FMI and IRI Cap Off Research Series on the Power of Private Brands, Revealing Profitable Insights
ARLINGTON, VA and CHICAGO — Nov. 7, 2019 — Newly released consumer research by Food Marketing Institute (FMI) and its insights provider IRI® reveals that food retail private brands have greater influence on where grocery customers shop. Today, 46% of consumers say store brands influence their store choice, versus just 35% three years ago, and private brands are gaining fans across a wider range of demographics and generations as retailers are successfully demonstrating innovation and value. The Power of Private Brands: From the Consumer is the final analysis in a three-part series regarding private brand trends, which all share unique perspectives on the growth potential across categories and channels.
FMI Vice President, Industry Relations, Doug Baker commented on the breadth of the research findings across financials and best practices, saying, “The solid growth of private brands reflects the success of retailers treating private brands as brands, rather than just following the lead of national and legacy brands. The proof is in consumer satisfaction; shoppers surveyed shared most that they trust the quality of private brands and believe they get a good value. Still, our research indicates that challenges remain for private brands’ image, such as its packaging.”
While Baker noted that grocery retail growth with their private brands has not been keeping pace with other retail channels, private brands led manufacturer brands in dollar sales growth across multiple retail outlets for the second consecutive year, up 5.4%. The positive momentum is reflected across many private brand categories, geographic regions, consumer generations and income levels. The catalysts are a range of factors, including increased shopper trips, higher dollars per trip, increased velocity, shoppers adding more items to carts, and expanded distribution.
Private brands posted U.S. sales of $153 billion in calendar year 2018 across multiple retail outlets and convenience, according to IRI, which spearheads the data analysis for the FMI Private Brands Leadership Council. The private brands dollar figure represents edible and non-edible segments.
Mark McKeown, Client Insights Principal, IRI, explained how grocery retailers that are making commitments, testing and learning will see growing interest from a wide range of consumers. McKeown said, “Consumers have shown they are willing to embrace new directions in their private brand strategies, which suggests myriad possibilities for retailers as they explore shopper preferences revealed in our research.”
Power of Private Brands: From the Register delves into the latest insights about consumer spending on private brands. Private brand performance has improved considerably during this three-year period. The only caveat is that increased momentum is reflected more powerfully outside of the Grocery Channel.
Power of Private Brands: From the Industry suggests retailers have been gradually shifting promotional vehicles in recent years. Several themes emerged, such as Instagram rising in importance for retailers; an increased identification of health and well-being as a growth opportunity; and a strong commitment to food safety.
Power of Private Brands: From the Consumer assesses consumers’ attitudes toward and purchasing habits around private brands, along with the “destination effect” of private brands on consumer’s choice of retailers. Consumers continue to step up engagement with private brands as retailers are successfully demonstrating innovation and value.
Food Marketing Institute proudly advocates on behalf of the food retail industry, which employs nearly 5 million workers and represents a combined annual sales volume of almost $800 billion. FMI member companies operate nearly 33,000 retail food stores and 12,000 pharmacies. FMI membership includes the entire spectrum of food retail venues; single owner grocery stores, large multi-store supermarket chains, pharmacies, online and mixed retail stores. Through programs in public affairs, food safety, research, education, health and wellness and industry relations, FMI offers resources and provides valuable benefits to almost 1,000 food retail and wholesale member companies and serves 85 international retail member companies. In addition, FMI has almost 500 associate member companies that provide products and services to the food retail industry. For more information, visit www.fmi.org and for information regarding the FMI Foundation, visit www.fmifoundation.org.
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help CPG, OTC health care organizations, retailers, financial services and media companies grow their businesses. A confluence of major external events — a change in consumer buying habits, big data coming into its own, advanced analytics and personalized consumer activation — is leading to a seismic shift in drivers of success in all industries. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand, cloud-based technology platform, IRI is empowering the personalization revolution, helping to guide its more than 5,000 clients around the world in their quests to remain relentlessly relevant, capture market share, connect with consumers, collaborate with key constituents and deliver market-leading growth. For more information, visit www.iriworldwide.com.
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