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Rabobank: Store Brands to Hold 30% Share

NEW YORK Corporate brands are on track to achieve penetration on par with Europe during the next decade, with share growing from less than 20% in the U.S. to 25% to 30%, forecasts Rabobank’s Food and Agribusiness Research Group.

Retailer brands have grown 6% over the past five years, which Rabobank attributes to innovation and investment of brand management by retailers; consumer perception of value; and retail consolidation increasing store-brand penetration and power. During the same time period, national-brand packaged foods were up just 2%.

“On grocery shelves around the U.S., from convenience stores to upscale supermarkets, retail brands now compete successfully and often win against national brands, earning consumer trust in terms of pricing, quality, image and value,” said Nicholas Fereday, Rabobank analyst and author of the report, in a press release.

Read more: Consumer Reports Taste-Tests Private Labels, National Brands

National brands can more effectively compete by creating radical new products, and diversifying into business-to-business manufacturing for other brands and foodservice channels.

“Many national-brand owners need to be bolder in their thinking and strategizing," advised Fereday. "Instead of opting for low cost, low risk, conservative solutions, they need to think and act more like the Apples of the world, innovating new game-changing food products and entering new categories. Alternatively, national brand owners should consider downsizing brand-building efforts and diversifying their manufacturing into B2B activities."

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