The growing importance of private label grocery brands

In the middle of the 2008 recession, the U.S. market share of private-label grocery products had its biggest increase ever. Food brands are continuing to respond to private label grocery brands and according to CB Insights, retailers are increasingly developing their own private label brands in order to better compete with Amazon and other online competitors.

*visuals provided by CB Insights

Food brands are reacting to this new reality by going directly online to consumers and making access to products more convenient for the customer. In 2018, the innovation required by food brands has never been greater. Big food companies are increasingly investing in early-stage startups through newly created investment entities.

*visuals provided by CB Insights

E-commerce Platforms

E-commerce platforms are following the private label path and tech platforms are helping to move food brands online. According to CB Insights, companies like BigCommerce ($164 million in funding) and Magento ($250 million in funding) are giving food brands all-in-one solutions to set-up e-commerce platforms.

Consumer Packaged Goods

According to CB Insights, CPG brands are learning about alternative distribution to grocery stores. Since 2017, several major traditional food brands have invested in startups that give brands direct access to consumers through home delivery. Nestle acquired meal delivery company, Freshly, while Smithfield invested $25 million into meal kit, Chef’d. New offline strategies are on track to replace the retailer’s position by providing more convenience to consumers through delivery.

*visuals provided by CB Insights

Americans’ loyalty to established brands is starting to diminish as younger consumers pass over big brands in rejection of long-list ingredient labels. Kroger launched its Simple Truth house brand, a line of products that doesn’t include 101 ingredients Kroger identified as being concerning to its customers. In 2015, Simple Truth had $1.5 billion in sales.

Is your food company keeping up with the rapid pace of change demanded by today’s consumers? It’s never been more important to keep abreast of these changes and respond appropriately to these trends, as it directly affects your future business.

By | 2018-07-23T21:10:36+00:00 July 23rd, 2018|Uncategorized|0 Comments

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