Study: Private brands grow in popularity

CHICAGO Private lable usage has been growing over the last decade, according to The NPD Group. According to a new NPD report, last year, 24% of all food and beverages served in American homes were store brands, up from 18% in 1999. Today, 97% of all households consume private label foods on a regular basis.

“There is no question that private label foods have become an integral part of American life,” says Harry Balzer, chief industry analyst at NPD and author the report. “Furthermore, we do not hide private label foods as an ingredient or as an additive to another dish. Today over half of all store brand food eatings are the end dish.”

Price and value are the chief reasons why consumers purchase private label or store brands, according to an NPD survey of grocery shoppers, but most respondents also feel that the quality of store brands is often equal to, or in some cases better than, name brands.

“The bottom line is that private label foods can offer a great value to budget-minded consumers. If a consumer is working with less disposable income, stretching the food dollar and finding value will naturally gain importance,” says Dori Hickey, director of product management at NPD and author of the report. “Name brand and private label marketers will each need to focus on differentiating their products while finding ways to effectively address consumer needs, as the lines between the two are blurring in the minds of consumers."