• Ad Age, Monday, February 23, 2009 11:15 AM

Private-label packaged goods could surge as much as six times the roughly one-point market-share gain already seen since the recession began in December 2007, Jack Neff reports, bolstered by a slowdown in consumer spending that could last from four to 10 years.

Executives at the CAGNY conference in Boca Raton, Fla., last week acknowledged the growing threat from private label, but they all felt that the impact would be felt by their competitors, not them. All in all, private-label market shares grew 0.8 percentage points to 21.9% of volume and 0.7 points to 17.1% of dollars in all package-goods categories and retail channels last year, according to Information Resources Inc. The pace accelerated over the course of the year and reached all income ranges.

Private label also has been occurring in categories where it was never a factor before, such as feminine protection and skincare, says Sanford C. Bernstein analyst Ali Dibadj. The response to the downturn has become increasingly promotional. "We're starting to train consumers that the deal price is the only price," warns Thom Blischok, president-consulting and innovation at IRI. "We're pumping out the morphine of deal, deal, deal. And we need to be talking value."

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