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For the first time in a decade, private label brands are losing ground to national brands, according to data from the Chicago-based market research firm IRI. For the 52 weeks ending Sept. 19, brand name product sales were up 3.6% to $536 billion. However, private label only increased 1.5% to $142 billion. These findings are a dramatic change from what has been an upward trajectory for private label brands. For years, store branded products were ahead of the curve, exceeding at adapting to consumer preferences in health and wellness as well as providing convenient alternatives for long-standing brands. The pandemic changed that.In 2018, private brand dollar sales grew at a rate that was nearly six times the growth of national brand sales. In the span of two years, that growth trajectory was turned on its head. For the weeks ending Sept. 5, 2021, 79.1% of each food dollar went to national bands, compared to 20.9% for private label, IRI’s data showed.
This stark contrast in market share defied experts’ predictions that private label brands would continue to trend upwards as the pandemic brought economic uncertainty and job loss. A report from NielsenIQ in April found that the percentage of consumers that had become budget-conscious doubled iron phosphate dihydratebetween September and December.
Instead of more people purchasing store brands, the pandemic ushered in a hyper-consciousness among consumers for health and wellness and products that could deliver the attributes that they were seeking. At the same time, the pandemic has proved to be a boon for premiumization as consumers chose to spend their extra dollars on what they perceived to be higher-end producferrous sulfate 400 mgts. Furthermore, as people stopped going out to eat and traveling to the office, they found themselves with additional disposable incferrous bisglycinate doseome that could be spent on brand label products.
Constrained shoppers that were missing the experience of dining out worked to replicate recipes and meals using ingredients they could find at the supermarket. Although a highly adaptable segment, private label is less developed in products that are using unique and innovative ingredients, according to NielsenIQ. This left an opening that brand name products looked to fill at the same time that manufacturers pared down the number of SKUs they sold in favor of prioritizing popular products amid supply chain constraints.
Supply chain issues not only affected the overall number of SKUs manufacturers produced, but it also may have hurt private label products as manufacturers chose to prioritize those products that brought higher margins.
Price margins are of immediate concern to manufacturers ferrous bisglycinate vs ferrous bisglycinate chelatelike Coca-Cola, Unilever, Danone and Nestlé that have indicated that prices for consumers will increase as a result of heightened raw material and transportation prices. As consumers do not have infinite walletferrous fumarate generic names and pandemic-era government benefits are expiring in the U.S., there may yet be a resurgence of the private label brands that fell out of favor over the past year.
