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The Private Label Food Consumer - US - November 2013

“A slowly recovering economy and lingering perceptions of inferior quality are inhibiting sales growth. Retailers will need to address these issues and others through innovation in products and positioning.”

– Sarah Day Levesque, Food and Drink Analyst

Some questions answered in this report include:

  • How can retailers encourage increased store brand usage?
  • How are retailers addressing perceptions of poor store brand quality?
  • How can retailers differentiate between value and premium store brands?

The private label food market has grown 19% from 2009-13, driven by increased demand during and after the recession of 2008 and 2009. Increased demand during this period was supported by increased availability of store brands and improving quality. Continued consumer concerns about the economy, along with increased availability of both premium and value-positioned store brands, will help drive the market. An increasing trend toward investment in store brand marketing also will help increase awareness of and interest in store brands. However, as the economy continues to recover, retailers will need to continue to develop new products to address growing consumer food concerns, such as convenience, health, and demand for natural or organic.

Among the topics covered in this report are:

  • What is driving, or hindering, the private label food market?
  • What is the current market size and future projections?
  • What types of private label food 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 food products to better address consumer needs?
  • What actors influence consumer behavior and what matters most to consumers?

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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

                  • Overview
                    • Market size and forecast for private label foods
                      • Figure 1: Total US sales and fan chart forecast of private label foods, at current prices, 2009-18
                    • Shelf-stable dominates, but deli and bakery show potential
                      • Figure 2: MULO sales of private label food, by segment, 2011 and 2013
                    • The private label food consumer
                      • Oldest consumers less likely to use store brand food
                        • Figure 3: Store brands’ proportion of consumers’ weekly food purchases, by generation
                      • Restricted food budgets driving more than a third of consumers to use more
                        • Figure 4: Consumer reasons for buying more store brands in 2013, September 2013
                      • Beyond price, quality, consumers want health, convenience
                        • Figure 5: Consumer attitudes on store brand quality, September 2013
                      • What we think
                      • Issues and Insights

                          • How can retailers encourage increased store brand usage?
                            • Issue
                              • Insight: Target products to specific consumer groups
                                • How are retailers addressing perceptions of poor store brand quality?
                                  • Issues
                                    • Insight: Make a good first impression
                                      • How can retailers differentiate between value and premium store brands?
                                        • Issues
                                          • Insight: Create a brand position
                                          • Trend Applications

                                              • Trend: The Nouveau Poor
                                                • Trend: Moral Brands
                                                  • Mintel Futures: Human
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • Recession, slow economy drive private labels sales to $55 billion
                                                        • Continued slow economic growth, product innovation will drive market
                                                          • Sales and forecast of private label foods
                                                            • Figure 6: Total US retail sales of the private label food market, at current prices, 2009-18
                                                            • Figure 7: Total US retail sales of the private label food market, at inflation-adjusted prices, 2009-18
                                                          • Fan chart forecast
                                                              • Figure 8: Total US sales and fan chart forecast of private label foods, at current prices, 2009-18
                                                          • Market Drivers

                                                            • Key points
                                                              • Economic indicators suggests store brand appeal will grow
                                                                • Change in SNAP benefits may influence store brand usage
                                                                  • Continued quality gains will encourage consumer usage
                                                                    • Innovation in products and services drives interest
                                                                    • Competitive Context

                                                                      • Name brands continue to dominate
                                                                      • Segment Performance

                                                                        • Key points
                                                                          • Private label sales grow 4.6% led by shelf-stable segment
                                                                            • Sales of market, by segment
                                                                              • Figure 9: MULO sales of private label food, by segment, 2011 and 2013
                                                                          • Segment Performance – Shelf-stable

                                                                            • Key points
                                                                              • Leading segment struggles to sustain strong annual growth
                                                                                • Sales and forecast of shelf-stable private label foods
                                                                                  • Figure 10: Total US retail sales of shelf-stable store brand foods, at current prices, 2009-18
                                                                              • Segment Performance – Refrigerated and Dairy Case

                                                                                • Key points
                                                                                  • Sales and forecast of refrigerated and dairy case store brand food
                                                                                    • Figure 11: Total US retail sales of refrigerated and dairy case store brand foods, at current prices, 2009-18
                                                                                • Segment Performance – Frozen

                                                                                  • Key points
                                                                                    • Frozen segment grows despite consumers’ mixed favor for products
                                                                                      • Sales and forecast of frozen store brand food
                                                                                        • Figure 12: Total US retail sales of frozen store brand foods, at current prices, 2009-18
                                                                                    • Segment Performance – Bakery

                                                                                      • Key points
                                                                                        • Bakery segment shows potential for added growth
                                                                                          • Sales and forecast of bakery store brand foods
                                                                                            • Figure 13: Total US retail sales of bakery store brand foods, at current prices, 2009-18
                                                                                        • Segment Performance – Deli

                                                                                          • Key points
                                                                                            • Strong sales growth expected to slow from 2013-18
                                                                                              • Sales and forecast of deli store brand food
                                                                                                • Figure 14: Total US retail sales of deli store brand foods, at current prices, 2009-18
                                                                                            • Retail Channels

                                                                                              • Key points
                                                                                                • Supermarkets
                                                                                                  • Figure 15: Share of MULO private label sales, 2009-13
                                                                                                  • Figure 16: Supermarket sales of total food and private label food, at current prices, 2009-13
                                                                                                • Other MULO channels
                                                                                                  • Figure 17: Other MULO channels sales of total food and private label food, at current prices, 2009-13
                                                                                              • Innovations and Innovative Retailers

                                                                                                • Private label outpaces name brand in new product launches
                                                                                                  • Figure 18: New product launches, by name brand vs. store brand, 2008-13*
                                                                                                • Snack foods lead private label expansion
                                                                                                  • Figure 19: New private label food product launches, by food category, 2008-13*
                                                                                                • Growth in claims exemplifies potential for evolution of store brands
                                                                                                  • Figure 20: New private label product launches, by product claim, 2008-13*
                                                                                                • Safeway addresses Hispanic consumers with Mexican store brand
                                                                                                  • 7-Eleven launches gourmet, better-for-you snacks
                                                                                                  • Marketing Strategies

                                                                                                    • Overview of the brand landscape
                                                                                                      • Theme: Quality that rivals name brand standards
                                                                                                        • Archer Farms emphasizes quality ingredients, artisanal production
                                                                                                          • Figure 21: Archer Farms, Archer Farms Experience–Hummus, 2013
                                                                                                        • Walmart swaps name brand for store brand to show comparable quality
                                                                                                          • TV presence
                                                                                                            • Figure 22: Walmart, Walmart Steak-over Chicago: Frank the Skeptic, 2012
                                                                                                          • Events
                                                                                                            • Theme: Retailers placing more importance on private label advertising
                                                                                                              • Target boldly places store brands upfront with name brands in marketing campaigns
                                                                                                                • Figure 23: Market Pantry, The Everyday Collection. By Target. -"Pinata", 2013
                                                                                                            • Store Brand Food Usage

                                                                                                              • Key points
                                                                                                                • Oldest consumers less likely to use store brand food
                                                                                                                  • Figure 24: Store brands’ proportion of consumers’ weekly food purchases, by generation, September, 2013
                                                                                                                • Store brand usage more popular with parents, not highest-income earners
                                                                                                                  • Figure 25: Store brands’ proportion of consumers’ weekly food purchases, by presence of children in household, September, 2013
                                                                                                                  • Figure 26: Store brands’ proportion of consumers’ weekly food purchases, by income, September, 2013
                                                                                                                • Higher-penetration food categories have higher store brand purchase rates
                                                                                                                  • Figure 27: Consumer store brand use, by food category, September, 2013
                                                                                                                • Store brand users don’t discriminate against different food categories
                                                                                                                  • Figure 28: Frequent store brand use, by food category, by gender, September, 2013
                                                                                                                • Great Value, Kirkland most commonly used store brands
                                                                                                                  • Figure 29: Store brand consumer usage of specific store brands, September 2013
                                                                                                              • Change in Store Brand Purchasing Behavior

                                                                                                                • Key points
                                                                                                                  • More than a third of store brand users buying more in 2013
                                                                                                                    • Figure 30: Change in store brands purchasing behavior, 2013
                                                                                                                    • Figure 31: Consumer reasons for buying more store brands in 2013, September 2013
                                                                                                                    • Figure 32: Consumer reasons for buying less store brands in 2013, September 2013
                                                                                                                  • Lowest- and middle-income earners most likely to buy more, reasons vary
                                                                                                                    • Figure 33: Change in store brands purchasing behavior, by income, 2013
                                                                                                                    • Figure 34: Consumer reasons for buying more store brands in 2013, by household income, September 2013
                                                                                                                • Store Brand Food Recognition

                                                                                                                  • Key points
                                                                                                                    • Store brand/name brand distinction often difficult for consumers
                                                                                                                      • Figure 35: Consumer store brand and name brand recognition, 2013
                                                                                                                    • Higher-income consumers buy less but recognize brands better
                                                                                                                      • Figure 36: Incorrect identification, by household income, September 2013
                                                                                                                  • Store Brand Purchasing Behavior

                                                                                                                    • Key points
                                                                                                                      • Low price attracts consumers but quality scares some away
                                                                                                                        • Figure 37: Consumer attitudes on store brand quality, September 2013
                                                                                                                        • Figure 38: Store brand purchasing behavior, September 2013
                                                                                                                        • Figure 39: Consumer attitudes toward store brand food, September 2013
                                                                                                                      • Quality breeds brand loyalty
                                                                                                                        • Figure 40: Store brand purchasing behavior, by household income, September 2013
                                                                                                                      • Beyond price and quality, consumers want health and convenience
                                                                                                                        • Figure 41: Consumer attitudes on store brand quality, September 2013
                                                                                                                    • Consumer Attitudes toward Store Brands

                                                                                                                      • Key points
                                                                                                                        • Store brand stigma is gone but inferiority impressions remain
                                                                                                                          • Figure 42: Consumer attitudes toward store brand food, September 2013
                                                                                                                        • Packaging offers store brands potential to better define themselves
                                                                                                                          • Store brands compete with name brands on more than price
                                                                                                                              • Figure 43: Consumer attitudes toward store brand food, September 2013
                                                                                                                          • Race and Hispanic Origin

                                                                                                                            • Key points
                                                                                                                              • Hispanics, other race consumers more likely to use store brand foods
                                                                                                                                • Figure 44: Frequent usage of store brands by food category, by race/Hispanic origin, September 2013
                                                                                                                              • Hispanics buying more store brands, Blacks and Asians buying less
                                                                                                                                • Figure 45: Change in store brand purchasing behavior, by race/Hispanic origin, September 2013
                                                                                                                                • Figure 46: Reasons consumers are buying more store brands in 2013 than 2012, by race/ethnicity, September 2013
                                                                                                                                • Figure 47: Reasons for buying less store brand food in 2013 than 2012, by race
                                                                                                                              • Hispanics, Asians more likely to be undercover store brand users
                                                                                                                                • Figure 48: Any agreement with consumer attitudes toward store brand food, by race/Hispanic origin, September 2013
                                                                                                                            • Appendix – Market Drivers

                                                                                                                              • Consumer confidence
                                                                                                                                • Figure 49: University of Michigan’s index of consumer sentiment (ICS), 2007-13
                                                                                                                              • Unemployment
                                                                                                                                • Figure 50: US Unemployment Rate, by month, 2002-13
                                                                                                                                • Figure 51: US unemployment and underemployment rates, 2007-13
                                                                                                                                • Figure 52: Number of employed civilians in US, in thousands, 2007-13
                                                                                                                              • Food cost pressures
                                                                                                                                • Figure 53: Changes in USDA Food Price Indexes, 2011-14
                                                                                                                              • Obesity
                                                                                                                                • Figure 54: American adults by weight category as determined by body mass index (BMI), 2008-June 20, 2013
                                                                                                                              • Childhood and teen obesity – highest in decades
                                                                                                                                  • Figure 55: Prevalence of obesity among children and adolescents aged 2-19, 1971-2010
                                                                                                                                • Racial, ethnic population growth
                                                                                                                                    • Figure 56: US population by race and Hispanic origin, 2008, 2013, and 2018
                                                                                                                                    • Figure 57: Households with children, by race and Hispanic origin of householder, 2012
                                                                                                                                  • Shifting US demographics
                                                                                                                                    • Figure 58: US population, by age, 2008-18
                                                                                                                                    • Figure 59: US households, by presence of own children, 2002-12
                                                                                                                                • Appendix – Other Useful Consumer Tables

                                                                                                                                    • Figure 60: Consumption of store brand products, April 2007-June 2013
                                                                                                                                    • Figure 61: Proportion of store brands bought in a shopping trip, September 2013
                                                                                                                                    • Figure 62: Proportion of store brands bought in a shopping trip, by generations, September 2013
                                                                                                                                    • Figure 63: Consumer brand recognition, September 2013
                                                                                                                                    • Figure 64: Any confusion in recognition, September 2013
                                                                                                                                    • Figure 65: Consumer brand recognition, September 2013
                                                                                                                                    • Figure 66: Correct identification, by gender, September 2013
                                                                                                                                    • Figure 67: Consumer purchase of selected store brands, by company, by Hispanic origin, September 2013
                                                                                                                                    • Figure 68: Consumer use of store brand by food category, September 2013
                                                                                                                                    • Figure 69: Frequent usage of store brands by food category, by gender, September 2013
                                                                                                                                    • Figure 70: Frequent usage of store brands by food category, by household income, September 2013
                                                                                                                                    • Figure 71: Frequent usage of store brands by food category, by generations, September 2013
                                                                                                                                    • Figure 72: Store brand purchasing behavior, by store brand usage levels, September 2013
                                                                                                                                    • Figure 73: Store brand purchasing behavior, by change in usage, September 2013
                                                                                                                                    • Figure 74: Any agreement with consumer attitudes toward store brand food, by household income, September 2013
                                                                                                                                    • Figure 75: Any agreement with consumer attitudes toward store brand food, by race/Hispanic origin, September 2013
                                                                                                                                    • Figure 76: Any agreement with consumer attitudes toward store brand food, by presence of children in household, September 2013
                                                                                                                                    • Figure 77: Any agreement with consumer attitudes toward store brand food, by generations, September 2013
                                                                                                                                    • Figure 78: Any agreement with consumer attitudes toward store brand food, by store brand usage levels, September 2013
                                                                                                                                    • Figure 79: Any agreement with consumer attitudes toward store brand food, by change in usage, September 2013
                                                                                                                                • Appendix – Trade Associations

                                                                                                                                  The Private Label Food Consumer - US - November 2013

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