Food categories show strongest PL growth

The early 2000s saw staggering Private Label (PL) growth rates in many categories, sometimes showing market share gains of 1% per year. Back then, we showed that specific marketing activities (e.g. innovation, advertising, but also distinct packaging) were an effective way to maintain the perceived value and quality gap between National Brands (NBs) and PLs.

How have NBs fared recently in keeping PL at bay? We analyzed the PL share change in some 80 categories across 18 markets between 2015 and 2020:

• On average, PL value share increased just over 1% over 5 years. The growth rate for food was substantially higher (2.5%), while the change in beverages, personal and household care was rather modest. (see Table)
• When distinguishing between different levels of growth, 30% of all categories experienced strong PL growth (i.e., a market share gain of at least 3%) while in 20% of all categories PL share declined strongly (i.e., a negative growth rate of at least -3%).
• Not surprisingly the ratio between PL winners and PL losers is most pronounced in food where 42% of all categories saw PL grow substantially. Only 20% of personal care and 15% of household care categories grew to the same extent.
• PL share movements are no one-way street: 1 in 4 categories in beverages and household care saw NBs gain at least 3% share from PLs, and even in food PLs experienced a s strong share decline in 1 out of 5 categories.

It will be interesting to see how PL fares over the next few months with fears of increasing inflation rates and (hopefully) loosening Covid restrictions.

Data: 1,423 categories in 18 countries, 2015 and 2020.