Why private-label has reached tipping point

Kroger generated US$2bn in sales from Simple Truth organic private-label in 2017

The major, branded CPG operators in the U.S. are not only facing a challenge from growing demand for products for upstart, agile competitors tapping into evolving consumer trends. They are also, Victor Martino warns, seeing another front open up from private-label.

In his latest column for just-food, Martino outlines which retailers are gaining ground and how brand owners can fight back.

The biggest threat to manufacturer CPG brands in the U.S. today, particularly to the big guys who have everything to lose, is that retailer - or store-brand, private-brand, private-label, generic, proprietary, own-brand; pick your term - brands are simply becoming brands.

Historically in the US, private-label CPG brands (the oldest of the numerous terms) were merely low-priced knock-offs of the top-selling brands in various categories. Little effort went into product quality or packaging.

No frills and low-price were all that mattered. That's no longer the case today.

Store-brand innovators like Trader Joe's, Kroger, Albertsons, Costco and Whole Foods -- joined most recently by Walmart and German grocery chains Aldi and Lidl - have changed the store-brand paradigm from private-label brands to simply brands.

All these retailers are creating and offering...

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thumbnail courtesy of just-food.com

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