The analysis, presented June 4 at Nielsen’s Consumer 360 Conference in Phoenix, found that private label sales of consumer packaged goods (CPG) products grew almost 9 percent in supermarkets during the 52 weeks ending April 19, 2008, reaching $50 billion in dollar sales and accounting for a 17.5 percent share of supermarket dollar sales. In the combined supermarket, mass merchandise and drug store arena, private label sales rose 9.1 percent, accounting for $77 billion in dollar sales and a 15.9 percent share of stores’ dollar sales.

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 San Antonio market, for example, has the highest private label share of store, at 25.6 percent, while New York enjoys only a slightly more-than 10 percent share of store. Meanwhile, Nielsen said the strongest growth opportunities can be found in the organic and natural food categories, health and wellness products and in products customized for store customers’ wants and needs.

“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 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.

The researchers tracked consumer perceptions of “green” in the United States and Britain for more than three years. This year’s findings suggest that consumers are placing the environment a bit lower on their priority lists.

“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 United States, Americans indicate they have more immediate concerns than the environment. With the United Kingdom also beginning to feel the economic crunch, we are seeing some signs of the mentality there beginning to shift.”

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.

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?

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 Yale University – Griffin Hospital Prevention Research Center. Topco said ONQI will provide grocery retailers with a food scoring system - developed by a group of top nutrition scientists from throughout North America - that allows shoppers to make a quick comparison of foods on the basis of overall nutritional quality.

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.