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Private Label: Up or Down?
OCTOBER 31, 2009 --
A new report from Information Resources, Inc. (IRI) says the private label unit share has grown to 22.8 percent, up 1.2 points in the past 12 months, with the dollar share up 0.7 points to 17.6 percent.
That report is consistent with a Nielsen report in August that private label sales increased 7.4 percent compared to last year, and a report by Mintel, which said private labels saw twice the growth as branded items in 2008, largely due to improved quality and packaging.
“These products offer a very strong value proposition based on quality as well as price,” said IRI Consulting and Innovation president Thom Blischok.
In the grocery channel, store brands hold a 25.6 percent unit share.
However, a report from Citigroup in September contended that U.S. makers of name-brand foods are making gains against store brands. Citigroup said for the four-week period ended Sept. 5, branded food manufacturers gained 20 basis points of dollar market share from private label brands over the same period last year, the first time since late 2006 they have gained share.
Analysts said the share gains resulted from brand manufacturers holding onto price increases initiated when ingredient and energy costs soared last year, even though those costs have now lessened.
“Sales and volume trends for branded food manufacturers have been strengthening, while private label sales and volume trends have lost steam the past several months,” said analyst David Driscoll in the research report.
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