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Private label food products are getting some much-needed attention, especially from young shoppers, according to "Private Label Foods: What’s Driving Purchase? — US," a February 2015 report from global market intelligence firm Mintel. In fact, 42 percent of Millennials (aged 18-36) agree that store brand food products are more innovative than name-brand products.
Additionally, more than one-third (37 percent) of U.S. shoppers prefer to buy store brand products over name-brand products, Mintel said. Store brand food buyers have positive perceptions of these products, with 63 percent agreeing they are higher in quality than they used to be, including close to 70 percent of millennials.
According to the report, many U.S. shoppers agree that store brand products stack up against their name-brand counterparts in flavor, packaging and variety of product offerings, further blurring the line between the brand types.
“We’re seeing a shift in consumer thinking at the grocery store,” said Amanda Topper, Mintel food analyst. “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, it seems U.S. store brand buyers hold tight to the notions of brand trust and product loyalty. Nearly 70 percent of all store brand shoppers agree that they trust certain store brands more than others, Mintel said, and 64 percent say once they’ve tried one store brand product, they are likely to try other products. Ideologies of brand trust are even stronger for millennials, who are more likely to buy store brand foods in general (97 percent vs. 94 percent of all U.S. shoppers).
In the report, Mintel identifies unique sub-groups within the 94 percent of U.S. shoppers who are private label food buyers. One group, the "Private Label Lovers," consists of 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 the Private Label Lover consumer segment, but not at the expense of sacrificing quality,” Topper said.
Mintel’s research also reveals that enhancing store brand foods through improved quality, variety of options and product innovation is key for engaging with Private Label Lovers now and in the future. Functional packaging attributes are important to store brand shoppers, including ease of opening (35 percent), resealablity (35 percent) and ease of storage (29 percent). Private Label Lovers would also like to see more product for the same price (55 percent) and products made in the USA (45 percent).
“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,” Topper said. “Store brand shoppers are gravitating toward this trend, seeking out store brand products that list ingredients they recognize and feature prominent claims such as 'organic,' 'low/no/reduced' or 'made with natural ingredients' right on the packaging.”
Nearly one-third of adults who buy store brand foods (30 percent) indicate that they consider "no artificial ingredients" when making a purchase, Mintel said. Additionally, 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 gluten-free claims have increased by 10.5 percentage points, according to Mintel's Global New Products Database.
For a comprehensive analysis of the private label category, visit store.mintel.com to download the new report.