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Private Label Beverages - US - December 2013

“Stiff competition from global beverage companies means retailers have to work very hard to compete in the private label beverage category. Addressing the needs of key demographic groups, offering products that meet consumer needs for value, quality, and more, as well as playing on the inherent advantages of being a retailer will help address these challenges.”

– Sarah Day Levesque, Food and Beverage Analyst

This report looks at the following areas:

  • How can retailers increase household penetration of private label drinks?
  • What can be done to improve the quality perception of private label drinks?
  • How can retailers better compete with name brands?

The private label beverage market has grown from 2009 to 2013 and has been relatively stagnant since 2011. Despite an increase in new product launches since 2011, an increase in name brand product launches combined with an improving economy has kept private label beverage sales around an estimated $15.8 billion in 2013. Sales growth is expected to stay on this same slow growth trajectory for 2009-13 as retailers struggle to compete with name brands in the category. Maintaining and increasing growth will rely on retailer innovation in beverage products that address the needs of a variety of consumers.

Among the topics covered in this report are:

  • What is driving, or hindering, the private label beverage market?
  • What is the current market size and future projections?
  • What types of private label beverage products are most successful with consumers?
  • Which companies have been the most aggressive in marketing and what positioning are they using?
  • How are retailers innovating with private label beverage products to better address consumer needs?
  • What factors influence consumer behavior and what matters most to consumers?

For the purposes of this report, Mintel has used the following definitions:
According to the Private Label Manufacturers Association (PLMA), 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. In some cases, a store may belong to a wholesale buying group that owns labels, which are available to the members of the group. These wholesaler-owned labels are referred to as controlled labels.

This report includes private label sales and market share data in the following segments:

  • 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.

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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

                    • The market size and forecast for private label beverages
                      • Figure 1: Total US sales and fan chart forecast of private label beverages, at current prices, 2009-18
                    • Milk dominates but rising stars offer opportunities
                      • Figure 2: Private label beverage sales as a percentage of total MULO sales, by top five segments, 2013
                    • Innovation drives growth segments
                      • Figure 3: MULO sales of private label beverages, by top five segments, 2011 and 2013
                    • The consumer
                      • Figure 4: Proportion of store brand beverages bought in a shopping trip, by gender and age, September 2013
                    • Store brands need more than low price to maintain sales
                      • Figure 5: Consumer attitudes toward store brand drinks, September 2013
                    • What we think
                    • Issues and Insights

                        • How can retailers increase household penetration of private label drinks?
                          • Issues
                            • Insight: Tailor products to high-user potential demographics
                              • What can be done to improve the quality perception of private label drinks?
                                • Issue
                                  • Insight: Position products for more than just value
                                    • How can retailers better compete with name brands?
                                      • Issue
                                        • Insight: Capitalize on retailer advantages
                                        • Trend Applications

                                            • Trend: Guiding Choice
                                              • Trend: Make it Mine
                                                • Mintel Futures: Brand Intervention
                                                • Market Size and Forecast

                                                  • Key points
                                                    • Share of overall MULO market decreasing
                                                      • Figure 6: MULO sales and forecast of total and private label beverages, at current prices, 2009-13
                                                    • Sales and forecast of private label beverages
                                                      • Figure 7: Total US retail sales of private label beverages, at current prices, 2009-18
                                                      • Figure 8: Total US retail sales of private label beverages, at inflation-adjusted prices, 2009-18
                                                    • Fan chart forecast
                                                        • Figure 9: Total US sales and fan chart forecast of private label beverages, at current prices, 2009-18
                                                    • Market Drivers

                                                      • Key points
                                                        • Shrinking food budgets lead many to store brands
                                                          • Product innovation may convince more consumers to try store brand
                                                            • Figure 10: Growth in new beverage product launches, 2008-2012
                                                        • Segment Performance

                                                          • Key points
                                                            • Some segments grow, some fall as private label beverage sales hold steady
                                                              • Sales of private label beverages, by segment
                                                                • Figure 11: MULO sales of private label beverages, by segment, 2011 and 2013
                                                            • Segment Performance – Milk, Non-dairy Drinks, Yogurt Drinks

                                                              • Key points
                                                                • Private label market share shrinking after gaining ground in 2011
                                                                  • Figure 12: MULO sales of total and private label milk, non-dairy drinks, and yogurt drinks, at current prices, 2009-13
                                                                  • Figure 13: MULO sales and forecast of private label milk, non-dairy drinks, yogurt drinks, at current prices, by segment, 2009-18
                                                              • Segment Performance – Water

                                                                • Key points
                                                                  • Private label water continues to gain ground
                                                                    • Figure 14: MULO sales of total and private label water, at current prices, 2009-13
                                                                    • Figure 15: MULO sales and forecast of private label water, at current prices, by segment, 2009-18
                                                                • Segment Performance – Juice and Juice Drinks

                                                                  • Key points
                                                                    • As sales drop, so does private label’s share of market
                                                                      • Figure 16: MULO sales of total and private label juice and juice drinks, at current prices, 2009-13
                                                                      • Figure 17: MULO sales and forecast of private-label juice and juice drinks, at current prices, by segment, 2009-18
                                                                  • Segment Performance – Tea and Coffee

                                                                    • Key points
                                                                      • Despite growth, private label share of tea and coffee remains constant
                                                                        • Figure 18: MULO sales of total and private label tea and coffee, at current prices, 2009-13
                                                                        • Figure 19: MULO sales and forecast of private label tea and coffee drinks, at current prices, by segment, 2009-18
                                                                    • Segment Performance – Others

                                                                      • Key points
                                                                        • Figure 20: MULO sales of total and private-label carbonated beverages and energy drinks, at current prices, 2009-13
                                                                        • Figure 21: MULO sales of total and private label alcoholic beverages, at current prices, 2009-13
                                                                        • Figure 22: MULO sales of total and private label sports, nutritional, performance drinks, at current prices, 2009-13
                                                                    • Retail Channels and Leading Companies

                                                                      • Key points
                                                                        • Two thirds of store brand beverage sales are in the supermarket channel
                                                                          • Figure 23: Supermarket sales of total beverages and private label beverages, at current prices, 2009-13
                                                                        • Consumers not committed to single channel
                                                                          • Great Value, Target represent differing private label strategies
                                                                            • Figure 24: Consumer purchase of selected store brands, by company, by store brand usage levels, September 2013
                                                                        • Innovations and Innovators

                                                                          • Private label beverages leading innovation growth until 2013
                                                                            • Figure 25: Change in new product launches, by brand versus private label, 2008-13*
                                                                            • Figure 26: Share of new beverage product launches, by brand versus private label, 2008-13*
                                                                          • Most private label categories show growth in new products
                                                                            • Figure 27: New product launches of name brand beverages, by category, 2008-13
                                                                            • Figure 28: New product launches of private label beverages, by category, 2008-13*
                                                                          • Retailers keep pace with name brands in flavored water introductions
                                                                            • Flavored, seasonal coffee varieties enhance quality perceptions
                                                                            • Marketing Strategies

                                                                              • Overview of the brand landscape
                                                                                • Consumer recognition of name brands versus store brands
                                                                                  • Figure 29: Consumer brand recognition, September 2013
                                                                                • Theme: Generic replaced by authenticity
                                                                                  • Brand example
                                                                                    • Figure 30: Archer Farms by Target, Youtube ad, 2013
                                                                                  • Theme: Positioning store brand as a brand in and of itself
                                                                                    • Brand example
                                                                                    • Consumer Purchasing of Store Brand Beverages

                                                                                      • Key points
                                                                                        • Store brand beverage buying still lags behind store brand food
                                                                                            • Figure 31: Proportion of store brand beverages bought in a shopping trip, September 2013
                                                                                          • Young consumers, particularly men, drive store brand sales
                                                                                              • Figure 32: Proportion of store brand beverages bought in a shopping trip, by gender and age, September 2013
                                                                                            • Milk, juice, bottled water lead store brand drink categories in consumer use
                                                                                              • Figure 33: Consumer use of store brand drink, by category, September 2013
                                                                                              • Figure 34: Consumer use of store brand drink, By frequency, by category, September 2013
                                                                                            • Retailers need new approach in some categories to appeal to women
                                                                                              • Figure 35: Consumer use of store brand by drink category – Frequent usage, by gender, September 2013
                                                                                            • Hispanics and non-Whites present market opportunity
                                                                                              • Figure 36: Proportion of store brand beverages bought in a shopping trip, by race/Hispanic origin, September 2013
                                                                                              • Figure 37: Consumer use of store brand by drink category – Frequent usage, by race/Hispanic origin, September 2013
                                                                                          • Change In-store Brand Purchasing Behavior

                                                                                            • Key points
                                                                                              • Consumers, particularly young, buying more store brands in 2013
                                                                                                • Figure 38: Change in store brand purchasing behavior, by age, September 2013
                                                                                              • Reasons for changing buying habits vary slightly by age
                                                                                                • Figure 39: Consumer reasons for buying more store brand drinks in 2013, by age, September 2013
                                                                                                • Figure 40: Consumer reasons for buying less store brand drinks in 2013, by age, September 2013
                                                                                            • Store Brand Purchasing Behavior

                                                                                              • Key points
                                                                                                • Improving quality perceptions may mean opportunity for market growth
                                                                                                  • Figure 41: Consumer attitudes on store brand quality, by age, September 2013
                                                                                                • Higher-quality store brands will drive retailer business
                                                                                                  • Figure 42: Store brand purchasing behavior, by gender, September 2013
                                                                                                  • Figure 43: Store brand purchasing behavior, by age, September 2013
                                                                                                • Taste perceptions still holding store brand beverages back
                                                                                                  • Figure 44: Consumer attitudes toward store brand drinks, September 2013
                                                                                                  • Figure 45: Store brand purchasing behavior, September 2013
                                                                                              • Consumer Attitudes toward Store Brand Beverages

                                                                                                • Key points
                                                                                                  • Store brands need more than low price to maintain sales
                                                                                                      • Figure 46: Consumer attitudes toward store brand drinks, September 2013
                                                                                                    • Most consumers comfortable with others knowing of store brand use
                                                                                                      • Figure 47: Consumer attitudes toward store brand drinks, September 2013
                                                                                                    • Those most likely to use store brands also most secretive about it
                                                                                                      • Figure 48: Agreement with consumer attitudes toward store brand drinks, by age, September 2013
                                                                                                      • Figure 49: Agreement with consumer attitudes toward store brand drinks, by store brand usage levels, September 2013
                                                                                                      • Figure 50: Agreement with consumer attitudes toward store brand drinks, by race/Hispanic origin, September 2013
                                                                                                  • Cluster Analysis

                                                                                                      • Unengaged Consumers
                                                                                                        • Demographics
                                                                                                          • Characteristics
                                                                                                            • Opportunity
                                                                                                              • Value Driven Purchasers
                                                                                                                • Demographics
                                                                                                                  • Characteristics
                                                                                                                    • Opportunity
                                                                                                                      • Undercover Users
                                                                                                                        • Demographics
                                                                                                                          • Characteristics
                                                                                                                            • Opportunity
                                                                                                                              • Cluster characteristic tables
                                                                                                                                • Figure 51: Target clusters, September 2013
                                                                                                                                • Figure 52: Proportion of store brand beverages bought in a shopping trip, by target clusters, September 2013
                                                                                                                                • Figure 53: Incorrect identification of food and drink brands, by target clusters, September 2013
                                                                                                                                • Figure 54: Consumer purchase of selected store brands, by company, by target clusters, September 2013
                                                                                                                                • Figure 55: Consumer use of store brand by drink category – Frequent usage, by target clusters, September 2013
                                                                                                                                • Figure 56: Consumer use of store brand by drink category – Casual usage, by target clusters, September 2013
                                                                                                                                • Figure 57: Store brand purchasing behavior, by target clusters, September 2013
                                                                                                                                • Figure 58: Change in store brand purchasing behavior, by target clusters, September 2013
                                                                                                                                • Figure 59: Agreement with consumer attitudes toward store brand drinks, by target clusters, September 2013
                                                                                                                                • Figure 60: Consumer attitudes on store brand quality, by target clusters, September 2013
                                                                                                                              • Cluster demographic tables
                                                                                                                                • Figure 61: Target clusters, by demographics, September 2013
                                                                                                                              • Cluster methodology
                                                                                                                              • Appendix – Market Drivers

                                                                                                                                • Consumer confidence
                                                                                                                                  • Figure 62: University of Michigan’s index of consumer sentiment (ICS), 2007-13
                                                                                                                                • Unemployment
                                                                                                                                  • Figure 63: US unemployment rate, by month, 2002-13
                                                                                                                                  • Figure 64: US unemployment and underemployment rates, 2007-13
                                                                                                                                  • Figure 65: Number of employed civilians in US, in thousands, 2007-13
                                                                                                                                • Food cost pressures
                                                                                                                                  • Figure 66: Changes in USDA Food Price Indexes, 2011-14
                                                                                                                                • Obesity
                                                                                                                                  • Figure 67: American adults by weight category as determined by body mass index (BMI), 2008-Oct. 28, 2013
                                                                                                                                • Childhood and teen obesity – highest in decades
                                                                                                                                    • Figure 68: Prevalence of obesity among children and adolescents aged 2-19, 1971-2010
                                                                                                                                  • Racial, ethnic population growth
                                                                                                                                      • Figure 69: US population by race and Hispanic origin, 2008, 2013, and 2018
                                                                                                                                      • Figure 70: Households with children, by race and Hispanic origin of householder, 2012
                                                                                                                                    • Shifting US demographics
                                                                                                                                      • Figure 71: US population, by age, 2008-18
                                                                                                                                      • Figure 72: US households, by presence of own children, 2002-12
                                                                                                                                  • Appendix – Other Useful Consumer Tables

                                                                                                                                      • Figure 73: Proportion of store brand beverages bought in a shopping trip, September 2013
                                                                                                                                      • Figure 74: Proportion of store brand beverages bought in a shopping trip, by age, September 2013
                                                                                                                                      • Figure 75: Proportion of store brand beverages bought in a shopping trip, by presence of children in household, September 2013
                                                                                                                                      • Figure 76: Incorrect Identification, by age, September 2013
                                                                                                                                      • Figure 77: Incorrect Identification, by race/Hispanic origin, September 2013
                                                                                                                                      • Figure 78: Consumer use of store brand by drink category, September 2013
                                                                                                                                      • Figure 79: Consumer use of store brand by drink category – Frequent usage*, by age, September 2013
                                                                                                                                      • Figure 80: Consumer use of store brand by drink category – Frequent usage, by presence of children in household, September 2013
                                                                                                                                      • Figure 81: Consumer use of store brand by drink category – Casual usage*, by household income, September 2013
                                                                                                                                      • Figure 82: Store brand purchasing behavior, by gender and age, September 2013
                                                                                                                                      • Figure 83: Store brand purchasing behavior, by household income, September 2013
                                                                                                                                      • Figure 84: Store brand purchasing behavior, by store brand usage levels, September 2013
                                                                                                                                      • Figure 85: Change in store brand purchasing behavior, by gender, September 2013
                                                                                                                                      • Figure 86: Change in store brand purchasing behavior, by age, September 2013
                                                                                                                                      • Figure 87: Consumer reasons for buying more store brand drinks in 2013, by gender, September 2013
                                                                                                                                      • Figure 88: Consumer reasons for buying more store brand drinks in 2013, by age, September 2013
                                                                                                                                      • Figure 89: Consumer attitudes toward store brand drinks, September 2013
                                                                                                                                      • Figure 90: Agreement with consumer attitudes toward store brand drinks, by household income, September 2013
                                                                                                                                      • Figure 91: Agreement with consumer attitudes toward store brand drinks, by race/Hispanic origin, September 2013
                                                                                                                                      • Figure 92: Agreement with consumer attitudes toward store brand drinks, by presence of children in household, September 2013
                                                                                                                                  • Appendix – Trade Associations

                                                                                                                                    Companies Covered

                                                                                                                                    • Walmart Stores (USA)

                                                                                                                                    Private Label Beverages - US - December 2013

                                                                                                                                    £3,199.84 (Excl.Tax)