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The U.S. Market for Private Label Foods and Beverages

Packaged Facts
July 1, 2003
115 Pages - SKU: LA854487

Attention: There is an updated edition available for this report.

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Countries covered: United States

The U.S. Market for Private Label Foods and Beverages

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The private label offering of the vast majority of American grocery retailers has traditionally been small, particularly compared with their counterparts in other Western economies such as the UK and France. Shoppers have traditionally considered "store brands" to be lower quality - albeit lower priced - alternatives to the major brands they’ve known and purchased over time.

But this picture is changing, and consumers are showing a much greater willingness to buy private label, and at the same time a new kind of offering has appeared in a significant number of food and beverage categories: the premium quality private label product. By offering higher quality products, but with the same value pricing, private label marketers have had great success luring consumers away from the national brands, and toward the private label goods they would once have snubbed. The result is a win-win situation for retailers: increasing prices drives sales in products for which advertising expenditure is either zero or very small, and which offer a considerably higher margin.

The U.S. Market for Private Label Foods and Beverages, a new report from Packaged Facts, examines the market factors driving the growth in private label to $118 billion in 2002. The report analyzes shifting demographic and economic factors that are creating a more hospitable environment for private label marketers - and creating new challenges for "name brand" marketers that are witnessing their foothold in the market slip.

Report Methodology
The information in The U.S. Market for Private Label Food and Beverages is based on both primary and secondary research. Primary research involved on-site examination of the retail milieu, interviews with marketing, public relations and industry analysts within the private label food and beverage market and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature. Packaged Facts has derived mass merchandiser sales figures from Information Resources, Inc. (IRI) InfoScan sales-tracking data. The analysis of consumer demographics derives from Simmons Market Research Bureau survey data for fall 2002. New product information is gathered via literature research, personal interviews and data compiled by ProductScan, a service of Marketing Intelligence Service Ltd.

The report looks at every segment of the private label food and beverage market, examining trends for growth and projecting sales of products through 2007. It analyzes consumer demographics and their current and projected impact on sales of private label products. It provides up-to-date competitive profiles of manufacturers and distributors of marketers of store brand products - including a look at smaller, up-and-coming companies - and discusses the influence of demographic trends as a driver of retail trends. The report also spotlights new products and current distribution trends, and offers readers trends and marketing opportunities within the private label food and beverage industry.

What You’ll Get in this Report
The U.S. Market for Private Label Foods and Beverages is a brand-new report that offers a unique perspective on the burgeoning market for private label foods and beverages. No other market research report provides both the comprehensive analysis and extensive data that The U.S. Market for Private Label Foods and Beverages offers. The report addresses the following segments:

The Market (including market size and composition, and projected market growth)
The Marketers (including discussions of specific marketer brand and market shares)
Competitive Profiles (of the mainstream private label marketers, specialists and up-and-coming niche players, and analyses of the products they market)
Retail and Distribution Strategies
The Consumer (who’s buying what, and where)
The Products
Trends and Opportunities

Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

Scroll down to see a more detailed outline of the contents of this report.

How You Will Benefit from this Report
If your company is already competing in the private label food and beverage market, competes against store brands, or is considering making the leap into the business, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for private label products, as well as projected sales and trends through 2007. Contributing to that understanding will be a complete analysis of sales data from IRI and other published and trade sources, a detailed discussion of the consumer for private label products based on Simmons data.

This report will help:

Marketing Managers identify market opportunities and develop targeted promotion plans for private label products
Research and development professionals stay on top of competitor initiatives and explore demand for products in the private label arenas.
Advertising agencies working with clients in private label food and beverage industries to help understand the product buyer to develop messages and images that compel consumers to purchase these products.
Business development executives understand the dynamics of the market and identify possible partnerships.
Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.

Chapter 1: Executive Summary

Scope and Methodology
Market Parameters
Report Methodology
Simmons Market Research Bureau
Information Resources, Inc.

The Products

Two Broad Segments, Many Different Categories
Evolution and Recent Growth of Private Label in the U.S.
Innovations in Packaging

The Market and Market Dynamics

2002 Sales Near $119.0 Billion
Sales to Reach $151 Billion by 2007
Table 1-1: U.S. Retail Sales of Private Label Food and Beverages, 1998-2007
Table 1-2: CAGR for Private Label Food and Beverages, 1998-2007
Figure 1-1: U.S. Retail Sales of Private Label Food and Beverage Products, 1998-2002
Market Size by Product Category
Factors Affecting Market Growth for Private Label Food and Beverages
Figure 1-2: U.S. Retail Sales of Private Label Food and Beverage Products, 2003-2007

Market Dynamics

Store Brands Go Premium
Retailers See Growth in Organic
Courting the Hispanic Market

The Consumer

Nutritional Value Less Crucial
Toward Building Loyalty
Table 1-3: A Demographic Snapshot of the Private Label Buyer
Simmons Consumer Survey
Table 1-4: Percent of Consumers Who Use Private Label Food and Beverage Products By Product Type

Distribution and Retail

Evolution of the Private Label Supply Chain
Developments in the Traditional Supply Chain
Private Label E-procurement
E-Commerce DSD Opportunities Provide Retailers and Manufacturers With Profit Growth
Retail
Store Brand, Store Loyalty

Chapter 2: The Market

Market Size and Growth
Total Market Size
Table 2-1: U.S. Sales of Private Label Food and Beverage Products, 1998-2002
Overall Market and Selected Categories Examined Separately
Figure 2-1:U.S. Retail Sales of Private Label Food and Beverage Products, 1998-2002
Bottled Water Up 18.8% to $959 Million
Table 2-2: U.S. Retail Sales of Private Label Bottled Water, 1998-2002
Carbonated Beverages Down 2.5%
Chocolate Candy Sales Higher than 1998
Table 2-3: U.S. Retail Sales of Private Label Carbonated Beverages by sub-category, 1998-2002
Table 2-4: U.S. Retail Sales of Private Label Chocolate Candy, 1998-2002
Table 2-5: U.S. Retail Sales of Private Label Seasonal Chocolate Candy, 1998-2002
Coffee Sales See Dramatic Growth in Shrinking Overall Market
Table 2-6(a): U.S. Sales of Private Label Coffee Products: Additives, Ground, Ground Decaffeinated, 1998-2002
Table 2-6(b): U.S. Sales of Private Label Coffee: Instant, Whole Bean, 1998-2002
Cold Cereal Makes Comeback
Table 2-7: U.S. Sales of Private Label Cold Cereal, 1998-2002
Figure 2-2: U.S. Sales of Private Label Cold Cereal, 1998-2002
Private Label Cookie Sales Down to $577 Million
Table 2-8: U.S. Sales of Private Label Cookies, 1998-2002
Figure 2-3: U.S. Sales of Private Label Cookies, 1998-2002
Cottage Cheese Sales Grow Modestly
Fresh Bread Continues to Expand Market Share
Table 2-9: U.S. Sales of Private Label Cottage Cheese, 1998-2002
Figure 2-4: U.S. Sales of Private Label Cottage Cheese, 1998-2002
Table 2-10: U.S. Sales of Private Label Fresh Bread, 1998-2002
Frozen Dinners Sales Still Growing - Reach $169 Million in 2002
Table 2-11: U.S. Sales of Private Label Frozen Dinners, 1998-2002 Frozen Juices
Table 2-12(a): U.S. Sales of Private Label Frozen Juices: Apple, Blend, Cocktail Mixes, 1998-2002
Table 2-12(b): U.S. Sales of Private Label Frozen Juices, 1998-2002
Table 2-12(c): U.S. Sales of Private Label Frozen Juices, 1998-2002
Hot Cereal Sales Reach $214 Million
Table 2-13: U.S. Sales of Private Label Hot Cereal, 1998-2002
Figure 2-5: U.S. Sales of Private Label Hot Cereal, 1998-2002
Margarine
Table 2-14: U.S. Sales of Private Label Margarine, 1998-2002
Flavored Milks Only Growing Product in Milk Category
Table 2-15(a): U.S. Sales of Private Label Milk Products by Product Type, 1998-2002
Table 2-15(b): U.S. Sales of Private Label Milk Products by Product Type, 1998-2002
Sales of Natural Cheese Reach $2.23 Billion
Table 2-16(a): U.S. Sales of Private Label Natural Cheese, 1998-2002)
Table 2-16(b): U.S. Sales of Private Label Natural Cheese, 1998-2002
Non-Chocolate Candy
Table 2-17(a): U.S. Sales of Private Label Non-Chocolate Candy, 1998-2002
Table 2-17(b): U.S. Sales of Private Label Non-Chocolate Candy, 1998-2002
Table 2-17(c): U.S. Sales of Private Label Non-Chocolate Candy, 1998-2002
Refrigerated Breakfast and Dinner Entrees
Table 2-18(a): U.S. Sales of Private Refrigerated Entrees, 1998-2002
Table 2-18(b): U.S. Sales of Private Refrigerated Entrees, 1998-2002
Refrigerated Lunch Sales Dwindling Fast
Table 2-19: U.S. Sales of Private Label Refrigerated Lunches, 1998-2002
Figure 2-6: U.S. Sales of Private Label Refrigerated Lunches, 1998-2002
Modest Growth in Sour Cream Category
Table 2-20: U.S. Sales of Private Label Sour Cream, 1998-2002
Figure 2-7: U.S. Sales of Private Label Sour Cream, 1998-2002
Yogurt Sales Grow Dramatically to $392 Million
Table 2-21: U.S. Sales of Private Label Yogurt and Yogurt Drinks 1998-2002
Factors to Market Growth
Projected Market Growth
Table 2-22: U.S. Sales of Private Label Food and Beverage Products, 2003-2007
Figure 2-8: U.S. Sales of Private Label Food and Beverage Products, 2003-2007
Bottled Water
Table 2-23: U.S. Sales of Private Label Bottled Water, 2003-2007
Carbonated Beverages
Table 2-24: U.S. Sales of Private Label Carbonated Beverages, 2003-2007
Chocolate Candy
Table 2-25: U.S. Sales of Private Label Chocolate Candy, 2003-2007
Coffee
Table 2-26: U.S. Sales of Private Label Coffee, 2003-2007
Cold Cereal
Table 2-27: U.S. Sales of Private Label Cold Cereal, 2003-2007
Cookies
Table 2-28: U.S. Sales of Private Label Cookies, 2003-2007
Cottage Cheese
Table 2-29: U.S. Sales of Private Label Cottage Cheese, 2003-2007
Fresh Bread
Table 2-30: U.S. Sales of Private Label Fresh Bread, 2003-2007
Frozen Dinners
Table 2-31: U.S. Sales of Private Label Frozen Dinners, 2003-2007
Frozen Juices
Table 2-32: U.S. Sales of Private Label Frozen Juices, 2003-2007
Hot Cereals
Table 3-33: U.S. Sales of Private Label Hot Cereals, 2003-2007
Margarine
Table 2-34: U.S. Sales of Private Label Margarine, 2003-2007
Milk
Table 2-35: U.S. Sales of Private Label Milk, 2003-2007
Natural Cheese
Table 2-36: U.S. Sales of Private Label Natural Cheese, 2003-2007
Non-chocolate Candy
Table 2-37: U.S. Sales of Private Label Non-Chocolate Candy, 2003-2007
Refrigerated Entrees
Table 2-38: U.S. Sales of Private Label Refrigerated Entrees, 2003-2007
Refrigerated Lunches
Table 2-39: U.S. Sales of Private Label Refrigerated Lunches, 2003-2007
Sour Cream
Table 2-40: U.S. Sales of Private Label Sour Cream, 2003-2007
Yogurt
Table 2-41: U.S. Sales of Private Label Yogurt, 2003-2007

Chapter 3: The Consumer

More Consumers Turning to Private Label
Nutritional Value Less Crucial
Toward Building Loyalty
Table 3-1: A Demographic Snapshot of the Private Label Buyer
Factors That Influence Private Label Purchases
Targeting Ethnic Shoppers
The Products That Count
Figure 3-1: Percentage of Shoppers Who Select Private Label or National Brand Products

The Private Label Consumer

Simmons Data on Private Label Foods and Beverages
Table 3-2: Percent of Consumers Who Use Private Label Food and Beverage Products by Product Type, January 2002-September 2002
Dairy (Cream Cheese, Sour Cream and Cheeses)
Table 3-3: Demographic Characteristics Favoring Purchase of Cheeses: Cream Cheese, Sour Cream
Table 3-4: Demographic Characteristics Favoring Purchase of Cheeses: American Cheese, Other Cheeses
Cookies
Table 3-5: Demographic Characteristics Favoring Purchase of Cookies
Cereals
Table 3-6: Demographic Characteristics Favoring Purchase of Cereals: Cold Cereals v. Hot Cereals
Margarine and Butter
Table 3-7: Demographic Characteristics Favoring Purchase of Margarine and Butter:
Carbonated Beverages
Table 3-8: Demographic Characteristics Favoring Purchase Carbonated Beverages: Cola vs. Other Regular Carbonated Beverages
Table 3-9: Demographic Characteristics Favoring Purchase of Carbonated Beverages: Diet Cola vs. Other Diet or Sugar Free Carbonated Beverages
Juices
Table 3-10: Demographic Characteristics Favoring Purchase of Orange Juice and Other Fruit Juices

Chapter 4: Market Dynamics

Retailers and Manufacturers
Challenging the Big Names
Behaving Like the Big Names
Store Brands Go Premium
Retailers See Growth in Organic
Courting the Hispanic Market
Table 4-1: U.S. Retail Sales/Market Shares of Select Products; Leaders and Private Label, 2002

Competitive Profiles: Retailers

Albertson’s, Inc. (Boise, Idaho)
Company Overview
Streamlining Operations and Opening New Markets
Albertson’s Private Labels
A New Premium Line
BJ’s Wholesale Club (Natick, Massachusetts)
Company Overview
Private Label at BJ’s
Costco Companies (Issaquab, Washington)
Company Overview
Costco Private Label
Harris-Teeter (Charlotte, North Carolina)
Company Overview
Private Label Dynamism
Kmart (Troy, Michigan)
Company Overview
Kmart History of Private Label Goods
Kroger Co. (Cincinnati, Ohio)
Company Overview
A Leader in Private Label
Safeway Stores (Pleasanton, California)
Company Overview
Integration of group through Private Label
A Role Model for Private Label Retail
Target Corporation (Minneapolis, Minnesota)
Company Overview
Private Label at Target
Boosting Food Sales
Trader Joe’s (Monrovia, California)
Company Overview
Gourmet Goods at Low Prices
Wal-Mart (Bentonville, Arkansas)
Company Overview
Wal-Mart: Brand of Brands?

Competitive Profiles: Private Label Manufacturers

Bake-Line Group LLC (Oakbrook Terrace, Illinois)
Company Overview
George Soros Backs Bake-Line’s expansion
Cliffstar Corporation (Dunkirk, New York)
Company Overview
Disappointing Acquisition of Northland’s Private Label Wing
ConAgra Foods (Omaha, Nebraska)
Company Overview
Year-on-Year Success
ConAgra Brands
Cott Corporation (Toronto, Canada)
Company Overview
Malt-O-Meals (Minneapolis, Minneapolis)
Company Overview
Private Label at Malt-o-Meals
Ralcorp Holdings (St. Louis, Missouri)
Company Overview
Growing Through Acquisitions
Schreiber Foods, Inc. (Green Bay, Wisconsin)
The World of Cheese
Growth Through Acquisition

Chapter 5: New Products and Product Trends

Consumer Products Segment
Different Private Label Markets
Evolution of the Market
Why The Change?
Product Breakouts and Failures
Food
Bakery
Candy
Seasonal Candies Fall Short
Cereal
Dairy
Eggs Show Promise
Sour Cream A Highlight
Frozen Meals Heat Up Private Label
Refrigerated Meals
Beverage Categories
Bottled Juices
Bottled Water
Carbonated Beverages
Coffee
Milk

Chapter 6: Distribution and Retail Overview

Two Distinct Supply Chains in Private Label
Conventional Retail Distribution
Developments in the Traditional Supply Chain
Private Label E-procurement
E-Commerce DSD Opportunities Provide Retailers and Manufacturers With Profit Growth
Distribution Refinements Could Bring Increased Profits
Larger Retailers Demand More From Manufacturers
Food Brokers
Many Different Kinds of Private Label Retailers
Store Brand, Store Loyalty
New Customers for Private Labelers
Retailers Know More About Consumers

Chapter 7: Trends and Opportunities

General Growth Trends
Diversify Product Lines
Offer a Variety
Give It Away (or at Least a Taste)
Rethink The “Typical” Customer
Take Private Label Competition Seriously

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The U.S. Market for Private Label Foods and Beverages

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