Welcome to SN Off the Shelf, a podcast series from Supermarket News.
In this twice-monthly feature, SN editors talk with industry executives, experts and other grocery players about the news, trends and issues that matter most to retailers and their business partners.
At the Private Label Manufacturers Association’s 2019 Private Label Trade Show, Supermarket News got a chance to talk with longtime PLMA President Brian Sharoff, who has led the 40-year-old organization since 1981.
During that time, membership for New York-based PLMA has grown to more than 4,400 manufacturers globally, ranging from multinational companies to small and midsize firms. This year’s PLMA show featured exhibitors from 50-plus countries — including an 8,000-square-foot display space from Italy — and over 2,500 exhibit booths, showcasing growing private-label categories such as wine and new segments like plant-based foods and CBD products.
Attesting to the size of the event is the steady growth of private brands. Last year, across all retail outlets, private-label food and nonfood consumables rose 4.4% in dollar sales and 3.1% in unit sales. Meanwhile, national brands lost both dollar and unit share. Also of note, during 2018, the mass retail channel edged past supermarkets for the first time in annual private-label dollar sales volume in food and nonfood consumables.
What’s behind those trends? Sharoff said a good explanation came at the PLMA show from AllianceBernstein senior analyst Ali Dibadj in a session titled “How Retailers Are Building Billion-Dollar Brands.”
“He cited two very important reasons,” Sharoff said. “One is that retailers are now less dependent on national brands for new products, research, marketing push, television advertising, etc. So the things that helped make national brands strong for 20-30 years are no longer factors in the marketplace. The second point he made was that retailers who want to do this [private label] now have a clear-cut path in terms of packaging, product concept, ingredients, etc. And most important, he feels they have a better understanding of what consumers — their shoppers — want. So they’re in a better position to be able to provide products that consumers are looking for. The result is that you’re going to have growth in private label and a lack of growth in national brands.”