PLMA’s Sharoff Opens Up About Private Label
“Star Power: The Growing Influence of Store Brands in the U.S.” is the title of a new report that details findings from the recent Private Label Manufacturers Association consumer research study. And, indeed, according to the research, private label products are moving from supporting to starring roles for a growing number of grocery shoppers.
The study found that a record 41 percent of those surveyed now identify themselves as frequent purchasers of store brand products. This contrasts with five years ago when just 36 percent of consumers polled said they bought store brand products frequently.
Here’s what PLMA President Brian Sharoff had to say about the study.
Confectioner: Findings from the PLMA study show that there’s been dramatic growth in the frequency of private label purchases over the past five years. What other big changes are you seeing in the private label universe?
Sharoff: One of the changes that the report suggests is that the popularity of private label in grocery chains is having a halo effect on the acceptance of private label in other formats — like the office supply stores or convenience stores or almost any other type of retail format.
Confectioner: Anything else?
Sharoff: The survey really demonstrates the growing change in the retail business. There is a growing shift away from weekly shopping. [According to the survey, only 64 percent of those polled said they shop weekly or more often.]
Ten years ago, you could describe the retail business as supermarkets, drug stores and mass merchandisers. The survey makes it clear that that [retail environment] doesn’t exist any more. What exist today are mega-retailers, which are national in scope and carry everything A to Z. Then you have lots and lots of smaller retailers that are format-driven. In this environment, what the report is showing is that people are spending less time doing traditional shopping in the supermarket.
Confectioner: Why do you think that private label hasn’t been more of a factor in the confections category?
Sharoff: Compared to other categories, obviously private label’s penetration is much different. Whether it’s a Snickers or Hershey bar, private label obviously doesn’t need to compete on a chocolate bar by chocolate bar basis. But I think what you’re starting to see is that some of the large warehouse stores are doing co-branding [in confections] and others are starting to provide [private label confections in] bulk sizes. Also, I think we’re going to see greater penetration as mega-retailers create their own fantasy brands in categories like chocolate.
Confectioner:To what do you attribute consumers’ increasingly frequent purchases of private label products?
Sharoff: I think the growth is based on two factors. One is availability. More retailers have more products available in more categories than ever before as store brands. And No. 2, more retailers are promoting their store brands than ever before.
Confectioner: Some private label vendors say retailers’ expectations for packaging and display shippers for private label have increased. Have you observed that?
Sharoff: The retailer is certainly going to take advantage of the popularity of store brands by giving them a better position and passing some of the cost along to the manufacturer. It’s always been the case that the manufacturer pays for that. With success comes greater responsibility (read, cost), but I think within the past five to six years we’re seeing more and more of that. If you want to play in the big league, you’ve got to wear the uniform.
Private Label’s Popularity:Survey Highlights
15% Of PLMA survey participants intend to buy more private label products in the coming year
16% Of consumers in the highest income level (over $75,000) said they intend to increase their purchase of store brands in the year ahead; 21 percent in the middle income range ($30,000 - $75,000) said they intend to do so; only 10 percent of the lowest income respondents (under $30,000) indicated plans for increased private label purchases
78% Of those surveyed say that value for the money is a leading reason for their private label purchases
Private Label Parallels from across the Pond
One of the aspects of the consumer research study that most intrigued the PLMA team was the way in which the U.S. private label market has come to mirror the one in Great Britain, long considered the strongest national market for store brands. That is clear when comparing findings in the recent U.S. study with similar research conducted for PLMA in Great Britain.
In both the United States and Britain, 41 percent of consumers reported that they purchase store brand products “frequently.” In the United States, the percentage of consumers who say they regularly fill their shopping carts with one-quarter or more of store brands is 47 percent; in Britain, it was just slightly lower at 42 percent.