SEPTEMBER 2009
EXECUTIVE OVERVIEW

IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This report explores current and emerging private label trends as well as influencing factors that are reshaping the CPG industry.

Introduction

Consumer rituals have changed drastically over the past couple years, largely in response to adverse economic conditions.

The economic unrest is beginning to show signs of easing, but consumers remain steadfastly in savings mode.  At the crux of many savings strategies is private label packaged goods products.  For years U.S. retailers have been honing their private label arsenal in the name of differentiation.  The timing of these efforts has been meticulous.  Private label has been elevated to a whole new level.

Retailers continue to invest heavily in their brands.     Innovation is increasing and promotional support is growing.

Economic recovery will likely be a long and arduous process.  And, indications are that recession-induced ritual changes will remain long after the recession has officially ended.

For retail brands, it is time to shine.  And for national brands, it is time to step-up competitive efforts.  Both are happening already.  Competition for share of CPG spending is intense.  

This report explores current and emerging private label trends as well as influencing factors that are reshaping the CPG industry.  Manufacturers and retailers with a clear understanding of these forces will be able to develop and execute competitive strategies for their brands which meet corporate goals while simultaneously delivering against consumer needs.

Select Findings

Retailer efforts to elevate private label have been bolstered by a turbulent economy, driving private label share of CPG spending to new heights.  Over the past year, private brand share of CPG unit sales has climbed 1.2 points.  Though the economy is showing signs of brightening, private label gains made today are expected to long outlast the current recession.

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The average private label discount versus national brand is about 31%, but the average price gap varies markedly across departments. As private label innovation increasingly expands beyond “me-too” products, the cost of store brand research and development has the potential to rise significantly.  This may erode some of the savings offered by private store brands, and/or retailer margin on these items.

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See the complete report in the "Private Label 2009: Game-Changing Economy Taking Private Label to New Heights" pdf.