Consumers accelerate shift to private label, citing price and quality, FMI finds

04-Oct-2023 - Last updated on 05-Oct-2023 at 20:34 GMT

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Consumers are continuing their shift from brand-named to private-label products as they increasingly cite price, value, quality, and taste as main reason why they are switching, according to the second annual Power of Private Brands 2023: What’s Ahead for Shoppers and Private Brands report from FMI — The Food Industry Association.

“Although inflationary pressures may have been the catalyst that prompted consumers to try more private brand products over the last few years, shoppers have clearly come to appreciate the quality and value that store brands offer. The overwhelming majority of shoppers tell us they plan to continue purchasing private brands in the future, even as grocery prices normalize,” Doug Baker, FMI VP of industry relations, said in a press release.

More consumers today are picking up private label brands, with 96% of 1,039 US consumers surveyed reporting they buy store brands occasionally, and 46% saying the buy private brands most or all the time, FMI shared.

Consumers are also accelerating the amount of private-label products that they are buying, with 60% saying they are buying much more or somewhat more private labels than last year, compared to 26% who are buying much more or somewhat more national brands. Additionally, 90% of shoppers say they will continue to purchase private-label brands regardless of inflation.

'Private brands are just as good as name brands'

When it comes to the top reasons consumers are buying more private brands, 68% of shoppers cite price, and 67% say it's good value. Consumer perceptions on private labels have also changed, with 30% of consumers citing quality, 26% taste, and 16% meeting meal solutions as drivers for purchasing private-label brands.

Shoppers are also seeing “private brands are just as good as name brands in a number of key areas,” FMI stated. More than half (59%) of consumers said private label provides the same level of product information, 57% said private brands were just as healthy as national brands, and 63% said they were just as good from an environmental standpoint. Additionally, 52% of shoppers said that they trust private brands as much as their counterparts.

“Shoppers are motivated to purchase store brands because they like the quality and the taste of the products, not just because of the affordability and value that private brands provide. This growing trust and loyalty consumers have developed for private brands highlights how these products have really evolved to become an extension of a retailers’ brand and value proposition, which is reflected in the way that private brands are also playing a bigger role in how consumers decide where to shop for food,” Baker added.