T. Ozbun
Research expert covering food retail and all food topics for Italy and Brazil
Almost one in five consumer goods products in the United States is a private label. Over the past five years, private brands of U.S. consumer goods have witnessed a constant growth in market share, going from 17.7 percent in 2019 to close to 19 percent by 2023. These products, typically manufactured or supplied by third-party companies and sold under the brand name of the purchasing company, offer a cost-effective alternative to regional, national, or international brands as they incur lower marketing expenses. Particularly during times of economic hardship, such as the current inflationary period, shoppers have come to view private label goods as an affordable choice without compromising on quality, fueling their evident growth.
The convergence of changing consumer behavior, persistent price increases, and the growing occurrence of shrinkflation point towards a promising future for private labels.
Private label retail scene in the U.S.
Their sales value has experienced a similar upward trend, rising from 176 billion to over 236 billion U.S. dollars during the same period. However, unit sales have displayed fluctuations and a general decline from the peak achieved in 2020. This trend is reflective of the overall retail market, where both store brands and name brands have been affected. Despite this, private labels have managed to gain a larger share of unit sales, at the expense of name brands. Factors such as lingering inflation, persistently high prices, an uncertain economy and job market, and a growing emphasis on waste reduction have collectively driven U.S. consumers to reduce their overall basket size.Edible vs non-edible private label categories
Private label products, encompassing both food and beverages and non-edible items, exhibited similar dynamics across the sector. However, the share of private labels varied significantly depending on the product category. In the food and beverages segment, for instance, private brands accounted for over 65 percent of refrigerated meat dollar sales, while only representing 5.5 percent of salty snacks sales. Similarly, in non-edible categories, store brands held more than 83 percent of the dollar share for disposable tableware, but comprised approximately nine percent of sales for pet food.Consumer trends among private label shoppers
Shifting purchasing patterns have influenced consumers' perspectives on private label brands. A recent survey revealed that 68 percent of U.S. consumers are inclined to buy more private label products due to their affordability, while 30 percent choose them based on their perceived quality. Although national brands still enjoy greater popularity, preferences also differ based on the age of shoppers, with younger individuals exhibiting a preference for store brands.The convergence of changing consumer behavior, persistent price increases, and the growing occurrence of shrinkflation point towards a promising future for private labels.
