Disruptors 2017: Private Label

This is part of Supermarket News’ 2017 Disruptors package. See the entire lineup here.

There are good reasons why so many supermarket executives, Wall Street analysts and marketing gurus see a boom in store brands.

Signs of it appear all along the retail landscape. CEOs at the two largest brick-and-mortar retailers—Walmart and Kroger—say they plan to ramp up their store brands programs. Online, Amazon is marketing the successful range of 365 brand products it acquired from Whole Foods, while Walmart’s online subsidiary, Jet.com, is introducing a range of consumables under the new Uniquely J brand.

Meanwhile grocery discounters Aldi and Lidl are rapidly expanding across the country with their powerful private label programs.

What’s driving all this activity? Marketing experts point to a new generation of consumers who no longer are loyal to the big national brands purchased by their parents. Wall Street analysts emphasize how store brands help the retailer’s bottom line in a hypercompetitive marketplace. Supermarket executives are relying on their store brands to create the differentiated product assortments needed to revive center store sales and add excitement to the fast-growing fresh departments along the store perimeter.

The success of store brands is forging new relationships between retailers and their private label suppliers. They are working more closely than ever to create the new, innovative products that today’s consumers are looking for. Retailers are investing more in new product development and marketing programs, while private label manufacturers are upgrading and expanding their production and supply chain capabilities.

Retailers and their private label suppliers recognize that these investments are necessary to keep the boom in store brands going for many years to come.

Tim Simmons is vice president of communications at the Private Label Manufacturers Association (PLMA).