Following a banner year in 2020, 2021 was a roller coaster ride for private-label products—with unpredictable ups and downs leading to a near-flatline finish.
In food and beverages, the biggest dollar gains for private-label/store brands last year occurred in deli-prepared (+17.1%), bakery (+12.4%) and produce (+11.4%).
Private-label products ended 2021 up 1% to a record $199 billion, according to the Private-label Manufacturers Association’s 2022 Private-label Report, which is based on retail channels tracked by IRI.
By way of perspective, dollar sales of these brands in 2018 and 2019 increased 5% and 6.2%, respectively.
Then came the pandemic.
“The year 2020 was a clear outlier,” the PLMA report states.
“Private brands jumped 12.3% in dollar sales amid the shutdown of foodservice, a greater emphasis on cooking at home, and the boom in online grocery ordering.”
Last year started with a two-month “tailwind” from 2020—with January and February increases of 10% and 7.7%.
As the nation gradually emerged from lockdown and in-person restaurants and foodservice began to rebound, private brand sales experienced a three-month-long dip, declining 18.7%, 5.1% and 6.5% from March through May.
In the remaining eight months, store-brand sales turned positive—with gains of at least 6% in September, November and December.
Outside of food and beverages, 2021 saw a 1.7% dollar gain in sales of private-label general merchandise, a decline of 0.2% in health products and drops of 10% in home care and 10.5% in tobacco.
While the PLMA did not make sales predictions for 2022, the most recent COVID-19 Consumer Survey Tracker from Cowen Research notes “glimmers of consumer optimism around spend and mobility” given the decline in Omicron variant cases.
That’s not to say that private-label goods can expect an upswing.
Among other factors, Cowen attributes fluctuations in private-label’s share of food sales during the pandemic to “inherent production complexity” as well as some people trading up to premium products.
“This trend has held up despite branded price gaps to private label that are currently the widest we’ve seen in at least five years—nearly 20% above average [for branded products] over that period,” Cowen notes.
“We do not anticipate any reversal in the near term, as subsequent pricing rounds flow through in the coming months.”