"Because there isn't any brand loyalty to contend with," Barry told PL Buyer, "product quality is the reason consumers try and ultimately adopt [products in emerging categories]," giving private label the same opportunity as any other brand to win the consumer's business.
Although retailers might be reluctant to enter still-developing segments without a clear national brand "target," the Hartman Group said emergent categories offer some of the best potential for private label growth, making them the likely sites of some of the "fiercest battles" for market share.
Emerging categories include segments such as specialty water, ethnic foods, specialty cookies and snacks, unique cheeses, "green" personal care and household products, and natural and organic foods.
"Most of these categories have no brand analogues that consumers can associate with their childhood," the article said, "and loyalty steeped in habit has yet to be firmly established.
"Retailers are often able to enter these niches before legacy brands," the article continued. "Thus, we believe that the private label success stories of the tomorrow will be found in those retailers who are able to stage the most compelling experiences in food retailing."
To read the article in its entirety, go to http://www.hartman-group/hartbeat. For more information about the Hartman Group's new report, “Private Label 2010: Redefining the Meaning of Brand,” e-mail Blaine Becker at firstname.lastname@example.org. - Denise Leathers