Private Label Buyer

Private Label Product Introductions Doubled in 2010

February 8, 2011

Private label food and beverage sales will increase to nearly $113 billion dollars by 2014, according to Packaged Facts’ just-published third edition of “The Future of Food Retailing in the US.” Retail sales of private label foods and beverages grew from more than $65 billion in 2006 to nearly $87 billion in 2009, in grocery, convenience and other outlets, Packaged Facts says.
Almost five percent of all new products in 2010 were for private label, the report says, citing data from Product Launch Analytics, a Datamonitor service. The number of private label food and beverage introductions peaked in 2010 with 3,273 SKUs – more than double those of the previous year and almost three times as many as in 2006.
The top 20 retailers/wholesale grocery cooperatives were responsible for 75 percent of all private label SKUs launched in 2010. Fresh & Easy Neighborhood Market topped the list of retailers launching the most new private label products in 2010, with 264 SKUs, followed closely by Associated Wholesale Grocers (AWG) and ALDI.
The shadow of the Great Recession continues to loom large over the food retailing landscape, the report’s authors say, as consumer behaviors adopted during the economic strife linger, particularly the desire to find value in food and beverage purchases.
“The value focus remains tied to the nation’s economic fortunes. As long as unemployment remains high, the likeliest scenario for the retail industry-and indeed the U.S. economy as a whole-will be slow growth, and value will continue to be a prime motivator behind consumers’ food and beverage purchases,” says Don Montuori, publisher of Packaged Facts.
While price is an important part of the value proposition, it is not the only criterion. Value, defined by consumers as “worth the money,” also encompasses other considerations including quality, perceived benefits such as convenience, nutrition and health and service, according to the report.

Because consumers have reevaluated the price-value equation, food retailers are scrambling to adjust their marketing strategies to survive the growing competition that has erupted in the industry, the authors say. Tweaking private label offerings and experiments with internet marketing and digital technologies, SKU reduction and price wars are emerging retailer trends that could reshape the future of the industry.

Retail sales of foods and beverages in the United States reached $560 billion in 2010, an increase of only two percent over the prior-year-period. Traditional grocery channel generated 57 percent of retail food and beverage dollar sales in 2010, with value channels ringing up 26 percent of sales, convenience channels 14 percent and three percent for alternative channels, including drugstores and vending machines. Leading the retailer pack is Walmart, with an estimated $62 billion in food and beverage sales as of 2010.
Packaged Facts projects that total U.S. retail sales of foods and beverages will advance at an average 5 percent annual pace over the next five years to reach $698 billion in 2015.
The Future of Food Retailing in the U.S., 3rd Edition, offers a comprehensive examination of the overriding trends in the market. Packaged Facts, a division of, publishes market intelligence on a wide range of consumer market topics.