It's no secret that store brands have seen explosive growth in recent years, and a new Mintel report documents that positive perceptions of these products have taken hold among significant numbers of Millennials and other consumers.
One interesting finding: 42% of Millennials (ages 18-36) agree that store brand food products are more innovative than name-brand products. In fact, Millennials are more likely to buy store brand foods in general (97% versus 94% of all U.S. shoppers).
Furthermore, 37% of U.S. shoppers as a whole say they prefer to buy store brand products over brand name products.
And in contrast to the old assumption that consumers mostly "settle" for buying private-label brands for cost reasons but view them as inferior, nearly two-thirds (63%) of store brand buyers — including 70% of Millennials — agree that these products are higher-quality than they used to be. Many shoppers also agree that store brands stack up against their name brand counterparts in flavor, packaging and variety of product offerings.
“We’re seeing a shift in consumer thinking at the grocery store,” sums up Mintel food analyst Amanda Topper. “Name brand power no longer holds the most weight. Quality, price and innovation are carving out a larger portion of consumer mindshare.”
In addition to improved quality and product innovation, nearly 70% of all store brand shoppers agree that they trust certain store brands more than others, and 64% said that once they’ve tried one store brand product, they are likely to try others. Brand trust as a store brand purchase driver is even stronger among Millennials.
What Drives 'Private Label Lovers'
Mintel identified unique groups within the 94% of shoppers who are private label food buyers, including the "private label lovers" — consumers who seek out products that are lower in price than name brand products, but equivalent in terms of ingredients and quality. Cost savings is a priority for these shoppers, "but not at the expense of sacrificing quality,” said Topper.
Mintel reports that enhancing the quality, variety and innovation levels of private label foods is key for engaging with private-label lovers.
Functional packaging attributes are important to store brand shoppers, including easy to open (35%), resealable (35%) and easy to store (29%). Private-label lovers would also like to see more product for the same price (55%) and products made in the USA (45%).
“Along with a move toward healthier eating and better-for-you foods, many private label food products are focusing on clean labels, with easy-to-read ingredients and product claims,” said Topper. “Store brand shoppers are...seeking out products that list ingredients they recognize, and feature prominent claims such as 'organic,' 'low/no/reduced' or 'made with natural ingredients.'"
Nearly a third (30%) of adults who buy store brand foods say that the "no artificial ingredients" claim is a factor in purchase decisions.
Furthermore, the number of private-label food products launched between 2009 and 2014 with a 'low/no/reduced allergen' claim has increased by 11.7 percentage points, and the gluten-free claim has increased by 10.5 percentage points, according to Mintel.