Private-Label Products Helping Many Americans Make Ends Meet At The Grocery Store

Nevin Barich

Nevin Barich

LOS ANGELES , October 31, 2017 () – A larger number of Americans are still struggling to afford groceries and are thus increasingly relying on private-label products to help ease the burden.

At least that’s according to a new survey from IRI, which found that 31% of U.S. households were struggling to make ends meet in the third quarter, the same percentage year-over-year but up from 28% in the first quarter of 2016. As a result, consumers are continuing to rely on private-label products to make ends meet.

The survey also found that younger and less-wealthy shoppers are struggling more than others. Fifty-nine percent of consumers from households earning under $35,000 per year and 36% of millennials are having difficulty affording groceries. As a result, 89% of these lower-earning shoppers and 90% of millennials are buying private-label brands to save money. Additionally, 81% of lower-earning shoppers and 83% of millennials will try lower-priced brands to save money, compared with 73% of all consumers.

“It is no secret that consumers are interested in CPG products that address their wants and needs,” said Susan Viamari, vice president of Thought Leadership for IRI. “When you look at the uncertainty and financial hardships that many consumers are facing and couple it with their favorable attitudes about the value and quality of private label products, it all adds up to a positive outlook for private label success. In fact, value is playing a huge role in the ‘want equation,’ and consumers will buy different brands, including private label solutions, to get the value that they want.”

The survey found that seven out of 10 millennials prefer stores that have a wide selection of private label products, while 76% often buy private label options over name brands. The appeal isn’t limited to younger shoppers; consumers from all generations—millennials, Gen Xers, baby boomers and seniors—view private-label products as a way to save money and improve value without sacrificing quality.

Major hypermarkets and food retail stores are adjusting to this landscape of increased private-label popularity. Costco, for example, is focused on driving private-label penetration from the current rate of about 25% of sales to 37% of sales, with its radar on Kirkland Signature natural and organic products and increased scope of co-branded products. Also, by 2022, major private-label players Aldi and Lidl could have a combined 10% of grocery share.

With many Americans continuing to struggle to make ends meet, look for them to keep looking to private-label products to lend a helping hand.

Nevin Barich is the Food and Beverage Analyst for Industry Intelligence and is also Menuism’s fast food expert. Email him at Nevin.Barich@industryintel.com or follow him on Twitter.

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