Once considered the poor relation of glossy food and beverage brands, private label has undergone a huge transformation, and is reaping the rewards.
“The global private label market is thriving,” says a spokesperson for market insight firm NIQ.
In fact, a new NIQ report found that 50% of global consumers are buying more private label products than ever before.
And multiple countries exceed that average, including Germany (61%), Spain (58%), India (56%), France (54), and Italy (53%).
“We’ve seen consumers in markets around the world showing a newfound respect for store brands,” says NIQ.
There are also a few notable markets, which fall just short of that average, but are growing and expected to surpass it within the next few years.
These include the United States (48%), Canada (48%), and the United Kingdom (46%).
What’s more, younger generations of shoppers are proving more willing to move over to private label products, and might even prefer them.
Twice as many Millennials (46%) and Gen Z (46%) respondents to NIQ’s Mid-Year Consumer Outlook survey said they’re willing to spend more on private label products, compared with 23% of Boomer respondents who said they wouldn’t.
“Millennial and Gen Z shoppers will have incredible spending power in the years ahead,” says a spokesperson for NIQ. “And they’re already developing product preferences and loyalties.”
How is private label growing so fast?
The primary driver for growth across all markets is undoubtedly price.
Consumers are seeking affordable options as the cost-of-living crisis continues to impact household budgets.
“Consumers are feeling the squeeze,” says Michael Della Penna, chief strategy officer at InMarket.
As a result, they’re more willing to trade brand loyalty for private label. This is particularly true in categories including crisps, snacks, cereals, biscuits, sweets and breads, where there is deemed to be limited differentiation. However, that list could grow as supermarkets continue to expand their own label offerings.
And it’s not just about price. Private label is increasingly winning customers over with quality.
“Over the years, the quality of private label products has improved significantly, resulting in a positive shift in consumer perception,” says Katya Witham, associate director for Mintel Food & Drink.
In fact, Witham says, many consumers now view own label products as comparable, if not superior, to branded goods in terms of q