“With the growth in beverage alcohol, the future for quality, lower-priced alternatives to name brands looks positive, particularly as the consumer becomes more cost conscious,” BMC’s Schmidt says.
Although the economy is fairly stable, today’s consumers view the consumer packaged goods (CPGs) market differently, buying products first based on need and second based on brand, a plus for private-label marketers, says Susan Viamari, vice president of Thought Leadership for Chicago-based Information Resources Inc. (IRI).
“As detailed in our private-label trends report, private label is viewed as a viable CPG solution, not just a low-priced alternative to a national brand option,” Viamari says. “Today’s consumers, particularly younger consumers, increasingly make product selections to address specific needs/wants, and secondarily [based] on the name on the front of the package.”
In its September report titled “Realigning for Growth: Win by Innovating across CPG Market Segments,” the market research firm notes that American consumers are guided by such attributes as single-serve packaging, minimal calorie counts, high protein or gluten free.
“The shift in thinking — and buying behaviors — has come about quickly,” the report states. “In just the last decade, consumers’ choices have moved away from a focus on form (water or coffee, for instance) and a spotlight on brand to an emphasis on the benefits for the buyer. The beverage sector has been changing at a much faster clip than many other CPG segments.”
As a result, private-label beverages are performing well. In U.S. multi-outlets, private-label beverages generated dollar sales of more than $7.8 billion for the 52 weeks ending Oct. 8, a 7 percent increase compared with the prior-year period, IRI data indicates. National and private-label beverage brands combined accounted for sales of more than $92.4 billion, a 1.2 percent increase year-over-year, according to the data.
“Both non-alcoholic and alcoholic private-label beverages outperformed the industry overall and the private-label sector of the industry,” Viamari explains. “Liquor has been a standout, with double-digit growth on a much smaller base.