How closely was private label growth tied to the recessionary consumer mindset between 2006 and 2009? As reported by SymphonyIRI, private label gained share in 74 percent of top CPG categories during that period. The correlation between economic hardship and private label success is all but certain.
But with the (somewhat tentative) economic recovery since that time, national brand marketers have stepped up efforts to deliver against consumers' quest for value — all while incorporating innovative product benefits that have been the hallmark of national brand dominance.
In many cases, national brands stressed simpler solutions, such as Procter & Gamble's Bounty Basic. In others — such as L'Oreal's Maybelline Fit Me — consumers were enticed to make "smart splurges" (pampering at reasonable prices).
Thinking like this has resulted in a come-back of sorts for national brands. During the 2010 to 2012 timeframe, national brands gained share in 40 percent of the largest CPG categories. And yet it's a complex picture, with private label gaining share across 60 of the 100 largest CPG categories, and these gains are cutting across many CPG aisles.
In its most recent Times & Trends Report, SymphonyIRI breaks out private label category growth into four quadrants:
Protecting Position: Top Categories with Above Average and Increasing Private Label Share
In 19 of the 100 largest CPG categories, private label is said to be protecting position. Penetration is in fact on the rise in many of these. Retailer efforts to raise the profile of their brands are clearly at play here. For instance, Publix recently encouraged trial with a promotion offering a free private label product with the purchase of one of five name brand counterparts.1
Up & Coming: Top Categories with Below Average and Increasing Private Label Share
In 41 of the 100 largest CPG categories, private label is said to be "up and coming." The category in this quadrant showing the largest private label jump hails from the snack aisles. While private label snacks' 12 percent share has largely remained flat during the past year, several snack categories, such as bakery snacks, are seeing private label share growth.
Brands Entrenched: Top Categories with Below Average and Declining Private Label Share
Even in 2009, at the depths of the recession, name brands were entrenched across a handful of the largest CPG categories. Brands are said to be entrenched when private label share is below average and on the decline. Today, brands hold an entrenched position in 32 of the 100 largest CPG categories.
Brands Taking a Stand: Top Categories with Above Average and Declining Private Label Share
Innovation and pricing are also helping national brands reclaim share across categories where private label share has been above average in recent years. In vitamins, for instance, the launch of Nature's Way Alive made a splash in 2011. And four vitamin launches achieved SymphonyIRI New Product Pacesetter status in both 2009 and 2010 studies.
1 - Store Brands Decisions, October 2, 2012
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