Private Label & National Brands: Paving the Path to Growth Together

December 2013
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. To provide insights into strategies that will guide national and private brand manufacturers along the path to continued growth, IRI conducted extensive analysis of the interaction between private label and national brand packaged goods solutions.

In Brief

National brand and private label marketers have long been locked in a dance, each vying for share of consumers’ $725 billion-plus CPG expenditures, and the battle is fierce, for even small share wins provide a significant boost to the bottom line. The recession served to intensify the dance, and private label led for a time. Today, the choreography is more nuanced, with national brands and private label each playing a role in an elaborate show, and the consumer is at center stage.

Private label and national brands are each showing areas of strength and industry dynamics are evolving.  During the past year, national brands have captured share across five of the 10 largest CPG categories, and share of sales within the grocery channel remained a solid 18.2%.  Private label share has also increased across half of the largest CPG categories, with drug, convenience and dollar channels showing signs of increased private label momentum. Both national and private label manufacturers are broadening their product portfolios. These changes are having an impact on private label’s key strength—the price point—and reinforcing the need for retailer/manufacturer collaboration on private label strategies.

While some industry experts believe that private label has “had its day,” IRI believes that private label and national brand marketers can enjoy mutual growth by not simply co-existing, but rather evolving and working together to serve the full spectrum of consumer needs and wants. 

Marketers need to invest to understand exactly where, when and on what these dollars are spent. Light private label buyers dedicate 11% of their CPG dollars to private label solutions. Enticing these shoppers spend just 10% more on private label solutions, would increase annual private label sales by more than $400 million annually across CPG outlets.

CPG marketers must deploy marketing programs carefully, leveraging the most powerful tactics available in a manner that will deliver the right message to the right shoppers at the right time. By far, the most significant sales volume boost is provided by combined feature and display actions. Though this two-pronged tactic was not heavily leveraged during the past year, the response was quite powerful.  Three-quarters of private label categories that were supported by combined feature and display action enjoyed lift of 100% or more.

See the complete report in the "Private Label & National Brands: Paving the Path to Growth Together" pdf.