Private label is booming, and with the slow pace of economic recovery, we can expect this to continue for some time. Consumer habits – including having ‘downtraded’ to private label during tough financial times – are now ingrained. It’s unlikely that national brands will ever recover that lost ground.
This perfect storm is creating increasing opportunities for private label. This is good news for private label manufacturers and for the retailers because the direction of travel for private label is in trading-up consumers: and in so doing, retaining consumer loyalty while increasing prices to national brand levels.
My expectation is that at PLMA in May, manufacturers will be talking more about premium products, leading in product innovation and delivery of segmented, niche solutions for targeted markets. If not, then they are missing the economic opportunity of the whole generation. Manufacturers, take note: now is the chance to shift your business from being price driven to being value driven.
