I love private label products! I started in retail more than 35 years ago and was quickly introduced to the variety and quality of products in the chain where I was working. Now, as a much more “mature” customer and a natural products industry veteran who used to manage different private label brands, I am more committed than ever to private label.
Apparently, American consumers share my passion. Deloitte recently came out with its 2013 American Pantry Study. There are, as you would expect, insights and nuggets of truth throughout this study, but one major thing found in it is the current and potentially continued strength of private label products.
The stats speak for themselves
A few statistics about private label items vs. store brands captured in the report:
More people are buying private label (store brands) in new categories. And they don’t feel they are sacrificing when they do so. Fewer people are bothered that they can’t currently afford national brands and fewer people plan to as the economy (and their purchasing power) improves.
Wow—all four questions here show some significant moves toward private label.
This data, as you might expect, comes from the total marketplace, not just the natural and organic sector. In the market as a whole, private label products have traditionally been the cheaper, knock-off products. Those days are apparently gone. In the natural and organic sector, private label hasn’t been the cheap alternative to the name brands. So this trend should reflect a great opportunity for natural product retailers.
For most natural product stores, supplements are the greatest private label opportunity. We are very fortunate as an industry to have quite a few very quality- and service-focused private label supplement providers. These companies offer great products, state-of-the-art quality control and manufacturing, good-looking labels, low minimums, quick order turnaround, etc. If your store doesn’t have a private label brand, you can and should correct that today. It has always been a good use of your shelf space and it is making more and more sense as the public continues to warm to private-label products.
Food products are bit more difficult for most stores to private label. Production runs are generally too high for an independent store to buy into. In fact, many small chains have challenges meeting minimum orders. (Once you buy the product, you have to store it until you sell through, tying up both space and money.) If you are a UNFI or a Tree of Life (KeHE) customer, both of these natural products distributors have private label brands that they sell only to independent natural stores. While they won’t be unique to your store, the products that you bring in from these brands won’t be in any other classes of trade being heavily promoted, deeply discounted, etc.
Be sure that your private label items are given great shelf space—in-line at eye level and on end caps. Every time that you can, be sure you put them in front or your shoppers. You have worked hard to build a positive brand equity and reputation for your store; your private label can help build on that.