As economic conditions the last few years have led more shoppers to try out private label products, many grocery retail store brands have increasingly gained repeat sales, brand recognition and trust from consumers.

According to data from Circana, dollar sales of private labels grew 8.3% in the first half of 2023 ended June 25, and dollar share rose to a record high of 18%. Unit sales decreased 1.2%, but unit share reached a high of 22.5%. Natural cheese was identified as one of the top three categories generating private label sales at $970 million.

FMI – The Food Industry Association’s “Power of Private Brands 2023” report found that 95% of shoppers say they are buying private brands occasionally, and 46% say they are buying store brand items “most or all of the time.”

“Shoppers are definitely more upbeat about private brands,” FMI said. “The feedback indicates that accelerated private brand trial during the COVID-19 pandemic is having enduring positive impacts.”

The report found that just within the last 12 months, 61% of consumers said they purchased more store brands, and only 26% said they bought more name brand products in 2023 than before.

“Much of the private brand growth is likely due to inflation and the challenging economic landscape,” FMI said. “However, the gains are also about more than just price. Consumer trial of private brands has increased considerably since the pandemic began, and many shoppers relay positive perspectives about these brands.”

As for 2024, 54% of consumers said they expect to buy private brands somewhat or much more, and 90% said they are somewhat or very likely to keep buying private labels even if grocery prices decline. Only 26% of consumers said they expect to buy more name brands.

“Price remains an important purchase driver, but shopper decisions about private brands go well beyond price,” FMI said. “It will be important for the food industry to drive further private brand trial, convert more shoppers to frequent private brand buyers and understand changing shopper notions of value.”

Store brands gain recognition

Many consumers buying store brands have shopped around and tried private label products from a variety of grocery retailers.

FMI found that beyond price and value, consumers are now recognizing differences in quality and taste across different store brands and are developing preferences for certain retailers’ brands over others. More than half of consumers (53%) said private label offerings are very or extremely important in determining where they shop, compared to 35% in 2016 and 46% in 2019.

As private label sales continue to grow, retailers are putting more effort into marketing their store brands and giving them personality.

Many retailers have even divided up their store brands to market some as premium or exclusive to specific departments.

One example is Bentonville, Ark.-based Walmart Inc., which has many different store brands for different purposes.

Walmart’s Great Value brand is featured across all departments and usually offers the store’s lowest prices.

In the deli department, as of January 2024, the Great Value Honey Ham Lunchmeat is priced at $4.78 per pound for a 16-ounce family pack. Walmart also has the Prima Della private brand exclusively for premium deli meats and cheeses. Prima Della’s Honey Ham, Deli Sliced is priced higher at $8.77 per pound. For deli cheese, Walmart’s Great Value Deli Style Sliced Colby & Monterey Jack Cheese, sold in 8-ounce packages, is priced at $4.44 per pound, and the Prima Della Colby Jack Cheese, Deli Sliced is priced at $7.62 per pound.

Another Walmart brand in the deli is Marketside, which features specialty products like a Blue Cheese Crumble Cup or Sopressata Salami with Gouda Cheese & Cornichons Snack Pack, among other specialty cheeses and charcuterie snack pack varieties.

The Marketside brand also features specialty ready-to-cook prepared foods like the Garlic & Four Cheese Stuffed Baby Bella Mushrooms or Chicken Bacon Ranch Flatbread Pizza.

Opposite of Marketside, Walmart’s Freshness Guaranteed brand offers standard deli salads, dips, and sandwiches at a lower price point. Although it is priced more like Great Value, Freshness Guaranteed is exclusively for the fresh perimeter departments.

Another major retailer with distinct store brands is the Minneapolis-based Target Corporation.

Market Pantry is Target’s private brand that usually offers the lowest prices. Most Market Pantry products are shelf-stable, but it does have a line of deli salads in prepared foods.

Target’s Good & Gather is the private brand most associated with fresh, better-for-you ingredients and offers many different types of deli meats, cheeses, dips, and snack packs. The premium version of Good & Gather, which offers specialty items like Cave Aged Gruyere Cheese imported from Switzerland, is simply named Good & Gather Signature. Keeping the Good & Gather name maintains the image already associated with the brand, while the word Signature indicates that there is a reason for the higher prices.

Consistency builds consumer trust

Sunbury, Pa.-based Weis Markets makes it easy for its shoppers to identify its private brands and distinguish what each one is for with consistent logos and imagery. On a web page dedicated to its store brands, the Mid-Atlantic retailer provides the following descriptions:

• Weis Quality: Carefully designed and formulated to be equal or better than the national brand — at a fraction of the cost.
• Weis Signature Collection: When you are looking for a truly gourmet and indulging restaurant-style experience.
• Weis By Nature: Our line of better-for-you products. These products are either free-from or certified organic.
• Weis2Go: Offers consumers easy, but quality, meal and side solutions at affordable prices.

In 2023, Weis Markets partnered with Instacart to offer same-day grocery delivery, making it even more convenient for shoppers to purchase Weis2Go prepared foods and meal kits.

Last year, the retailer also promoted Alison Gregas to director of private brands. In this role, Gregas is responsible for new product development and the day-to-day management of the company’s 6,500-item private brand program, the company said.

Aside from brands The Kroger Co. has acquired, such as Murray’s Cheese, the Cincinnati-based retailer has three main store brands.

The first one is Kroger Brand, which is easily recognized across all departments and offers the lowest prices. In 2023, Kroger Brand also launched Kroger Mercado, featuring Latin American-inspired foods.

“No matter the occasion Kroger Brand has you covered because it is tried, tested and loved by you,” Kroger said.

Kroger’s Simple Truth brand offers better-for-you products such as organic hummus, plant-based deli slices, and soups. According to the company, Simple Truth products have a “Free From” badge on the labels indicating they were made without the 101+ “unwanted ingredients” Kroger has identified.

Some products offer even more information on the label. For example, the Simple Truth Organic Chicken Noodle Soup says, “Chicken raised with no antibiotics or added hormones ever.” Seeing these consistent, easy-to-read labels on each product can help consumers build trust in the brand.

“Simple Truth was born out of the idea that finding better-for-you products shouldn’t be hard, and that your journey to better living should be easier,” Kroger said. “With so many choices, it can be overwhelming to find products that are affordable, delicious and without ingredients you don’t want. Simple Truth makes it easy to find better-for-you products that are free from unwanted ingredients.”

Kroger’s third main store brand is Private Selection, which offers premium deli-sliced meats and cheeses; specialty charcuterie items like Pre-sliced Prosciutto & Mozzarella Rolls; and unique dips such as Baba Ghannouj, Candied Jalapeno & Bacon Cream Cheese, and Margherita Pizza Flavored Cream Cheese.

“Private Selection brings you the next-level flavor you crave, without all the fuss,” Kroger said. “We’re here to show you how to create culinary excellence anywhere — in your kitchen, in your bento box, even in your microwave. So, take some time to explore and enjoy — one bite, sip or dip at a time.”

This article is an excerpt from the February 2024 issue of Supermarket Perimeter. You can read the entire Store Brands feature and more in the digital edition here.