The state of private label
Despite the challenges, overall private label sales are increasing, which is common during periods of inflation. According to IRI’s 2021 report on consumer demand for private labels, from October 2019 to October 2021, the share of private label in total grocery sales fell from 17.5% to 17.3 %, but total sales fell from $828 billion to $963 billion.
While the overall market share of private label as a whole has declined slightly over the period, certain private label categories have experienced significant gains over the past two years. Fastest growing food brand categories include shelf stable breakfast foods (+274% vs 2 AA), ham (+736% vs 2 AA), sports drinks (+182 % compared to 2 AA) and more. The fastest growing inedible categories are hair conditioners (+196% vs. 2 years), baby toys, gifts and furniture (+131% vs. 2 years), and creams external painkillers (+110% vs. 2 years).
In an inflationary 2021, sales of private label products hit a record $199 billion in 2021, according to IRI data provided to the Private Label Manufacturers Association, representing total sales growth by 1% compared to 2020. private label sales increased by 0.7%, followed by general merchandise (+1.7%), health products (+0.2%), frozen products (+0 .8%), fruit and vegetables (+11.4%) and beverages (+2.7%). The growth didn’t stop either when the timeline changed. In January 2022, private label sales increased 4.2% in dollar volume across all U.S. retail channels, compared to the same period in 2021. The increase was roughly equal to the 4.4% growth of national brands, according to IRI data.
“Private label is poised to benefit as we start to see high inflation in consumer packaged goods,” said Krishnakumar “KK” Davey, president of customer engagement at IRI. “The private label has lost market share during the pandemic, but is now seeing improving trends at most retailers. After many years of investment, retailers now have a more developed private label portfolio, with a presence in most categories and multiple price points, which is helping to slow private label growth, but a few retailers are renovating or expanding their offerings and gaining market share.