Rampant inflation has led to 2022 being a golden time for private label. For the past 52 weeks ending on June 12, private-label growth jumped 6.3% and $149 billion in sales, according to Spins, an organization charged with furthering the growth of natural and sustainable products.
With no cessation of the current economics forecast, we spoke with Dan Buckstaff, CMO of Spins, about that growth. Here are some excerpts from that conversation.
Marketing Daily: In which categories has private label grown the most?
Dan Buckstaff: When looking at some of the top categories by percentage change and dollar sales, many of them are not surprising, including produce, bread and baked goods, and the frozen and refrigerated meat/poultry/seafood.
Many consumers are not often searching for specific brands in these categories, focusing rather on what looks the best, instead of opting for a specific label or manufacturer.
And these categories are some of the first to experience signs of inflation, supply chain challenges, ingredient shortages, and natural disasters that damage harvests. As such, with cyclical and unexpected inflation, many consumers will opt for private labels that offer similar products at a lower price point.
Marketing Daily: How have the shortages in infant formula affected private label?
Buckstaff: The large growth for infant formula and toddler nutrition drinks can be attributed to the shortages that have been going on for months, which forced consumers to look outside their usual formula brands and choose other options, including private label. In many stores, private label formulas are more readily available than some competing brands, with a lower price tag.
Marketing Daily: Which categories are doing well now?
Buckstaff: With the signs of inflation continuing to strike products across brick-and-mortar and online stores, consumers are taking a closer look at their budgets and where they can make cuts or look to alternatives.
Refrigerated pasta and pizza sauces – two products that make for quick, easy, and often cheap dinners for singles and families alike – are seeing growth. Choosing to switch to private labels in these categories is a simple choice for consumers who find similarities in the quality of the products between well-known brands and private labels.
Marketing Daily: What about in non-food?
Buckstaff: The importance of skincare is a growing trend among a series of age groups, but especially with young consumers looking to stay ahead of the clock with anti-aging products.
With many consumers incorporating more skincare and anti-aging practices at a young age, their discretionary income doesn’t always support their ability to buy high-priced, name-brand products. Therefore, they are pushed to choose private-label products with the same ingredients as the ones they’ve spotted on TikTok and Instagram.