New FMI and IRI Report Reveals Private Brands Make a Big Comeback

Private brand performance within the grocery channel dramatically
increased in the past year, posting annual sales of $138 billion across
multi-outlet plus convenience store retail channels in the United States
in 2017, according to new insights from Food Marketing Institute (FMI)
and IRI®. Still, supermarkets face major competitive
challenges and are experiencing steady own-brand share leakage to other
retail channels.

FMI and its insights provider IRI recently released the first half of a
four-part series in their annual exploration of the Power of Private
Brands — from the business side and from the perspective of the
consumer. The “consumer” study focuses on insights into how to build
engagement, while the “register” report reveals how the grocery industry
can improve its private brand business.

FMI Vice President, Industry Relations, Doug Baker commented on the fact
that 69 percent of consumers said it’s very or somewhat important to
have a good assortment of private brands in food and beverage. He said,
“Private brands have become full-fledged brands in their own right, and
the research emphasizes the importance of not making assumptions when
appealing to demographics and audiences, including how store brands are
marketed and positioned. In fact, Generation X is responsible for 31
percent of all dollars spent on private brands across all outlets,
compared to 19 percent each for older millennials and younger boomers.”

The research outlines consumer demand trends as well as a range of next
steps for retailers, including how to further leverage the consumer’s
desire for variety, and how to increase trial to battle any lingering
negative perceptions. Retailers made considerable progress not only in
reversing sales declines, but in closing the gap with national brands,
supported by a reduced sting from deflation. But the news wasn’t all
positive. Retailers outside of the grocery channel – including mass and
club operators – have been performing much better in private label
brands.

“While the news for private brands overall is good, there is a special
hurdle for food retailers,” said Mark McKeown, principal of Client
Insights for IRI. “We needed to uncover why the biggest growth is taking
place outside the grocery channel. Our first step was examining the
evolution of private brands into tiers and which of these were driving
growth. We then took a closer look at how private brands are performing
in specific categories and departments to address competitive
challenges. And this year, we examined the different groups of private
brands, including lifestyle (products that cross over categories and
departments and deliver a common promise, such as clean label or
organic) compared to regular (retailer banner brands that do not deliver
a common promise) and how consumers perceived and purchased either.”

To download the first half of the four-part series, The Power of
Private Brands, Part I: From the Register and Part II: From the
Consumer, visit www.fmi.org/privatebrands.
FMI and IRI will unveil industry and global trends to round out the
series in fall 2018.

For media:

About FMI

Food Marketing Institute proudly advocates on behalf of the food retail
industry, which employs nearly 5 million workers and represents a
combined annual sales volume of almost $800 billion. FMI member
companies operate nearly 33,000 retail food stores and 12,000
pharmacies. FMI membership includes the entire spectrum of food retail
venues; single owner grocery stores, large multi-store supermarket
chains, pharmacies, online and mixed retail stores. Through programs in
public affairs, food safety, research, education, health and wellness
and industry relations, FMI offers resources and provides valuable
benefits to almost 1,000 food retail and wholesale member companies and
serves 85 international retail member companies. In addition, FMI has
almost 500 associate member companies that provide products and services
to the food retail industry. For more information, visit www.fmi.org and
for information regarding the FMI Foundation, visit www.fmifoundation.org.

About IRI

IRI is a leading provider of big data, predictive analytics and
forward-looking insights that help CPG, OTC health care organizations,
retailers, financial services and media companies grow their businesses.
A confluence of major external events — a change in consumer buying
habits, big data coming into its own, advanced analytics and
personalized consumer activation — is leading to a seismic shift in
drivers of success in all industries. With the largest repository of
purchase, media, social, causal and loyalty data, all integrated on an
on-demand, cloud-based technology platform, IRI is empowering the
personalization revolution, helping to guide its more than 5,000 clients
around the world in their quests to remain relentlessly relevant,
capture market share, connect with consumers, collaborate with key
constituents and deliver market-leading growth. For more information,
visit www.iriworldwide.com.

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