36 Center Store Handbook 2016/2017 www.groceryheadquarters.com
foods such as milk and cheese, bottled water made it into
the top ten private label items by dollar volume in supermarkets, with $1.5 billion in sales. Bottled water also had
a solid share in dollar volume, with 27 percent share.
Other center store items in which private label had billion dollar-plus sales and above average shares included
frozen meats and seafood with $1.4 billion in sales and
41. 5 percent share of the category, frozen vegetables
with $1.3 billion and 36.3 percent share, and canned vegetables with $1.2 billion and 34. 6 percent share. Private
label ice cream had $1 billion in sales and accounted for
25. 6 percent share of the ice cream category. Snacks also
fared well, with $1.1 billion and 8.2 percent share.
Sharoff says it is important for retailers to get the word
out about new store brand products, and in-store sampling can help get people to visit the center store—not
just the perimeter. “Consumers are looking for new
ingredients, like Sriracha or quinoa, and store brands
have to be current with shopper trends.”
Consumers are also looking for better-for-you foods.
According to global market intelligence agency Mintel,
in its Private Label Food Trends U.S., February 2016
report, retailers are expanding their selections of private label better-for-you items. However, 76 percent of
consumers say they would like to see more transparency
from store brands about who makes them, how they are
produced and what their origins are.
Millennials are especially attracted to these healthful
items. Chicago-based Mintel reported that 64 percent
of Millennial respondents said they are more likely to
buy store brand food and beverage products that are
healthy/better-for-you, 60 percent said they would buy
the products if they are natural and 36 percent said they
would buy the products if they are organic.
This age group also seeks transparency and accord-
ing to Mintel, Millennials are more likely than other age
groups to say they would trust a store brand more if it
provided information about the brand’s origin. They
are also more likely than non-Millennials to perceive
national brands as doing a better job of this. The report
indicated that 81 percent of Millennials said they would
trust a store brand more if it listed the product’s origin,
compared to 73 percent of non-Millennials. Also, 67
percent of Millennials said national brands are better at
this messaging than private label, while 49 percent of
non-Millennials said this.
The report noted that store brands have an opportu-
nity to target Millennials with better marketing messages
and brand backstories that will resonate with this group.
Although Millennials are skeptical about unsubstanti-
ated claims, they do like to read messaging about the
organic farmers who grow the produce, how a brand got
its start and how the brand is different from others.
People shopping for their families are also key consum-
ers for private label. Parents with children under age 18
in the household said 32 percent of the items they buy in
grocery are store brands, according to Mintel, while peo-
ple without children in the household said 15 percent of
the items they bought were private label. For Hispanics
the figure was 26 percent, while non-Hispanics said only
20 percent of the items in their carts were private label.
Family households may be limited by tight budgets
but they are also looking for good quality, better-for-you
foods to feed their families. Mintel reports that Hispanics
are significantly more likely than non-Hispanics to dedicate 75 percent or more of their grocery cart to store
brands. The report noted that Hispanic population
growth is projected to be 27. 4 percent between 2010
and 2020, and the group’s spending power is expected
to surpass $1.7 trillion by 2017.
Somewhat counterintuitively, the report indicated that
even if these shoppers have a lower-than-average household income and they are seeking value, they are also
willing to spend more on premium store brands. They
also said they would spend more than they would for
national brands, again hinting that people do not shop
for private label solely based on price. They are seeking premium brands that offer quality, and according to
Mintel, retailers that are expanding their brands should
market these efforts aggressively to these groups.
Private label is performing well in organic too. According
to The Hartman Group, based in Bellevue, Wash., 28
percent of consumers say they are buying more organic
items now than a year ago, and 20 percent say they are
buying more private label organic products than a year
ago. Again, Millennials and parents were more likely
to seek organic private label items, with 27 percent of
Millennials and 29 percent of parents with children under
age eight saying they have been buying more organic
private label products lately.