CHICAGO: One-third of US shoppers consciously seek out private label products to save money and CPG marketers need to "keep value and affordability in the crosshairs", a new study has said.
According to a Times & Trends report from shopper information business IRI, US consumers spent a total of $120bn on private label products in 2014. This represented a 2.1% rise on the previous year but IRI said this growth was levelling off and was in any case largely driven by price increases.
It further noted that value did not necessarily equate to lowest price. "Affordability means something different to each unique shopper," it said, adding that CPG marketers had to "maintain a clear vision of how their most promising consumers and shoppers are defining affordability at each moment of purchase".
IRI also observed that marketers could look to fracture the concentration in this market, where the top 50 CPG categories account for 64% of overall CPG dollar sales and 67% in the case of private label sales.
It pointed to "outside-the-box product launches" that took businesses into new categories and cited the example of Procter & Gamble: the FMCG giant introduced a new sleep remedy, ZzzQuil, and gained 30 share points in the category, worth more than $120m, in one year.
National brands have shown some momentum in drug stores, IRI reported, with innovation particularly strong in beauty and vitamins.
Private label, on the other hand has been making inroads in the mass/super channel, gaining significant share in frozen departments (+5.3 unit share points) and lesser increases in refrigerated (+1.8) and general food reporting increases (+1.2).
"To ensure the right products are on the right shelves at the right time, CPG marketers must invest to understand shopping behaviours and key influencers of those behaviours at a very individual level and across CPG channels," said Susan Viamari, editor of Thought Leadership, IRI.
She also recommended that manufacturers and retailers work more closely together, suggesting they "participate in joint business planning to establish an optimal mix of categories, brands, pack sizes and price points within each unique marketplace".
According to a Times & Trends report from shopper information business IRI, US consumers spent a total of $120bn on private label products in 2014. This represented a 2.1% rise on the previous year but IRI said this growth was levelling off and was in any case largely driven by price increases.
It further noted that value did not necessarily equate to lowest price. "Affordability means something different to each unique shopper," it said, adding that CPG marketers had to "maintain a clear vision of how their most promising consumers and shoppers are defining affordability at each moment of purchase".
IRI also observed that marketers could look to fracture the concentration in this market, where the top 50 CPG categories account for 64% of overall CPG dollar sales and 67% in the case of private label sales.
It pointed to "outside-the-box product launches" that took businesses into new categories and cited the example of Procter & Gamble: the FMCG giant introduced a new sleep remedy, ZzzQuil, and gained 30 share points in the category, worth more than $120m, in one year.
National brands have shown some momentum in drug stores, IRI reported, with innovation particularly strong in beauty and vitamins.
Private label, on the other hand has been making inroads in the mass/super channel, gaining significant share in frozen departments (+5.3 unit share points) and lesser increases in refrigerated (+1.8) and general food reporting increases (+1.2).
"To ensure the right products are on the right shelves at the right time, CPG marketers must invest to understand shopping behaviours and key influencers of those behaviours at a very individual level and across CPG channels," said Susan Viamari, editor of Thought Leadership, IRI.
She also recommended that manufacturers and retailers work more closely together, suggesting they "participate in joint business planning to establish an optimal mix of categories, brands, pack sizes and price points within each unique marketplace".
Data sourced from Business Wire, IRI; additional content by Warc staff
