Retailers report having strong goals over the next two years for their private brand portfolio, with a current average dollar share of 18.2% and an ambitious goal of 22.6% in the next two years, according to a new report from The Food Industry Association (FMI).
Here's 3 ways retailers and grocers can be driving private brand growth, according to FMI:
- Innovation: Eighty-one percent of food retailers and manufacturers surveyed report innovation as the top strategy for achieving higher private brands market share. Specifically, industry respondents see potential for private brands premium products (69%), product options with simple ingredient lists (60%), products offering strong price/value in a category (56%), and prepared meal solutions (42%)
- Optimizing price / availability via suppliers: Food retailers and manufacturers surveyed report a wide range of strategies to accelerate private brands growth. The majority (71%) plan on working with suppliers to optimize price and availability, which aligns with consumers mostly choosing private brands because of lower costs, deals or perception of good value. Other top acceleration strategies mentioned include improving consumer insights and trends intelligence (64%), launching new products (64%) and improving packaging (58%)
- Boosting ecommerce: Currently, retailers report 60% of their private brands assortment is available on their ecommerce platform, so expanding availability is a key strategy for growth. Retailers and suppliers mentioned several other improvements for private brands ecommerce such as search functionality prioritizing private brands offerings (80%), providing compelling product images (73%), tagging attributes in search, such as health and well-being and sustainability (65%) and utilizing suggestive selling in search results (53%)
“As the food industry looks toward the future for private brands, they are setting bold targets based on high demand from consumers,” FMI’s vice president of Industry Relations Doug Baker said in a statement. “To reach these goals, retailers and manufactures are looking at several tactics including private brands outside the U.S. that have higher shares for approaches to growth, including innovation, strategies to accelerate growth and enhanced ecommerce availability for private brands.”