The opening half of 2023 saw a decline in volume sales of both private-label and branded goods in the US food and beverage industry. However, data from the Private Label Manufacturers Association (PLMA) reveals that own label’s share of unit sales reached a record high.
According to market researchers Circana, store-brand unit sales experienced a 0.5% decrease during the six months leading up to June 18, while branded unit sales fell by 3.4%. Sales of private-label drinks showed the highest growth at 6% in volume terms, followed by refrigerated and general food, which both rose by 5%. Frozen foods remained stable, the association reported.
Store brands accounted for 20.5% of unit sales, marking a new high, while private-label sales in dollar terms increased by 8.2%. Branded sales also saw growth at 5.1%. The dollar value of store brand sales reached 18.8% of total sales, setting another record.
The beverage category showed the greatest year-on-year increase of 19%, followed by general food and refrigerated products, both at 16%.
Compared to the first six months of 2021, store brand dollar sales rose by 16%, equivalent to approximately $17 billion. Total store brand dollar sales for the first half of this year amounted to $108 billion, with unit sales reaching 26.4 billion.
Peggy Davies, president of the PLMA, attributed consumers’ preference for store brands to the uncertainty of the economy and the rising prices of branded products. She also highlighted the advantage store brands have gained from years of consumer trial.
She stated, “Having chosen a store brand over a national brand for the first time, there is a strong likelihood that the shopper will continue purchasing store brands. Additionally, retailers are capitalizing on the influx of new store brand customers by focusing on product innovation in both food and non-food categories.”
A survey conducted by research firm The Hartman Group revealed that 41% of US grocery shoppers have increased their purchases of private-label brands since 2020, with 30% attributing it to higher grocery prices. Although 55% of consumers buy store brands because they are cheaper, 63% stated that private-label brands offer good value, making them a preferred choice.