FMI – The Food Industry Association has released its second installment of “2022 Power of Private Brands,” which surveys food retailers and manufacturers about their private brands growth strategies.
Retailers report having strong goals over the next two years for their private brand portfolio, with a current average dollar share of 18.2 percent and a goal of 22.6 percent in the next two years.
“As the food industry looks toward the future for private brands, they are setting bold targets based on high demand from consumers, “said Doug Baker, VP of industry relations. “To reach these goals, retailers and manufactures are looking at several tactics including private brands outside the U.S. that have higher shares for approaches to growth, including innovation, strategies to accelerate growth and enhanced ecommerce availability for private brands.”
Innovation opportunities for private brands
Eighty-one percent of food retailers and manufacturers surveyed report innovation as the top strategy for achieving higher private brands market share. Specifically, industry respondents see potential for private brands premium products (69 percent), product options with simple ingredient lists (60 percent), products offering strong price/value in a category (56 percent) and prepared meal solutions (42 percent).
Strategies to accelerate private brands growth
Food retailers and manufacturers surveyed report a wide range of strategies to accelerate private brands growth. Seventy-one percent plan on working with suppliers to optimize price and availability, which aligns with consumers mostly choosing private brands because of lower costs, deals or perception of good value. Other top acceleration strategies mentioned include improving consumer insights and trends intelligence (64 percent), launching new products (64 percent) and improving packaging (58 percent).
Enhancing private brands e-commerce
Currently, food retailers report 60 percent of their private brands assortment is available on their e-commerce platform, so expanding availability is a key strategy for growth. Retailers and suppliers mentioned several other improvements for private brands e-commerce, such as search functionality prioritizing private brands offerings (80 percent), providing compelling product images (73 percent), tagging attributes in search, such as health and well-being and sustainability (65 percent) and utilizing suggestive selling in search results (53 percent).
The “Power of Private Brands 2022: Reaching for New Heights in Private Brands” report is sponsored by Bamboo Rose and part of a series of related research for private brands professionals.
For more information, visit FMI.org/PrivateBrands.