Despite some predictions by food industry market watchers that private label is set to take over, private label share of the packaged-food market has been relatively flat since 2008, and it stopped gaining in other categories in 2011. This leveling off suggests that food brands are able to withstand private label competition. Yet, we’ve found the story is more complex. The first clue is obvious to retailers: there is enormous variation in private label share at the category level. In some categories, such as milk, private label has 60% or more market share. In others, such as RTD coffee, canned ham and toaster pastries, private label has only 1% or 2% share.
The numbers belie reports about how beautifully private label is performing overall and reveal, instead, how the culture of brand shapes consumer receptivity by category. In Hartman Strategy’s report The Future of Private Label Food, our analysis of private label reveals four competitive performance segments in the private label food marketplace that illustrate the role of culture within categories:
Since the Obama administration entered the White House, first lady Michelle Obama has made it her personal mission to improve the health of America’s children by teaching them the importance of a balanced diet and an active lifestyle. Her Let’s Move campaign and non-profit group Partnership for a Healthier America have been working towards this goal for five years, and have started to turn the tide on America’s childhood obesity problem and the way food and beverage companies market to the country’s youngest consumers.
“Over the past five years we have truly changed the culture around health and living in this country,” Obama said in a keynote speech last week at the Partnership for a Healthy America Summit. “Food companies are racing like never before to create healthier versions of their products. Even convenience stores are selling fruits and vegetables. Head to the local drive-thru and kids’ meals might include apples and skim milk. (read more…)
Supermarkets have always had their share of bargain hunters, coupon clippers and shoppers in search of serious discounts, but digital technology is making it ever-easier for penny pinchers to leave the paper coupons and Sunday circulars behind while still finding the best deals. And, as the technology makes it easier for consumers to seek out the lowest prices, it also provides retailers with new opportunities to curry customer loyalty with price-matching programs that do the work and ensure that shoppers spend their savings in the stores.
U.S. food prices rose 3.4% from December 2013 to December 2014, according to the Consumer Price Index, and prices for food consumed at home jumped 3.7%. Prices are forecast to increase another 2% to 3% this year, and certain crops may see even bigger increases as a result of the ongoing drought in California. In Britain, food inflation has been falling and it’s on track to tumble further this year as oil prices fall and supermarket chains continue to slug it out for market share. (read more…)