Private Label Buyer
PLBuyer Index

PLBuyer Index: Spotlight on Frozen

Frozen category private label merchandise has been doing extremely well on the PLBuyer Index—one of the best categories in terms of overall performance.

September 12, 2013
PLBuyer Index Sept 2013

In the dog days of summer, it seems only fair to take a closer look at performance of private label merchandise in the Frozen category.

Frozen, as measured for the PLBuyer Index, consists of a wide range of products: fruits and vegetables, including prepared vegetables; meat, including entrées; appetizers/snacks; pizzas; pot pies; poultry; and seafood. Frozen also encompasses desserts, baby food, bread, breakfast foods, cookies, novelties, side dishes, juice, ice cream, etc.

Since we began tracking the PLBuyer Index in February, Frozen category private label merchandise has been doing extremely well—one of the best categories in terms of overall performance. The 52-week rolling index has improved steadily from 115.6 in the period ending February 24, 2013, up to 121.8 in the current period ending July 14, 2013; a score of 100.0 on the Index indicates flat performance.

Frozen’s private label success has come from a combination of factors. Frozen private label prices are at near-parity to national brands. The only categories that do better in this area are Deli and Dairy. In Frozen, private label brands’ average prices were only 1.1% lower than national brands during the 52-week period ending in July, and that was an improvement over the 2.2% lower prices that private label commanded in the prior-year period.

Unit sales seem unaffected by these price increases, holding steady vs. the year period even as prices increased at almost twice the rate of national brands. The net result is that in the 52-week period ending in July, private label increased its revenue by 3.8% over the prior-year period, while national brands managed only a 1.0% increase.

However, the four-week data shows that from mid-June to mid-July, the party came to an abrupt end. The four-week private label index fell from 126.2 in June to 99.0 in July, barely keeping up with last year’s private label share of revenue. What happened?

In the four-week period ending in July 2013, private label frozen merchandise appeared to go against the grain, raising prices to the point where they averaged 1.3% higher than national brands. During the same period in 2012, private label prices were at parity to national brands. The end result was that private label’s share of unit sales fell to the point where private label revenue was unable to make any gains on the year-prior period.

Private label frozen merchandise has made strong inroads against national brands. Since we started tracking the Index in February, both share of units and price differential in sequential four-week periods have improved over the prior-year period, with the exceptions coming in the last two four-week periods.

Given that share of units fell after the last period of private label price increases, it appears that private label brands may have reached the upper limit of the price differential that they are able to maintain over national brands.

However, one data point rarely makes a trend. The trend to watch for in the coming months in the frozen category is simple: Will private label brands continue to raise prices? And will consumers reward those price increases with loyalty—or will they suddenly find national brands more attractive in the freezer section?

This is a critical question for private label, particularly when Frozen is one of few categories to currently enjoy a private label price premium. As retailers continue to improve private label brand quality and introduce premium offerings, consumer reaction to private label brands as a premium-price offering may well shape retailers’ brand strategies in all the other categories.


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