What’s new and what’s next in private label?

When we walked the aisles of last year’s Private Label Trade Show in Chicago, we wondered whether the mammoth growth of store brands would sustain amid moderating grocery price inflation.

We got our answer this year. A record 1,650 exhibitors claimed booths at the Donald E. Stephens Convention Center, forcing a 20% expansion of floor space, according to the Private Label Manufacturers Association (PLMA).

Store brands have blossomed into a $230 billion industry in the U.S., making up nearly 30% of all new dollar sales in retail last year, PLMA said.

At Target, for example, the retailer’s Good & Gather store brand is “on its way” to becoming a $4 billion label, Rick Gomez, the retailer’s chief food and beverage officer, told WGB last month, calling it the “crown jewel” of Target’s portfolio.

Here’s a look at some of the private-label trends and new products spotted by Winsight Grocery Business at the Private Label Trade Show Monday.

Better-for-you is king

Sure, there were plenty of indulgent snacks and sweets on display at the Private Label Trade Show. But it was hard to walk more than a few feet without spotting a manufacturer promoting the health benefits of their offerings. Functional foods, such as those said to boost immunity, gut health, energy and other attributes, are particularly popular.

Related:Private Label Trade Show returns to Chicago

And for good reason: About a quarter of all consumers are looking for dietary-specific private brands (gluten-free, keto, plant-based) and 35% of shoppers said they’re hunting for high-protein products, according to new research from private-brand development firm Daymon.

Jackson, Wisconsin-based Earth Ranch showed off its new line of nuts infused with flavors like coffee and spicy dill pickle, created through a proprietary process that amps up the protein while slightly reducing the fat, according to Cindy Poiesz, the company’s director of innovation.

Private label infused nuts from Earth Ranch / Photo: Heather Lalley

“We’ll see functional claims a lot more into next year,” Poiesz said.

BetterBody Foods, which started out selling agave nectar in 2007, has since expanded into dozens of better-for-you products made under its own labels and under private label for many major retailers.

New this year from the company is overnight oats infused with chia, flax and hemp seeds, as well as powdered oatmilk. Consumers only need to add water, said Chelsea Lindbeck, BetterBody Foods’ VP of product development.

Next year, Lindbeck said, the company plans to add more flavors to the overnight oats line.

Related:Private label is huge right now. Here are the trendiest categories.

Consumers are hunting for personalized nutrition for specific health goals, she said.

“Wer’re still seeing a lot of sugar reduction,” Lindbeck said. “Not necessarily sugar-free but reduced. People don’t want to sacrifice the taste. Protein, that has not subsided at all. That is the king of the nutrients. Protein and less sugar is what people want.” — Heather Lalley

Alternative sweeteners

Private-label products such as honey, maple syrup and other sugar substitutes were prominent on the show floor.

These sweeteners gained traction during the pandemic as at-home baking was at an all-time high, and post-pandemic growth is continuing.

Jeff Alpert, director of Butternut Mountain Farm, which specializes in 100% pure maple syrup, told WGB his company has seen “tremendous uplift since COVID.”

Aside from a stack of pancakes, maple syrup is now trending and being used in salad dressings and anywhere else as a replacement for sugar. “People are realizing the health benefits of maple syrup,” Alpert added.

Honey, which was also trending on the show floor last year, is expected to grow at a CAGR of 9.39% from 2022 to 2027, driven by the increase in the number of private label products, according to the latest research from Technavio.

Another item used in baking that is trending is vanilla bean paste. Consumers are putting this paste on ice cream, coffee and even in cocktails, Dan Edmiston, founder of Native Vanilla, told WGB. — Diane Adam

Beauty is booming

Also trending on the show floor were health and beauty products , with everything from private-label makeup to razors to nailcare and more. Amid rising costs of living, shoppers are finding beauty in private label.

Some retailers are developing store-within-a-store concepts around these products, PLMA noted.

“The private brand beauty business is glowing,” PLMA President Peggy Davies said. Dollar sales of private brand beauty products increased 5% to $3.6 billion in all outlets for the 52 weeks ending June 18 versus the same period the prior year, according to Circana.  

With retailers glamming up their private brand products in beauty, trending are products developed with free-from, plant-based or functional ingredients. Gender-inclusive products are also growing in popularity, PLMA noted. — D.A.

Smart sourcing

In a market where the source of the products is naturally obscured, several brands aimed to stand out by emphasizing the traceability of their products. 

Alejandro Trabattoni, vice president of foodservice and marketing for Garland Food, said the company’s messaging is “full traceability from farm to table” because their products—mainly value-added items made from garlic and ginger—are sourced from all over the world, depending on the time year.

“We buy the first part of the year from Argentina, the second part of the year from Spain, from China, Mexico and from Peru,” Trabattoni said. “So, our customer needs to know where the product comes from and that they are certified.”

Similarly, Paramount Roasters, a Lansing, Michigan-based coffee company, highlighted the various countries where its beans are procured. Some of their customers, such as Biggby Coffee, go beyond the source and provide names and images of the farmers.

Biggby’s farm-direct approach, as opposed to buying through a broker system, aims to bring “a name, a face and a place to every cup of coffee we serve.” 

“The nice thing about farm direct is we’re not just saying we’ll buy it one time from you; we’re saying we’ll buy it from you for years to come,” Rich Schaafsma, chief sales officer at Paramount Roaster, told WGB.

That can resonate well with consumers who have a heightened awareness about the sources of their foods, according to Samantha McEntire, a business development manager at Fair Trade USA, which certifies food products—everything from coffee and tea to seafood, cosmetics, home goods and more —to promote a sustainable livelihood for farmers and other food manufacturers.

McEntire said consumers are increasingly concerned about where their products are being produced, who is producing them and whether they're being treated fairly.

For example, Kroger has made commitments with its private-label brand Simple Truth to source all coffee from sustainable, fair-trade producers, she said. “They’re making public commitments, so they’re getting credit for that,” McEntire added. “So, it’s a differentiator, but (private label is) a more challenging market because they’re more price sensitive, generally, than a known brand.” — Timothy Inklebarger

Pet food that appeals to humans, too

All those trends above that are appealing to people? Yeah, they’re apparently enticing to Fido, too.

Private-label pet foods are now boasting functional ingredients, transparent supply chains and environmentally friendly sourcing.

“When you come here, you really see the humanization of pets,” Rick Ruffolo, CEO of Rockford, Illinois-based Phelps Pet Products.

Dog treats from Phelps Pet Products / Photo: Heather Lalley

Ingredients such as sweet potato, flax seeds, chia and blueberries that might otherwise go to waste can be “recaptured” and used in pet food, Ruffolo noted.

His company has focused on earning supply chain transparency certifications, to appeal to retailers and consumers.

And Phelps recently acquired machinery necessary to produce pet treats in a wide variety of shapes, from waffles to logs to nuggets and more.

“Dogs don’t care what the shape is, but the humans do,” he said. “You’re seeing pet food look a lot like human treats.” — H.L.