Store brands, also known as private label or private brands, represent a large segment of the food and beverage industry. Chances are, when you step into your local supermarket, you have just as many private label choices as you do national ones. Case in point: think about the shelf space at Trader Joe’s, Kroger, Target (Archer Farms), Wal-Mart (Great Value), Walgreens (Nice!), Costco (Kirkland), and Whole Foods (365). Those private labels are seemingly everywhere, and for good reason: they’re popular. Kirkland products, for example, account for 25% of company sales, and other large retailers have reported that private label accounts for as much as 50% of their business.
What accounts for the big numbers? According to the Hartman Group Ideas in Food, shoppers can no longer distinguish between national and private label brands, and perhaps what’s most interesting: shoppers don’t really care that they don’t know the difference. In fact, a whopping 80% of shoppers believe private label foods are as good as or better than their national brand counterparts.
To a great extent, private labels have been able to gain this foothold and grow their market share by practicing the same tenets to which national brands have pledged allegiance for years. Two of the big trends include:
#1: Distinguish your Brand Position
Nowadays, shoppers don’t buy on brand alone, they buy on attributes such as trustworthiness, ingredient transparency, health, and sustainability – all of which can be effectively conveyed through the package label content. Private labels are doing an excellent job with their package branding of hitting the nexus between low price and high quality, and as a result, shoppers believe they are getting a good deal on a valuable product that meets their needs, not simply getting a cheap product. For example, several retailers have built private label food brands around a position of affordable, healthy eating. Kroger’s Simple Truth, Target’s Simply Balanced, and Aldi’s Simply Nature all convey to consumers the promise of an easy solution to care for themselves and their families. The brands cross many food and beverage categories with reasonably priced, nutritious products that are natural or organic, and free of artificial ingredients – messages which are the cornerstone to their label artwork and content.
#2 Drive Innovation
Large retailers are also doing a great job of transforming the shopping experience. They’re connecting physical and digital experiences with everything from e-commerce platforms to scan-as-you-shop apps. Wal-Mart, for example, has not only merged its in-store and online experiences, but also leveraged digital to promote its private label products – offering price comparisons between their private labels and national brands via an app. They even encourage use of the app in-store by providing a product location map and search option.
Again, one of the key ingredients to success is – you guessed it – the package label content. Consistency and continuity in product content and experience across the multiple touch points that consumers encounter on their purchase journeys can go a long way toward connecting with shoppers, and in this, retailers have first-mover advantage over national brands. Since they’re already investing to improve the in-store shopping experience, it’s easy for them to design their packaging labels with this end game in mind.
To capitalize on current private label success and scale as planned, retailers have to embrace consumers’ immersion in the digital world and meaningfully engage – providing rich and value-added product label content that fosters trust, promotes health, communicates value, encourages sustainability, and engenders product data transparency. You can learn more about how to successfully achieve this objective in our e-book: