Issue #24 of 24
December 17, 2022
During the first eleven months of the year, dollar sales increased by 10.6%, nearly twice the growth of national brands, which were up 5.8%, according to IRI.
In the month of November alone, store brand sales improved by 12.4% compared to the same period in 2021, while national brands were up 7.4%. So far this year, store brand dollar share is at 18.5%, and unit share is 20.1%. Based on the data, PLMA is projecting full year 2022 sales of store brands to reach $221 billion, which would be a $21 billion increase over 2021 and a new annual record.
The growth is significant because it is spread across the store and not limited to certain departments.
Looking at the 17 individual food and nonfood departments that IRI tracks for PLMA, over the trailing 52 weeks ending November 27, store brand sales were up in 16 of them, including double-digit increases in nine departments: Beverages, Deli Prepared, Liquor, Refrigerated, Floral, Bakery, Produce, General Food and Deli Meat. Tobacco was the only department that experienced a sales decrease.
In the two largest departments for store brands, - Refrigerated with $47 billion in sales; and General Food $38 billion, - the increases over the 52-week period were 15.3% and 12.3%, respectively.
Store brands also outperformed national brands in terms of unit sales. For the first eleven months of the year, unit sales slipped 1.3% but national brands dropped more than three times as much, off 4.3%.
For the month of November, store brands were nominally even at minus 0.8% while national brands gave up 4%. Such disparate results in unit sales are often seen as an indicator of shoppers switching to store brands from national brands.
PLMA’s popular Lunch & Learn live and online speakers’ program returns on January 26 and will focus on how to grow private label sales.
Titled “Managing and Growing Private Brand Sales on Existing Business,” the program will be hosted by Kyle Patterson, Senior Vice President of Daymon.
"Managing and growing existing business is a cornerstone for both manufacturers and their retail partners,” Patterson said. “Directing current business is an essential skillset that must be mastered and is an important part of a cycle which helps us demonstrate value. This, in turn, leads to new business opportunities and ensures our viability as an organization in future."
Lunch & Learn will be held online for 60 minutes starting at 12:30 PM EDT. The professional development program is complimentary for all PLMA member manufacturers, brokers, and suppliers as well as retailers and wholesalers.
In announcing third quarter earnings, Kroger highlighted the strong gains its store brands have made during the period.
Gary Millerchip, Kroger’s Senior Vice President and CFO said, “Our Brands continue to resonate deeply with customers, as sales grew 10.4% during the quarter. The outstanding quality and value offered by these exclusive to Kroger products is an important differentiator in our go-to-market strategy, and this is especially true during periods of high inflation,” Millerchip said. “Our Brands products are margin accretive and represent a key pillar in our strategy to grow profitability while also delivering greater value for customers.”
Kroger CEO and Chairman Doug McMullen echoed those sentiments.
“We continue to expand and diversify Our Brands portfolio at every price point. After launching Smart Way as our opening price-point brand last quarter, we introduced several new Smart Way products this quarter and plan to roll out additional products next quarter,” McMullen said. “These products are meeting the needs of our customers on a budget, and we’ve already seen 2 million households to purchase Smart Way products.”
Overall, Kroger launched 147 new own-brand items in the third quarter. These included holiday season products and plant-based, ready-to-cook meals, both under the Home Chef meal kit label. McMullen added Kroger’s Our Brands pet food products saw “tremendous growth.”
All sales for the quarter, which ended Nov. 5, climbed 7.3% to $34.2 billion, up from $31.8 billion a year earlier. Sales were up 6.4% year over year.
The US Food and Drug Administration announced that it is extending the comment period for the proposed rule to redefine the term “healthy” for use on food package labeling.
In a revision of the FDA’s original definition established in 1994, the proposed rule would require products labeled with the word “healthy” to contain a meaningful amount of ingredients from nutrient-dense food groups including fruits, vegetables, dairy, grains, protein, and oils.
The proposed rule, entitled “Food Labeling: Nutrient Content Claims; Definition of Term ‘Healthy,’” was announced on September 29.
As an example, the FDA said a cereal would need to contain a certain amount of whole grains and adhere to limits for saturated fat, sodium, and added sugars to include the “healthy” claim on its package.
The new deadline for comments is Feb. 16, 2023.
The FDA’s extension of the comment period was in response to a request from stakeholders to allow additional time for interested persons to develop and submit comments. Comments should be submitted to Regulations.gov and identified with the docket number: FDA-2016-D-2335.
According to a report from Placer.ai, Publix’s GreenWise Market, a chain of small-format specialty grocery stores, has generated more foot traffic at every location in Florida on a year-over-year basis even as visits to the retailer’s traditional supermarkets in the state have consistently declined by the same measure.
Shoppers also tend to stay longer in GreenWise stores than they do at standard Publix locations, Placer.ai found. The median time spent at the GreenWise location in Odessa, Florida, for example, was 28 minutes in the third quarter of 2022, while the comparable figures for three Publix stores located were 26, 25 and 24 minutes, according to the report.
Publix began the GreenWise format in 2018 and currently runs seven GreenWise stores and more than 800 traditional supermarkets in Florida.
While Publix’s GreenWise stores seem to be popular with customers, the retailer seems to have stepped up attention on expanding the number of traditional supermarkets and other avenues of growth.
GreenWise stores, which typically occupy around 25,000 square feet, have a heavy focus on organic and prepared foods and are aimed at “health-conscious and gourmet foodies alike,” according to Publix. The locations feature a variety of “experience zones” that focus on items like meats smoked in-store, sausages made on the premises, gourmet sandwiches and burrito bowls. The concept also incorporates an area where shoppers can buy wine, beer, or coffee to drink while they walk the aisles.
Supermarket chain Natural Grocers has shared its seventh annual Top Trends for 2023 list, which was created by the company’s Nutrition Education team.
Next year’s expected trends are focused on four categories: Health and Wellness, Body Care and Beauty, Food and Beverage and Ecologically Thoughtful.
Shelby Miller, MS, Natural Grocers' director of scientific affairs and nutrition education said "Though the COVID pandemic initially made its presence known almost three years ago, its lingering effects are still impacting how we approach our health and wellness, self-care and food preparation. Miller added “There is a big push among both consumers and brands to minimize waste and make every dollar count.”
"We've expanded our trends for the coming year to reflect how intricately this is all tied together and how our daily purchases and practices can shape our collective wellbeing and our ability to thrive and flourish long-term," Miller stated in a press release announcing the release of the list.
Walgreens is expanding its Same-Day Delivery program to now fulfill orders 24 hours a day. Most of its consumers across the U.S. will have access to more than 27,000 of Walgreens’ items for same-day delivery in as little as one hour.
“Walgreens knows that taking care of health and wellbeing isn’t exclusive to business hours and that needs can pop up at any time of day – that's why we’re always looking for ways to enhance the customer experience with convenient and trusted solutions,” said Stefanie Kruse, group vice president of Digital Commerce. “As the place customers turn to for their last-minute needs, we know they will find value in being able to access the items they need most, no matter the hour, right to their door.”
The new service comes to nearly 400 participating 24-hour Walgreens stores.
However, there will be some states where the Same Day Delivery program will not be available. They include Alaska, Colorado, Iowa, Maine, North Dakota, South Dakota, Utah, Vermont, West Virginia, and Wyoming.
Walgreens operates nearly 9,000 retail locations across America, Puerto Rico, and the U.S. Virgin Islands.
Kroger has announced it is adding more products to its Smart Way line, which includes household items and consumables. Kroger launched the private label line in the second quarter of 2022, and it has become popular with consumers. Smart Way selections include household staples such as bread, drinks and dish cleaner, and paper products for both the home and office.
Thrive Market has introduced a new line of private label products in partnership with the snack brand LesserEvil. The exclusive collection organic popcorn features five different flavors, which includes Himalayan pink salt, elote, olive oil, among others. In addition to its new and unique flavors, the organic collection is created with sustainable packaging.
Health food chain Mother’s Market and Kitchen has redesigned, relaunched, and expanded its line of natural & organic products. The range of Mother’s Market Retail-owned Brand items are sold in Mother’s Market store locations across Southern California. New products are also expected to be introduced into the chain’s 11 stores in the coming months.
Trader Joe’s has released several new products, including Trader Joe’s Boozy Macaroons with flavors like premium rum, French XO brandy, and Cointreau triple sec liqueur. For the holidays, the company has also unveiled Trader Joe’s Jingle Jangle Pretzel Twists, which feature candy as an added ingredient, and Trader Joe’s Truffley Soy Sauce with Natural Truffle & Mushroom Flavors.
According to a report from 84.51°, a growing number of shoppers are more willing to switch to store brands as concerns over their finances continue.
The report from Kroger’s retail data and insights company examined how consumers are feeling financially heading into the holiday season, and what their plans are for shopping and spending.
Shoppers both below and above the $100k household income threshold are switching to lower cost products, including private label brands, to save money.
Of those making less than $100k per year, the top categories that shoppers were willing to “trade down” in were personal care (44%), beauty care (44%), cereal (43%) and health care (36%). For those making more than $100k, the top categories were the same, but the percentage of those willing to switch brands was smaller.
According to 84.51°’s research, 69% of shoppers cited concern about inflation, and 28% of consumers felt uncomfortable about their finances. That is a number that has grown steadily since February.
Among all consumers, 55% cited price as the most important factor when it comes to holiday grocery shopping. Quality was cited by 39% of those surveyed, and quantity/size by 34%. A majority (63% under $100k per year and 56% over $100k per year) said they did not plan on splurging on groceries this holiday season.
All income groups agreed that switching to less expensive brands, setting a budget, and simplifying holiday menus were some of the best ways to save during the holidays.
In the latest feature for PLMA’s e-Scanner, Editor-in-Chief Tom Prendergast examines PLMA’s exclusive IRI/Unify sales data. He examines the data to see which categories and products are showing growth and opportunities for PLMA members and retailers.
In early January 2023, the full 52-week IRI Unify numbers for store brand sales will be available to PLMA members and qualified retailers on plma.com and the industry will see exactly how it fared last year.
As told in our lead story, over the first 11 months of the year, store brand dollar sales increased by 10.6%. So far this year, store brand dollar share is at 18.5% while unit share is 20.1%. Based on the data, PLMA is projecting full year 2022 sales of store brands to reach $221 billion, which would be a $21 billion increase over 2021 and a new annual record.
But what categories will show the most dollar sales growth for 2022? Here is a sneak peek at how some of IRI Unify's 317 categories have grown over the past 11 months, as of November 27.
Sales increases among food products are particularly strong. Bottled Water rose 22.8% and reached $6.7 billion in private label sales while sales of Cookies increased 18.3%, hitting sales of just under $2 billion over the past 11 months. Fresh Eggs (up 49.6%), Butter and Butter Blends (26.6%), Shortening and Oil (26.5%), Hot Cereal (21.5%) and Cold Cereal (17.7%) are also on track for robust growth for FY 2022.
Store brand growth is not limited to food. Hair Appliances (up 122.7%), Drinkware (75.7%), Skin Care (23.6%), Laundry Detergent (17.9%), and Antifreeze (16.2%) were just some of the multi-million-dollar categories with double-digit store brand growth.
Large non-food categories like Disposable Tableware have reached nearly $2 billion in sales and rose 15.2% in dollar sales. Toilet Tissue had just under $3 billion as its private label dollar sales grew 14.8%. Pet products were another bright spot over the past 11 months: Cat and Dog Litter (up 18.8%), Pet Treats (19.5%), and Pet Food (16.8%).
IRI Unify's monthly data detailing the status of store brand and national brand dollar and unit sales in 317 categories and 967 subcategories is always available to members and qualified retailers at plma.com.
The global private brand industry will again meet at PLMA’s “World of Private Label” International Trade Show at the RAI Exhibition Centre, Amsterdam, May 23-24.
In all, some 25,000 professionals from more than 120 countries are expected to participate. Exhibitors will be joined by retailers, wholesalers, importers, and others, to examine products, strengthen partnerships, identify innovation in business practices and plan for profitable store brand growth.
Products on display at the Show will include fresh, frozen and refrigerated foods, dry grocery, and beverages as well as non-food categories, including cosmetics, health and beauty, household and kitchen, auto aftercare, garden, and housewares & DIY. The show will also present more than 2,500 exhibiting companies including 50 national and regional pavilions.
For more than 35 years, PLMA’s annual “World of Private Label” International Trade Show has brought retailers and manufacturers together to help them find new products, make new contacts, and discover new ideas that will help their private label programs succeed and grow.
In the past year, private label has increased its strong position throughout all markets. The future looks to be bright for store brands as retailers expand internationally and take a larger role in marketing themselves and the products that they sell.
In the coming year, PLMA plans to hold a series of events designed to help members and retailers with their businesses. This will include four of PLMA’s popular Lunch & Learn sessions in addition to PLMA’s 2023 Annual Meeting & Leadership Conference in Orlando, Florida on March 22-24, and PLMA’s Executive Education Program at St. Joseph’s University in Philadelphia, June 20-21.
The first Lunch & Learn online program in 2023 will be held January 26th and is titled “Managing and Growing Private Brand Sales on Existing Business.” It will be presented by Kyle Patterson of Daymon.
PLMA’s second Lunch & Learn program is titled “Consumer Demand for Private Brands: A Look Back and a Look Ahead.” MaryEllen Lynch of IRI will be the host and presenter of the program on February 2nd.
On February 23rd, Gary Stibel of the New England Consulting Group will talk about “The Private Label Advantage (Game, Set, Match).” He will address how marketing and advertising have changed and how digital media can help retailers and private brands.
The final Lunch & Learn will be presented on April 27th by Elizabeth Horvath of North America Kerry. It is titled “How America Eats” and will focus on the changing food habits of Americans and how it is impacting manufacturers and retailers.
All Lunch & Learn sessions will be held via Zoom from 12:30-1:30pm EDT. This program is complimentary for all PLMA member manufacturers, brokers, and suppliers as well as retailers and wholesalers. For non-members, the cost is $49.
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