Consumers are starting to turn their eyes toward more billfold-friendly private brands, a new study suggests. The Food Industry Association’s 2022 Power of Private Brands report shows that 40% of American consumers have bought more private brands since before the pandemic, and nearly 75% of these shoppers plan to continue taking this route. The majority of private brands shoppers – 63% – think that private brands are a good value, and 55% buy private brands because they are less expensive.
The study also showed that while price is important, there are other factors driving consumer affinity for these products, including quality, taste, sustainability, and healthiness.
“While we know price and out-of-stocks have led consumers to try more private brands, we’re seeing these factors aren’t the only reasons shoppers continue to purchase private brand products,” said FMI’s Vice President of Industry Relations Doug Baker. “Less than 2% of shoppers say the only reason they purchase private brands is because other products were out of stock. When asked about 14 product attributes, shoppers identified an average of four reasons for choosing private brand products. Clearly shoppers’ interest in private brand products extends beyond just price.”
Taste and quality rules the reasons
The old-line knock on private brand foods is that they simply didn’t taste good, but as Costco, Trader Joe’s, and ALDI made their way onto the grocery scene, they brought quality and sophistication that shoppers hadn’t seen before on the store brand aisle, said Jeff Wagoner, CEO of Ontdek, a company specializing in private labels.
Wagoner says that the more traditional supermarket formats have been dragging their heels in following this trend. “To these retailers, cost ahead of quality has always been [a] marketing stratagem to follow, but are now beginning to see the opportunity to improve on their bottom line by improving on what they offer on the shelf! Even the Dollar Segment, which for years has embraced a ‘cost first’ approach to marketing food items, is beginning to see ways to draw a new customer demographic into their stores, by offering good store brand food products at a good value.”
The Food Industry Association's study suggests that effort has paid off handsomely. Now, close to half (42%) of shoppers who are opting for private brands say they like the taste of private brand products. “When it comes to taste and quality, shoppers clearly see private brands as a good option, on par with national brands,” added Baker.
What products hit – or miss – the taste target?
There are some private label items where price may be king, but quality doesn’t hit the mark. To find out which ones don’t, The Healthy consulted food and nutrition pros about when they won’t deviate from a favorite brand, and why.
Topping the list was peanut butter. “For the most part, generic brands are equally nutritious and lower in cost,” registered dietitian Jennifer McDaniel told The Healthy, but if you read the nutrition labels carefully, some products vary widely in their specific ingredients. “Some generic peanut butters have unhealthy, unnecessary additives such as added sugars or extra fat from nonsustainable resources like palm oil,” she said.
Another item is tomato sauce. For those who wonder how bad store brand tomato sauce can be, McDaniel said it depends on how the sauce is going to be used.
“Products like pasta sauce, marinara sauce, or plain tomato sauces that use high-quality tomatoes and spices with good olive oil tend to taste better and require less added sugar and sodium,” said McDaniel, adding that store-branded versions might be better suited for things like stews and soups that call for smaller amounts of tomato sauce.