Private Label Goods

As private label companies continue to introduce better-for-you products and more attractive packaging, they have experienced sales growth in recent years that aren’t likely to decrease in the near future.

Private-label grocery brands have come a long way since their modest beginnings in the late 1970s. Along the way, private-label brands appeared to have shed much of their budget stigma. According to a recently released Nielson report, cash-strapped families looking to cut their food costs have been increasingly avoiding well-known brands for their slightly cheaper counterparts. Private-label brands accounted for 17.4% of the total U.S. dollar share of food products last year, up from 15.2% in 2006, Nielsen says.

More than two-thirds of those who participated in Nielsen's U.S. survey said they thought private-label goods had the same or better quality than name brands. And just 10% said such products weren't suitable when quality matters, although 17% indicated that private-label brands have cheap-looking packaging. The few packaging and quality concerns are unlikely to discourage customers in the future. More than 9 in 10 Americans surveyed by Nielsen said they would continue buying private-label brands regardless of the economy.

The economy in the last few years has decidedly boosted private-label purchases, but the rise in the popularity of store brands actually began back in the early 2000s when the economy was very strong. Store-brand products, which make up a $90 billion industry in the US, now account for almost 30% of the total servings of food products sold.