FMI study: Private brands not just about price

More shoppers say they’re buying private-label groceries — pandemic or not — and it’s not just a matter of price, new research from FMI-The Food Industry Association finds.

According to the FMI 2022 Power of Private Brands report, released this week, 40% of consumers have purchased more store brands since before the onset of COVID-19, and three-quarters of those shoppers aim to continue putting private brands in their cart.

Dollars and cents play a big role for many customers when it comes to private labels versus national brands. Of FMI study respondents who purchase private brands, 63% said they consider store brands as a good value, and 55% buy these brands because they cost less.

Though a small fraction of shoppers cite availability as the chief reason they select the store-brand item, a spate of other factors — ranging from quality and taste to specific needs, health and wellness, and sustainability — drive consumer affinity for private labels, FMI’s research revealed.

“While we know price and out-of-stocks have led consumers to try more private brands, we’re seeing these factors aren’t the only reasons shoppers continue to purchase private brand products,” explained Doug Baker, vice president of industry relations at  FMI. “Less than 2% of shoppers say the only reason they purchase private brands is because other products were out of stock. When asked about 14 product attributes, shoppers identified an average of four reasons for choosing private-brand products.”

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Of consumers surveyed, 42% who are buying more private brands report they like the taste of private-label products. And in terms of comparison, shoppers rank the importance of taste for private and national brands equally, both at 78%, according to FMI. Sixty-six percent of customers said quality is key when choosing private-brand item and, in fact, more than 43% indicated they purchase store brands because of their quality.

“When it comes to taste and quality, shoppers clearly see private brands as a good option, on par with national brands,” Baker noted.

Meal planning also tips the scale for some shoppers, as 24% of those purchasing more private brands said these products “meet their meal solution needs” and 23% find their ingredients appealing. Meanwhile, 20% indicated that a private-label product may fit their health needs. Other consumers named convenient or resealable packaging (19%) and “better for the planet” (14%) as sustainability factors nudging them toward private-brand options. Store-brand products that “look interesting” (20%) or are perceived as “innovative or unique” (13%) also win over grocery customers.

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“Clearly, shoppers’ interest in private-brand products extends beyond just price,” Baker stated.