- RESEARCH & AWARDS
- CATEGORY REVIEWS
U.S. Private Label Growth Misleading
The analysis, presented June 4 at Nielsen’s Consumer 360 Conference in
However, unit sales were down slightly during the same timeframe, Nielsen said, indicating that higher unit pricing is the main growth driver in the private label arena.
“When private label dollar share started to spike, it appeared that shoppers were shifting to store brands in order to save money,” said Tom Pirovano, director of Industry Insights at The Nielsen Co. “That’s always been the conventional wisdom during economic downturns.
“Digging beyond the numbers, however, it’s clear that private label unit share is essentially flat,” he added. “Higher prices in commodity categories like eggs, milk and cheese are driving private label dollars, not consumers deserting traditional brands.”
Top-selling private label items, Nielsen said, tend to be products with limited profit margins that are most impacted by an increase in shipping or raw materials. Top-selling food items include eggs, milk and cheese, while best-selling non-food items include aluminum foil, paper towels, paper plates and toilet paper.
Nielsen added that the popularity of private label products varies throughout the country. The
“As prices continue to rise, private label products can be leveraged by retailers to entice consumers into the store and increase sales,” Pirovano said. “Knowing what your consumers want is essential for developing your private label strategy.
“Do your customers want to save money with in-store brands? Are your customers willing to buy higher-end and more expensive private label products? In a challenging economy, private label products can serve as ‘destination’ products that truly differentiate your store from competitors,” he added. PLB
The Lollipop Tree Expands Manufacturing Capabilities
“[The expansion] has been great for us; now we have the room to spread out,” said Bob Lynch, president of The Lollipop Tree. “When we first started [27 years ago], all items were being made in the family garage.”
Lynch said the expansion doubles the company’s cooking capacity for its wet products. In addition, two new production lines have helped to quadruple the company’s output of dry mix products.
Lynch also said the company is dedicating more of its efforts to organic products. The Lollipop Tree’s specialty baking mixes contain a minimum of 70 percent organic ingredients and are certified organic by Quality Assurance International.
Although Lollipop Tree’s product lineup is impressive, it’s the company’s ability to customize and create recipes that’s enabled it to succeed and grow.“Our niche in the marketplace is catering to each of our customers by helping them develop an exclusive product specific to their needs,” Lynch adds. “Premium specialty products, coupled with terrific customer service, [have] been the cornerstones of our business for more than 27 years.” - L. Seidler
Is ‘Green' Slowing?
The researchers tracked consumer perceptions of “green” in the
“This year’s results are somewhat alarming in that they indicate consumers only prioritize the environment when all other concerns are equal,” said Russ Meyer, chief strategy officer of Landor Associates. “With agricultural commodities running low and the rising cost of gas in the
For example, only 38 percent of consumers in this year’s study said they include packaging criteria in their purchase decisions, the researchers said, despite the fact that 95 percent of these consumers believe too much packaging is used on consumer goods.
Although strains on the economy have pushed the pause button on green, the study found that consumers still have a desire to make environmentally conscious purchases. But consumers still view baseline activities such as recycling to be the most powerful contribution to environmental improvement, the researchers said.“The results of the 2008 survey suggest that, despite conversations about eco-overload, sustainability is in a nascent stage, especially in the minds of consumers,” said Annie Longsworth, president of Cohn & Wolfe San Francisco. “It will take a unified effort and excellent comm unication among government, corporations, NGOs and consumers to ensure environmental concerns remain at the top of the agenda.” PLB
PL Buyer Poll Results
PL Buyer was curious to know what efforts the private label industry is making to connect with customers by way of in-store promotions. So we put a call out for feedback.
The results?Some of you - 12.5 percent - said you were developing advertising vehicles to meet the needs of different types of shoppers and categories within your private label program. But more of you - 37.5 percent - said you were not. Even more of you - 50 percent - said these activities do not apply to your operations. PLB
According to the May Competitive Edge newsletter from Barrington, Ill.-based Willard Bishop, manufacturers view health and wellness as going mainstream, and “are racing to develop new products with health and wellness in mind.”
What’s more, some retailers are going beyond the addition of nutrition experts and healthful products.
Skokie, Ill.-based Topco Associates is gearing up for the launch of its Overall Nutritional Quality Index (ONQI) this year, in partnership with
And Salisbury, N.C.-based Bloom - a Food Lion LLC subsidiary of the Delhaize Group, Brussels, Belgium - announced the official launch of the Guiding Stars Nutrition Navigation Program in June. Developed by an independent scientific advisory panel of experts, Guiding Stars uses a specific algorithm to label food items based on their nutritional content. The number of stars shown on a product’s shelf tag - one, two or three - represents the nutritional value of the food item, the company said, with three stars indicating the most nutritious choice.Scarborough, Maine-based Hannaford Bros., another Delhaize Group company, inaugurated the Guiding Stars program in 2006. PLB