Issue #11 of 24
June 3, 2023
PLMA’s 2023 "World of Private Label" International Trade Show, which was held May 23-24 at RAI Amsterdam, welcomed a record number of over 16,000 trade visitors from 120 countries worldwide. The numbers beat pre-pandemic levels and confirm that the private label industry is fully back in force.
Some 2,650 exhibiting companies from 72 countries presented thousands of products at the show. Exhibitors reported that, as usual at the PLMA show, visitor quality was impeccable. Many new contacts were made, meetings with existing partners took place and groundwork for future deals was laid.
Among the main attractions were also PLMA Idea Supermarket and New Product Expo, presenting one centralised display of private label innovation and new product development.
The event kicked off with the well-attended pre-show seminars on Monday May 22. For the current year 2023, private label is expected to grow with 2-3% points in Europe, with strongest growth in Eastern Europe. “PL is having a winning momentum, so now is the time to positively connect with your shoppers”, said Servé Muijres of GfK.
Both NielsenIQ and GfK confirmed Europe as the biggest market for private label, with a 34% market share. What’s more, across countries and across product categories, private label is still gaining market share.
In a presentation at the Show, Arjan Both of Walmart explained how the world’s largest retailer has been working on its strategy to build the most trusted and resilient supply chain. The company is very much open to doing business with European private label suppliers who are recognised globally for setting the bar.
PLMA’s next Lunch & Learn session will focus on helping beverage and food manufacturers. Titled "F&B Manufacturing in 2023: Obstacles, Outlook, and Producing Positive Outcomes," it will present actionable learnings from Rockwell Automation’s comprehensive "2023 State of Smart Manufacturing Report."
The session, starting at 12:30pm ET on June 8th, will provide key findings of the survey of more than 1,000 companies across 13 top manufacturing countries. Topics include workforce attraction and retention; digital technology adoption; supply chain disruptions; risk mitigation and regulatory demand, among others.
Gerry Abbey, analyst relations manager at Rockwell Automation, will be presiding over the session. With 14 years in software marketing, he brings thought leadership and deep content experience, as well as leading market and competitive intelligence.
In his role with Rockwell Automation’s 8th annual State of Smart Manufacturing Report, Gerry connects research to industry leaders and tests findings with analysts while looking for ways to improve products and messaging. He has a wealth of content experience, having written thousands of blog posts, white papers, reports and two books.
This will be PLMA’s sixth Lunch & Learn session in 2023. The first was conducted on January 26 and focused on growing private label sales and hosted by Kyle Patterson, Senior Vice President of Daymon. The 2d session was on February 2 with a review of store brand sales from 2022 by MaryEllen Lynch of IRI. The third was February 23 by Gary Stibel of The New England Consulting Group.
The fourth, reporting on ‘How America Eats,’ was on April 27 and the most recent, on May 11, discussed Circana’s new Unify+ sales data platform that's a benefit exclusively for PLMA members.
A report from Advantage Solutions says fewer price hikes are planned as vendors start to refocus on countering upsurge in grocery retailers’ private-label activity.
Retailers surveyed clearly indicated that private label will be their top strategy in tackling rising costs. Seventy-three percent of respondents plan to boost private-brand availability, while 57% aim to require higher margins on promotions. Forty-three percent are looking at increasing brands’ everyday low price and 25% at sharing cost hikes with vendor partners. Also, 60% of retailers are turning to their digital platforms and data assets for monetization opportunities.
In growing own brands, 97% of retailers said they plan line extensions, 94% new categories and 92% expansion of their premium labels, with 71% expecting to expand their lower-priced brands. Product categories slated to get more space this year to accommodate private brands, retailers reported, include frozen (45%), general food/grocery (41%), beverages (28%), home care (23%), refrigerated consumables (13%), health (12%), general merchandise (10%), beauty care (10%) and liquor (3%).
“Consumer packaged goods innovation is rising, list price increases are waning and retailers are focused on private-brand expansion,” Irvine, California-based Advantage Solutions stated in its Spring Outlook 2023 report. “The survey also found branded product manufacturers are responding to private-brand expansion by marketing the quality of their products and launching product innovation. Their top tool for remaining competitive is off-shelf merchandising, as trade promotion activity has inched up gradually since the COVID dip.”
Meanwhile, consumer packaged goods manufacturers are reining in pricing and shifting focus to product quality and innovation as grocery retailers ramp up private-label merchandising to draw cost-savvy shoppers, according to the report.
Some 28% of the manufacturers polled in March for Advantage Solutions’ “Manufacturer and Retailer Outlook Spring 2023” report plan list price hikes in the next six months, down from 46% in the December survey. Meanwhile, 35% of manufacturers said they aren’t planning any price increases, an increase from 28% in the December report.
During the company’s first quarter earnings conference call, John David Rainey, executive vice president and chief financial officer, said private brand penetration at the retailer’s U.S. store continues to increase for the third consecutive quarter. Walmart’s store brands grew 1.1% in the latest quarter, on the heels of growth of 1.6% in the fourth quarter and 1.3% in the third quarter.
“You’re seeing (private brand share) come up,” said Doug McMillon, Walmart’s CEO. “We have more influence over what's happening with private brands than we do with branded products.”
McMillon pointed out difficult economic times have been sending more shoppers to Walmart as they seek lower prices and, in addition, buy its store brands for the savings. Officials did not reveal which product categories are seeing the greatest growth in private brands.
In Walmart stores, the company reported, general merchandise sales declined while food and consumable sales increased by low double digits. Inflation in food and consumables was down more than 4% throughout the first quarter the company said. However, as prices remain high, customers are spending cautiously on discretionary categories.
As the retailer continues to navigate the challenging economic waters, its consolidated revenue in the first quarter was up 7.6% to $152.3 billion. Net sales in the U.S. were up 7.2% to $103.9 billion. Comparable store sales in Q1 were up 7.4%.
Advisers to the Food and Drug Administration on Wednesday unanimously endorsed making birth control pills available without a prescription, overriding concerns raised by the agency about whether the medication could be used without physician oversight.
In a 17-0 vote, the FDA’s outside experts concluded consumers could use an oral contraceptive called Opill correctly. They said increased access to contraception outweighed the risks, including a potential lack of adherence to daily pill-taking that could result in unintended pregnancies.
The move increases the likelihood that Opill, made by HRA Pharma, which is owned by the consumer health giant Perrigo, will become the first birth control pill available in the United States without a prescription.
Perrigo, who are seeking OTC status with no age restrictions, said millions of women have taken birth control pills for decades, proving them safe and effective. The company said its studies involving Opill showed that consumers could understand important information on the label, including who should and should not take the drug.
Despite the recommendation, FDA staffers raised concerns, including whether some women with breast cancer or other medical conditions would understand that they should not take the medication.
In the end, the outside experts showed strong support for allowing the progestin only Opill to be sold over the counter. Several said that whether a woman follows directions to take Opill in the same three-hour window daily does not depend on whether she gets it with a prescription.
The prospect of an OTC pill has not set off political and legal battles akin to those ignited by one of the abortion drugs, mifepristone, which is the target of a lawsuit by antiabortion medical organizations and doctors.
The FDA’s decision on the proposed OTC Opill is expected this summer or early fall. The ruling would not affect other birth control pills, but an approval might encourage other companies to seek nonprescription status, some supporters say.
United States organic food sales reached over $60 billion in 2022, according to the Organic Trade Association (OTA), highlighting continued growth for the category even during an inflationary period.
According to the OTA’s 2023 Organic Industry Survey, total organic sales, including organic nonfood products, were a record $67.6 billion. Organic product sales grew at a four percet rate, doubling the pace of growth in 2021.
Sales of organic produce totaled $22 billion, making it the largest subcategory and accounting for 15% of all fruit and vegetable sales in the U.S. Organic beverages were the second best-selling organic category, reporting $9 billion in sales in 2022, up 4% compared to 2021. Organic coffee was the best-selling organic beverage, up almost 7% from 2021 with close to $2.3 billion in sales. Organic soft drinks and enhanced drinks broke through $500 million in sales at $503 million and saw robust growth of almost 14%.
The third highest-selling organic category in 2022 was dairy and eggs, hitting $7.9 billion last year, an increase of over 7% from 2021. Organic dairy and eggs made up close to 8% of the total dairy and egg market according to OTA’s data. Organic yogurt sales jumped by over 12% year-over-year to $1.5 billion, and organic egg sales jumped 11% to around $1.2 billion.
“Organic has proven it can withstand short-term economic storms. Despite the fluctuation of any given moment, Americans are still investing in their personal health, and, with increasing interest, in the environment, and organic is the answer,” said OTA CEO Tom Chapman.
Kerry’s new 2023 Flavor Insights Report details which flavor profiles on the rise, helping retailers and manufacturers with developing new in-store menu items, prepared foods and private label snacks and beverages.
The categories examined in the report for new products included Hot Beverages, Cold Beverages, Savory Flavor, Sweet Items and Nutritional Flavor trends. Flavors were grouped into four categories: Mainstream (top flavors for the past five years), Key (verging on mainstream), Up-and-Coming (fastest-growing over the past three years) and Emerging (fastest-growing within the last year).
Soumya Nair, Kerry’s Global Consumer Research, and Insights Director said “Whether it’s a nostalgic treat, a comfort dish or a healthy alternative, consumers expect a greater variety of tastes in 2023. Our Flavor Insights provide an in-depth and concise analysis of the key flavors, ingredients and nutrition trends that will shape menu innovation over the coming year.”
In the Hot Beverage category, Kerry said the report found nostalgia to be a major trend, pointing to products like Lavender White Mocha Lattes and a Hot and Spicy Horchata as winning flavor profiles. In the Cold Beverage category, mixing-and-matching different flavors, including exotic and unique fruits like yuzu, apricot, prickly pear and more appeared as a growing trend in flavors.
For Savory Flavors, Kerry said many were focused on smoky, savory, and spicy flavors like Nashville Hot, habanero, Korean and tangy barbecue and more. Sweet Flavors highlighted in the report included salted caramel, dulce de leche, key lime pie, sea salt and more.
Kerry's emerging trends in the nutrition category included antioxidants, added energy, no alcohol, low sugar, no allergens, and keto-friendly as Up-and-Coming product attributes.
“Our research team follows trends in flavors and new menu products throughout the year in order to provide our foodservice customers with research-based recommendations that can help them to make winning menu decisions,” added Nair. “There is a lot of information out there, but Flavor Insights cuts through the noise to provide high-quality insights and market facts to chefs and product developers as they navigate a competitive and changing consumer landscape.”
The Supreme Court has upheld California’s right to forbid the sale of pork in the state unless producers abide by more humane regulations on the treatment of pregnant sows, which was required under its Proposition 12 law.
Justice Neil M. Gorsuch, writing for the majority in what boiled down to a 5-4 decision, rejected what he called a request by pork producers to fashion “new and more aggressive constitutional restrictions on the ability of States to regulate goods sold within their borders.”
“While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list,” Gorsuch wrote for a majority that included, at times, Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan, and Amy Coney Barrett.
Gorsuch wrote that pork producers must turn to Congress for relief from state laws they dislike. He added that “despite the persistent efforts of certain pork producers, Congress has yet to adopt any statute that might displace Proposition 12 or laws regulating pork production in other States.”
Four members of the court — Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito Jr., Kavanaugh and Ketanji Brown Jackson — dissented, voting in favor of keeping the challenge to the law alive and sending it back to a lower court for more work.
It’s uncontested that states can regulate pork raised within its borders. But Proposition 12, passed by nearly 63 percent of Californians in 2018, went further, banning the sale of products derived from pigs, no matter where they were raised, that are not allowed at least 24 square feet of space. California consumes about 13 percent of the nation’s total.
The decision could have far-reaching ramifications. If other states adopt similar laws not only for pork but for the rules of raising chicken, beef, or other animals, selling meat would become a complicated process for all companies.
Trader Joe’s CEO Dan Bane, who has been CEO for 22 years, will retire as of July 2, the company has announced. COO Bryan Palbaum, who has been with Trader Joe’s for more than 20 years, will take over as CEO starting July 2
“We are thankful for Dan’s leadership over the past 22 years,” Palbaum said in a statement. “Jon and I look forward to working with all crew members to continue to grow Trader Joe’s. We remain focused on providing customers with exciting products at great values while being true to the seven values that will continue to guide Trader Joe’s.”
Bane started with the company more than 25 years ago, and helped it become a national chain with over 540 stores in 42 states and the District of Columbia.
“I take great pride that together we have made Trader Joe’s the best grocery store in America,” Bane said in a statement to employees. “Thanks to all!”
Trader Joe’s was founded in Pasadena, California in 1967 by Joe Coulombe, who died in February 2020 at 89. He created a concept known for affordable gourmet treats and private-label items that differentiated the chain.
CVS Pharmacy is adding to its collection of eco-friendly Gold Emblem private label items with the release of aluminum-bottled water. The new water reinforces CVS’ goal to reduce single-use plastic in store brand packaging and use in operations by 50% by 2030. Available in three-packs or 20-ounce individual bottles, the new product is refillable and recyclable, BPA-free and made from 68% recycled aluminum material.
Natural Grocers is continuing to expand its private label offerings with new clean-label bath products. The retailer is introducing four scented varieties of Natural Grocers Brand Epsom Salt Bath & Foot Soaks. The varieties include Peppermint Muscle Soak, Lavender Relaxation, Tea Tree Foot Soak and Eucalyptus Everyday Cleanse.
The national convenience store Circle K has rolled out a new line of vino, introducing 13 different varietals. The Sunshine Bliss line of wines will be priced under $8 per bottle and will consist of seven different offerings: a Cabernet Sauvignon, a Pinot Grigio, a Chardonnay, a Moscato, Peach and Strawberry. The Fine Wines collection is currently available in more than 900 stores across 17 states and will expand more broadly this year.
California-based specialty retailer Gelson’s has unveiled its first collection of private label ice cream. Gelson’s Artisan Ice Cream features several flavors, including Vanilla Bean, Burgundy Cherry, Double Dutch, Butter Brickle, Chocolate Mint Flake, Mocha Almond Fudge, and Sea Salt Caramel. Founded in 1951, Gelson’s has 27 stores in Southern California.
GNC is expanding its collection of private label products that support brain function and mental well-being. Its three GNC Preventive Nutrition supplements help to improve focus and memory, stress relief and sleep support, along with a Beyond Raw gym supplement that aims to boost cognitive function. The new private label products are available now both in-store and online.
JCPenney is expanding its Frye & Co brand with a new collection of home products. The new line includes bedding, towels, throw pillows and blankets, and shower curtains, among others. The new Frye & Co’s items are based on a Western-inspired design, featuring denim and terracotta colors and patterns referencing the American Southwest.
According to Kantar, despite the reopening of bars and restaurants in the wake of the COVID-19 pandemic, at-home drinking is on the rise, while consumption outside of the home continues to fall. The trends suggest the alcohol market is still shifting in ways both related and not to the pandemic, with other factors like inflation proving impactful.
The report, “Shopping for Beverage Alcohol,” found that 23% of consumers drank more at home over the past 12 months, compared to 16% who drank more on-premises. Overall, however, consumers seem to be cutting back, with 21% reporting that they have had less to drink over the same period while at home, compared to 25% of those who drink at bars and restaurants reporting the same.
Not only are consumers, especially Gen Z and millennials, drinking out less, but they are also gravitating more toward products without alcohol. For example, 21% percent of Gen Z and 18% of millennials purchased nonalcoholic beer in the past 12 months. When drinking at bars, 21% of consumers reported that having a nonalcoholic option plays a major role in overall satisfaction. One reason behind the trend could be an increasing desire for good-for-you products.
What types of alcohol consumers are buying and their reasons are also shifting. Notably, ready-to-drink offerings and hard seltzers are increasing in popularity. For example, 33% percent of consumers are buying hard seltzer as opposed to other alcoholic beverages, while 37% are buying RTD cocktails. The findings could be indicative of the general increase in drinking at home, with RTD options seen as a convenient, cost-friendly alternative. Other beer alternatives also seem to be of growing interest, with 58% of consumers already buying or interested in buying soda-mixed drinks.
The report surveyed 2,000 consumers over the age of 21 who purchased alcohol in the past three months, with 52% of respondents were women and 48% men. The largest age demographic was millennials (38%), and the smallest Gen Z (8%).
Acosta Group has released a new study on the American consumer when it comes to snacking and candy. According to its survey, Acosta found 61% of higher income households choose healthy snacks over junk food, and of total snack buyers, 15% say it's important for snacks to be natural or organic.
According to the survey, 40% of shoppers say they've eaten a large bag of salty snacks in one sitting, and that percentage rose to 74% for Gen Z and 60% for Millennials. Another 43% of those surveyed say they're usually snacking at night, and 32% often snack as a meal.
When it comes to the types of snacks consumers are turning to, Millennials are large purchasers of frozen snacks and sides, granola and cereal bars, protein and nutrition bars and dried meat or jerky. Millennials also like snacking on-the-go, with 74% snacking at work and 63% snacking when traveling.
"We wanted to learn more about the shopper path to purchase by understanding when and why shoppers are snacking, as well as where and what they're buying on different occasions or shopping trips," said Kathy Risch, SVP of Consumer Insights and Trends at Acosta Group. "We discovered consumer shopping preferences and generational differences that inform how brands and retailers can best meet the needs of today's consumers."
The trend of healthy eating is a big part when choosing the types of snack products consumers want. According to the study, shoppers are choosing evenly between healthy snacks (49%) and "junk food" (51%), but 61% of higher income households choose healthy snacks. Of total snack buyers, 15% want only healthy and natural snacks.
For candy buyers, chocolate is preferred (82%) over non-chocolate, with 54% of shoppers saying they eat more candy than they should. Four in 10 are eating candy at least once a day, with Millennials and higher income households eating more. Citing high prices and health concerns, 30% of shoppers reported they are buying less candy than last year. Acosta also warned candy sales could be at risk due to the increased use of self-checkout, preferred by over 70% of Gen Z and Millennial shoppers. More than 25% of all candy sales occur at checkout.
With store brands continuing to show unprecedented growth in the first quarter of 2023, and economic concerns of consumers not abating, the private label market continues to be a phenomenon.
To capitalize on this, PLMA is preparing for its annual U.S. trade show, which is the largest event for store brands in North America. The show, with the theme ‘The Store Brands Phenomenon' will be held November 12-14 at the Donald E. Stephens Convention Center in Chicago.
"'The Store Brands Phenomenon' theme is appropriate in many ways," said PLMA President Peggy Davies. "Hailed as dynamic, innovative and pervasive, store brands offer boundless opportunities for retailers, manufacturers and trade suppliers."
The growth of store brands has been strong and steady. By the end of 2022, PLMA calculates that annual store brand sales had increased by 40% over a five-year period. Last year's double-digit gains continued through the first quarter of 2023 with 10.3%-dollar sales growth, according to Circana.
Sales and dollar and unit market shares are at all-time highs and the market could grow by nearly $10 billion in 2023 if sales continue their strong sales.
“This year’s PLMA Show will be unlike any other,” PLMA’s Vice President Anthony Aloia said about the show. “Private label continues to thrive and is expanding into more categories, chains and channels and bringing more companies and businesses into the industry.”
“First, there’s a resurgence of non-food suppliers, including experienced international PLMA Member manufacturers, representing all home, health, and wellness product categories. Next to be found at the Show will be products with desirable attributes consumers are seeking, such as healthy lifestyle foods and beverages or products using sustainable packaging,” Aloia explained.
“Burgeoning PL trends in ethnic foods, wine and spirits, plant-based and hemp-based foods, children’s snacks, foodservice, beauty and cosmetics, and kitchenware, will be highlights of the Show,” he added.
The 2023 Private Label Trade Show will also reflect this expansion as PLMA expects over 1,500 companies will be exhibiting and 5,000 individuals attending this year’s show.
For more information on "The Store Brands Phenomenon" trade show, contact PLMA at +1 212 972-3131, email email@example.com or visit www.plma.com.
The Private Label Manufacturers Association is the only trade association devoted exclusively to the private label industry. Founded in 1979, PLMA currently has over 4,000 member companies. Membership is open to manufacturers, brokers, trade suppliers and other companies. PLMA members enjoy exclusive access and discounted pricing to PLMA events and services. For more information about membership, please visit www.plma.com or contact Barbara Cruz at (212) 972-3131, EXT. 1225 or firstname.lastname@example.org.
F&B Manufacturing in 2023: Obstacles, Outlook, and Producing Positive Outcomes / June 8 / Rockwell Automation
Navigating the Retail Consolidation and Fulfillment Landscape / September 21 / Hub Group
Where do you go to learn about developing and marketing store brands. There are no MBA programs. It takes too long to learn the secrets of the trade as an apprentice. The answer for more than 1,900 graduates has been PLMA’s annual Executive Education Program.
Experience the Phenomenon!
Donald E. Stephens Convention Center