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Attitudes toward Private Label - US - November 2014

“Despite the substantial advances store brands have made in terms of quality, Mintel’s consumer research reveals that more than four in 10 consumers still perceive store brands to be inferior to national brands. Store brands must do a better job of distinguishing between their value and premium tiers to attract the right customers to the right products: those looking for inexpensive food items and those looking for higher quality products at affordable prices.”
– Amy Kraushaar, US Category Manager, Food & Drink and Foodservice

This report answers the following questions:

  • How can private label overcome some lingering perceptions of lower quality?
  • What will make store brands resonate better with Millennials?
  • Hispanics are heavy private label users; can penetration increase?

Private label food and beverage sales grew slowly from 2011-14, reaching $16.9 billion, and are forecast to reach $18.1 billion by 2019. Mintel’s research shows store brands have high usage and are viewed mostly positively. Over 60% agree store brands are as good as national brands and over half agree the store brands they buy are household essentials. Thus, continued retailer investment in store brands can be a competitive advantage that provides higher-margin profit than national brands. Retailers should focus on those most likely to buy store brands: Hispanics, Millennials, and households with children. Healthy and premium lines, and unique flavors and product types, will grow sales.

This report builds on the analysis presented in Mintel’s "The Private Label Food Consumer – US, November 2013."

According to the PLMA (Private Label Manufacturers Association), private label products encompass all merchandise sold under a retail store’s private label. That label can be the store’s own name or a name created exclusively by that store.

This report includes private label sales and market share data in five food departments as defined by SymphonyIRI:

  • Shelf-stable
  • Dairy/refrigerated
  • Frozen
  • Bakery
  • Deli

This also includes the following eight beverage categories:

  • Milk, non-dairy drinks, and yogurt drinks
  • Tea and coffee
  • Juice and juice drinks
  • Sports, nutritional, and performance drinks
  • Alcoholic beverages
  • Carbonated beverages (soda) and energy drinks
  • Water
  • Baby (electrolytes, baby juice)

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                • Executive Summary

                    • Slow growth forecast
                      • Figure 1: MULO sales and forecast of private label food and beverages, at current prices, 2009-19
                    • Key players
                      • Figure 2: Store brand food and beverage purchases in the past month, September 2014
                    • The consumer
                      • Significant likelihood to buy store brand staple food and beverage items
                        • Figure 3: Types of store brand food and beverage purchases in the last month, September 2014
                      • Value drives sales most; 40% say store brands are as good as national brands
                        • Figure 4: Reasons for buying store brand food and beverages, September 2014
                      • More than three quarters say value makes them more likely to buy
                          • Figure 5: Factors influencing more store brand food and beverage purchases (any rank), September 2014
                        • More than six in 10 agree that store brands taste just as good as national brands
                          • Figure 6: Attitudes toward store brand and national brand food and beverages – private label quality (any agree), September 2014
                        • More than half agree that buying store brands makes them feel smart
                          • Figure 7: Attitudes toward store brand and national brand food and beverages – perceptions (any agree), September 2014
                        • What we think
                        • Issues and Insights

                            • How can private label overcome some lingering perceptions of lower quality?
                              • The facts
                                • Insight: Better differentiation between value and premium tiers
                                  • What will make store brands resonate better with Millennials?
                                    • The facts
                                      • Insight: Offer unique products, employ brand stories in marketing
                                        • Hispanics are heavy private label users; can penetration increase?
                                          • The facts
                                            • Insight: Targeted products that resonate with Hispanic shoppers
                                            • Trend Application

                                                • Trend: Prove It
                                                  • Trend: Locavore
                                                    • Trend: Survival Skills
                                                    • Market Size and Forecast

                                                      • Key points
                                                        • Sales and forecast of private label food and beverages
                                                          • Figure 8: MULO sales and forecast of private label food and beverages, at current prices, 2009-19
                                                          • Figure 9: MULO sales and forecast of private label food and beverages, at inflation-adjusted prices, 2009-19
                                                        • Fan chart forecast
                                                          • Figure 10: MULO sales and forecast of private label food and beverages, at current prices, 2009-19
                                                        • Fan chart methodology
                                                        • Market Drivers

                                                          • Key points
                                                            • Value remains key sales driver
                                                              • Figure 11: Reasons for buying store brand food and beverages, September 2014
                                                            • Economic factors
                                                              • Figure 12: University of Michigan’s Index of Consumer Sentiment (ICS), 2004-14
                                                              • Figure 13: US Unemployment rate, 2004-14
                                                            • Improved quality of store brands attracts buyers
                                                              • Figure 14: Reasons for buying store brand food and beverages, by household income, September 2014
                                                            • Millennials represent an important demographic for store brands
                                                              • Figure 15: Any Likelihood of purchasing store brand food and beverages, by generations, September 2014
                                                            • Hispanics report highest likelihood to buy a range of store brands
                                                              • Figure 16: Store brand food and beverage purchases in the past month, by race/Hispanic origin, September 2014
                                                            • Hispanic population set to increase 11.9% between 2014 and 2019
                                                              • Figure 17: Population, by race and Hispanic origin, 2009-19
                                                            • Presence of children means higher likelihood to buy store brands
                                                              • Figure 18: Store brand food and beverage purchases in the past month, by presence of children in household, September 2014
                                                            • Percentage of households with children declines
                                                              • Figure 19: Households, by presence of own children, 2003-13
                                                          • Competitive Context

                                                            • National brands maintain a majority of MULO sales
                                                                • Figure 20: Total and private label MULO food/beverage sales, and private label share of total, at current prices, 2009-14
                                                              • Store brand share of MULO food sales remains at 18% between 2011 and 2014
                                                                • Figure 21: Total and private label MULO food sales, and private label share of total, at current prices, 2009-14
                                                              • Store brand share of MULO beverage sales declines slightly between 2011 and 2014
                                                                • Figure 22: Total and private label MULO beverage sales, and private label share of total, at current prices, 2009-14
                                                            • Segment Performance

                                                              • Key points
                                                                • Private label food sales account for 77% share
                                                                  • MULO sales of private label food and beverages, by segment
                                                                    • Figure 23: MULO sales and forecast of private label food and beverages, by segment, 2012 and 2014
                                                                  • MULO sales and forecast of private label food
                                                                      • Figure 24: MULO sales and forecast of private label food, at current prices, 2009-19
                                                                    • MULO sales and forecast of private label beverages
                                                                        • Figure 25: MULO sales and forecast of private label beverages, at current prices, 2009-19
                                                                    • Retail Channels

                                                                      • Key points
                                                                        • Supermarkets dominate but drug stores exhibit most growth
                                                                          • MULO sales of private label food and beverages, by channel
                                                                            • Figure 26: MULO sales of private label food and beverages, by retail channel, at current prices, 2009-14
                                                                            • Figure 27: MULO supermarket sales of private label food and beverages, at current prices, 2009-14
                                                                            • Figure 28: MULO drug store sales of private label food and beverages, at current prices, 2009-14
                                                                            • Figure 29: Other MULO sales of private label food and beverages, at current prices, 2009-14
                                                                        • Innovations and Innovators

                                                                          • Helping consumers eat better
                                                                            • New flavor ranges cater to expanding consumer palates
                                                                              • Premium/gourmet quality
                                                                              • The Consumer – Store Brand Food and Beverage Purchases

                                                                                • Key points
                                                                                  • Most bought private label at Walmart
                                                                                      • Figure 30: Store brand food and beverage purchases in the past month, by age, September 2014
                                                                                    • $25K-74.9K most apt to buy at Walmart
                                                                                        • Figure 31: Store brand food and beverage purchases in the past month, by household income, September 2014
                                                                                      • Millennials most apt to buy at mass, budget supermarkets
                                                                                          • Figure 32: Store brand food and beverage purchases in the past month, by generations, September 2014
                                                                                        • Least educated most apt to buy Walmart store brands
                                                                                            • Figure 33: Store brand food and beverage purchases in the past month, by education level, September 2014
                                                                                        • The Consumer – Types of Food and Beverage Store Brands Purchased

                                                                                          • Key points
                                                                                            • Respondents most apt to buy store brand milk, cheese, bottled water
                                                                                                • Figure 34: Types of store brand food and beverage purchases in the last month, by age, September 2014
                                                                                              • Hispanics report most likelihood to buy a range of store brand products
                                                                                                • Figure 35: Types of store brand food and beverage purchases in the last month, by race/Hispanic origin, September 2014
                                                                                              • Households with children most likely to buy a range of store brand items
                                                                                                • Figure 36: Types of store brand food and beverage purchases in the last month, by presence of children in household, September 2014
                                                                                              • Millennials report buying a number of store brand food/beverages
                                                                                                  • Figure 37: Types of store brand food and beverage purchases in the last month, by generations, September 2014
                                                                                              • The Consumer – Likelihood of Purchasing Store Brand Food and Beverages

                                                                                                • Key points
                                                                                                  • High likelihood to buy a number of other store brand food and beverages
                                                                                                      • Figure 38: Likelihood of purchasing store brand food and beverages, September 2014
                                                                                                    • Hispanics very likely to be open to buying a range of other store brands
                                                                                                      • Figure 39: Any Likelihood of purchasing store brand food and beverages, by race/Hispanic origin, September 2014
                                                                                                    • Households with children represent important group for store brands
                                                                                                      • Figure 40: Any Likelihood of purchasing store brand food and beverages, by presence of children in household, September 2014
                                                                                                  • The Consumer – Reasons for Buying Store Brand Food and Beverages

                                                                                                    • Key points
                                                                                                      • Value, quality are the leading motivators for buying store brands
                                                                                                          • Figure 41: Reasons for buying store brand food and beverages, by age, September 2014
                                                                                                        • Boomers, Swing Generation cite value, quality as reasons to buy
                                                                                                          • Figure 42: Reasons for buying store brand food and beverages, by generations, September 2014
                                                                                                      • The Consumer – Factors Influencing More Store Brand Food and Beverage Purchases

                                                                                                        • Key points
                                                                                                          • Value remains key factor in store brand purchase likelihood
                                                                                                              • Figure 43: Factors influencing more store brand food and beverage purchases, September 2014
                                                                                                          • The Consumer – Attitudes toward Store Brand and National Brand Food and Beverages

                                                                                                            • Key points
                                                                                                              • Store brand taste perceived as equal to brand name for nearly two thirds
                                                                                                                  • Figure 44: Attitudes toward store brand and national brand food and beverages, September 2014
                                                                                                                • Demographics report different motivations to buy
                                                                                                                    • Figure 45: Agreement with attitudes toward store brand and national brand food and beverages (any agree), by generations, September 2014
                                                                                                                    • Figure 46: Agreement with attitudes toward store brand and national brand food and beverages (any agree), by race/Hispanic origin, September 2014
                                                                                                                    • Figure 47: Agreement with attitudes toward store brand and national brand food and beverages (any agree), by presence of children in household, September 2014
                                                                                                                • Appendix – Other Useful Consumer Tables

                                                                                                                  • Store brand food and beverage purchases
                                                                                                                    • Figure 48: Store brand food and beverage purchases in the past month, by gender, September 2014
                                                                                                                    • Figure 49: Store brand food and beverage purchases in the past month, by types of store brand food and beverage purchases in the last month, September 2014
                                                                                                                    • Figure 50: Store brand food and beverage purchases in the past month, by types of store brand food and beverage purchases in the last month, September 2014
                                                                                                                    • Figure 51: Store brand food and beverage purchases in the past month, by any likelihood of purchasing store brand food and beverages, September 2014
                                                                                                                    • Figure 52: Store brand food and beverage purchases in the past month, by any likelihood of purchasing store brand food and beverages, September 2014
                                                                                                                    • Figure 53: Store brand food and beverage purchases in the past month, by factors influencing more store brand food and beverage purchases – Rank 1, September 2014
                                                                                                                    • Figure 54: Store brand food and beverage purchases in the past month, by factors influencing more store brand food and beverage purchases – Rank 1, September 2014
                                                                                                                    • Figure 55: Store brand food and beverage purchases in the past month, by agreement with attitudes toward store brand and national brand food and beverages – private label quality, September 2014
                                                                                                                    • Figure 56: Store brand food and beverage purchases in the past month, by agreement with attitudes toward store brand and national brand food and beverages – perceptions, September 2014
                                                                                                                  • Types of food and beverage store brands purchased
                                                                                                                    • Figure 57: Types of store brand food and beverage purchases in the last month, by gender, September 2014
                                                                                                                    • Figure 58: Types of store brand food and beverage purchases in the last month, by household income, September 2014
                                                                                                                  • Likelihood of purchasing store brand food and beverages
                                                                                                                    • Figure 59: Any Likelihood of purchasing store brand food and beverages, by gender, September 2014
                                                                                                                    • Figure 60: Any Likelihood of purchasing store brand food and beverages, by age, September 2014
                                                                                                                    • Figure 61: Any Likelihood of purchasing store brand food and beverages, by household income, September 2014
                                                                                                                  • Reasons for buying store brand food and beverages
                                                                                                                    • Figure 62: Reasons for buying store brand food and beverages, by gender, September 2014
                                                                                                                    • Figure 63: Reasons for buying store brand food and beverages, by household income, September 2014
                                                                                                                    • Figure 64: Reasons for buying store brand food and beverages, by race/Hispanic origin, September 2014
                                                                                                                    • Figure 65: Reasons for buying store brand food and beverages, by presence of children in household, September 2014
                                                                                                                    • Figure 66: Reasons for buying store brand food and beverages, by educational level, September 2014
                                                                                                                  • Factors influencing more store brand food and beverage purchases
                                                                                                                    • Figure 67: Factors influencing more store brand food and beverage purchases – rank 1, by gender, September 2014
                                                                                                                    • Figure 68: Factors influencing more store brand food and beverage purchases – rank 1, by age, September 2014
                                                                                                                    • Figure 69: Factors influencing more store brand food and beverage purchases – rank 1, by household income, September 2014
                                                                                                                    • Figure 70: Factors influencing more store brand food and beverage purchases – Rank 1, by race/Hispanic origin, September 2014
                                                                                                                    • Figure 71: Factors influencing more store brand food and beverage purchases – rank 1, by presence of children in household, September 2014
                                                                                                                    • Figure 72: Factors influencing more store brand food and beverage purchases – rank 1, by generations, September 2014
                                                                                                                  • Attitudes toward store brand and national brand food and beverages
                                                                                                                    • Figure 73: Agreement with attitudes toward store brand and national brand food and beverages (any agree), by gender, September 2014
                                                                                                                    • Figure 74: Agreement with attitudes toward store brand and national brand food and beverages (any agree), by age, September 2014
                                                                                                                    • Figure 75: Agreement with attitudes toward store brand and national brand food and beverages (any agree), by household income, September 2014
                                                                                                                • Appendix – Trade Associations

                                                                                                                  Companies Covered

                                                                                                                  • Walmart Stores (USA)

                                                                                                                  Attitudes toward Private Label - US - November 2014

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