National CPG Brands Outpaced Private Labels in 2021

National CPG companies—both big and small—took share from private-label and midsize players in 2021, a new report from market researcher IRI and Boston Consulting Group (BCG) finds. 

Overall, CPG dollar sales rose 2.7% last year, IRI and BCG reported. That was a slowdown from the explosive growth of 2020, when the onset of the COVID-19 pandemic sent CPG dollar sales soaring 10.6% for the year. Volume sales were off 2% in 2021 but were up 4.3% on a two-year stack, according to the report.

CPG players at opposite ends of the company-size spectrum used their respective strengths to drive growth amid supply-chain constraints and an increasingly inflationary environment, IRI and BCG said in their 2021 CPG Growth Leaders study. Large CPG companies—with sales greater than $6 billion—took advantage of their pricing power in 2021 and gained market share (0.2 percentage points, to 45.9%) for the first time in five years, IRI and BCG reported.

Smaller CPG makers, meanwhile, continued to fill in the blanks for consumers, getting in front of more shoppers as competitors dealt with supply-chain sluggishness. For the year, small CPG companies (sales less than $100 million) saw their market share grow 0.3 percentage points to 12.7%. 

Midsize players saw their share edge down 0.1 percentage point to 17.3%. Private labels saw the biggest change in market share, falling 0.4 percentage points to capture 15.5% of CPG dollar sales for the year.

"The 2021 growth leaders won by navigating the continued pressures of the COVID-19 consumer behavior and operational environments, while also responding to strong consumer trends," said Krishnakumar (KK) Davey, IRI president of client engagement. 

Self-care products, particularly those touting functional benefits (stress relief, sleep promotion, hair loss prevention and overall wellness), resonated strongly with consumers. Vitamins alone saw $1 billion in sales growth in 2021, according to the report. In the fresh perimeter, convenience-focused products such as salad kits, salad bowls and other ready-made items performed well. Products touting "clean" ingredients and functional benefits—e.g. protein, with little or no added sugars—saw strong sales within snacks, beverages and sports nutrition products.

Looking ahead to the rest of 2022 and a post-pandemic future, CPGs will need to execute on several key imperatives to drive continued growth, the report's authors stated. Among these, they wrote, are flexible, dynamic supply chains, an infrastructure to deliver against changing consumer needs and expectations, and "data-driven paths to productivity."