CPGmatters: Organic Products Change Perception of Store Brands
By Lynne Cooke
Through a special
arrangement, presented here for discussion is an excerpt of a current
article from the monthly e-zine, CPGmatters.
The introduction of high quality, store-brand
organic products has changed consumer perceptions of private label grocery
brands, according to results of a J.D. Power and Associates’ Private Label
In particular, consumer attitudes about many
store brands have shifted. Rather than being considered low-quality with
bland packaging, private label brands are being thought of as unique and
as having quality commensurate with that of traditional brands.
The report, conducted by the firm’s Web Intelligence
Division, found that the amount of online conversation about private label
products has increased steadily during the past year. Volume peaked last
fall as the economic crisis was unfolding.
While private label pricing motivates consumers,
the quality and flavor of organic products drive the highest levels of
positive sentiment. Private label food products from Safeway, Trader Joe’s
and Whole Foods received an especially high level of recommendations compared
with other private label brands, and are seen as being particularly healthful
The report, which was previewed at the IRI
CPG Summit in Las Vegas in February, also found that, among retailers included
in the report, Safeway and Whole Foods get consumer raves overall for their
mix of private label brands and categories.
“It’s clear that consumers have begun to discard
the idea that private label brands are of lower quality than traditional
brands, which provides an opportunity for retailers to differentiate themselves
with high quality, reasonably priced store brands,” said Janet Eden-Harris,
vice president of J.D. Power and Associates Web Intelligence Division.
Appreciation for non-food private label products
such as diapers, paper products and cleaning supplies was not as high as
that of food products. The report implied that these products are perceived
as commodities, and were purchased for their lower cost rather than as
a favored brand by itself.
“While retailers continue to gain ground with
their private label products, there is still enormous opportunity for consumer
packaged goods manufacturers,” said Ms. Eden-Harris. “Innovation is still
a big growth driver, and CPG companies still lead in that regard. New and
differentiated products that are priced to value will win market share.”
How has the introduction of upscale, organic products changed perceptions
of private label food products? In what other ways can retailers be
improving PL food’s reputation? Is there a similar opportunity in non-food