• by Karlene Lukovitz  @KLmarketdaily, September 12, 2011

Despite the economy and the growth of private label, brand loyalty has increased in 45 of the top 100 CPG categories over the past three years, according to a new report from SymphonyIRI Group.  

Some -- like sports drinks -- have seen significant gains. Between 2008 and 2010, the percentage of consumers who reported being loyal to a sports drink brand rose by 6.5 percentage points, to 87.6%.

The definition of brand loyalty: More than 50% of the buyer's total purchasing in the category is of a single brand (not including private label).

Many of the categories showing the largest gains already had high loyalty percentages -- demonstrating that "true loyalty can survive even prolonged economic upheaval," says SymphonyIRI Times & Trends editor Susan Viamari.

Batteries gained 3.9 percentage points to reach a 73.5% loyalty level (as of July 3); cleaning tools/mops/brooms gained 2.8 to reach 72.4%; shelf-stable dinners gained 3.7 to reach 66.9%; shampoo gained 2.8 to reach 65.9%; cat and dog litter gained 2.5 to reach 62.2%; dry packaged dinners gained 3.2 to reach 59.3%; diapers gained 4.4 to reach 58.3%; and household cleaners gained 3.5 to reach 50.9%.

SymphonyIRI credits innovation as a major driver of the loyalty performance in many of these categories. For instance, during the three years, sports drink makers launched more than a dozen products that each generated more than $7.5 million in year-one sales.

In the diaper category, nine brands that achieved "New Product Pacesetter" status were launched. In fact, fewer consumers are loyal to private label diapers today than in 2008: down six points, to 18%. ("Private label loyalty" is defined as greater than 50% of the buyer's total purchasing in that category being private label.)

Categories showing the largest losses in brand loyalty include refrigerated salads/coleslaw (-22 points); gastrointestinal tablets (-11); cold/allergy/sinus tablets (-7.2); internal analgesics (-6.9); sugar (-6.5); pastry/doughnuts (-5.2); creams/creamers (-5.2); Mexican foods (-5.1); RTD tea/coffee (-4.9) and butter (-4.7).

Across all categories in which brand loyalty decreased most markedly, private label loyalty has increased. For instance, while brand loyalty in the salads/coleslaw category is still high (54%), private label loyalty has jumped by 19%, to 27%.

Private label loyalty levels exceed 50% in some categories viewed by consumers as largely undifferentiated, including butter (68.2%) and sugar (64.1%). When makers in these categories have to raise prices (butter and sugar prices have risen 22% and 13%, respectively, since 2008), brand loyalty drops and private label loyalty rises.

However, some categories have seen loyalty increases, or relatively small losses, despite double-digit percentage increases in price over the past three years. These include dish detergent (+1.8 points), chocolate candy (+1.3), frozen breakfast meals (+1.2) and razor blades (+0.3).

Conversely, across the 10 categories that showed the largest increases in percentage of dollars sold on deal (price promotions), six saw loyalty decline: toothbrushes, toothpaste, laundry detergents, women's sanitary products, skin care and processed frozen/refrigerated poultry. Categories that gained loyalty despite significant discount activity included eye/contact lens care, diapers, blades and soap.

Consistently competing on price "has significant negative impacts on brand equity," stresses John McIndoe, SVP, marketing for SymphonyIRI. "CPG leaders must harness the power of value ... CPG marketers are clearly getting this message."