Private Label Growth Continues in US, Says 2016 Yearbook

Store brands sales reached $118.4 billion in the United States during 2015, an all-time record and an increase of $2.2 billion over the previous year. In the past two years alone, annual sales are up 5%, or +$5.4 billion, in the major retail channels, according to the 2016 edition of the PLMA Private Label Yearbook published by the New York City-headquartered Private Label Manufacturers Association.

Store brands dollar share came to 17.7%, also the highest mark ever. Across all outlets combined store brands sales grew 2%, a performance that equaled that of national brands, which also rose 2%.

In unit sales, both store brands and national brands were off fractionally, less than a half percentage point each. Unit sales of store brands were almost 44 billion, nominally on par with last year. As a result, store brand unit share held at 21.1%.

The PLMA Private Label Yearbook compiles sales data provided by Nielsen for the 52-week period ending December 26, 2015. The annual publication has become a benchmarking standard reference for retailers and suppliers. Nielsen sales and market share statistics are reported for more than 700 food and nonfood product categories.

Looking at supermarkets, total sales of store brands were $62.5 billion, roughly even with the prior year. Over a two-year period, sales are up in the supermarket channel by +2%, or $1.1 billion. With unit share at 22.9%, nearly one of every four items sold in the country’s supermarkets last year was a store brand. As for drug chains, store brand dollar sales rose nearly a percentage point to $8.4 billion last year, while national brands fell about a point.

Consolidated private label product sales revenue consistently tops leading brands in a number of frozen food categories, according to IRI, a Chicago-based market research company. In figures crunched for the 12-week selling period that ending on August 7, which are not published in the PLMA Private Label Yearbook, store brand ice cream sales amounted to almost $290 million. That compared with $245 million generated by leading brand Nestlé Breyers and $155 million rung up Good Humor Breyers.

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In the frozen non-poultry meat sector, private label sales of almost $198 million outpaced the leading brand, Bubba Foods, by a three-to-one ratio. Store brand products also dominated in the vegetable, fruit, sorbet, ravioli and cheesecake segments of the frozen food aisle, according to IRI.

Meanwhile, back to the PLMA Private Label Yearbook, Nielsen figures are derived from sales in US supermarket operations with annual revenues of over $2 million, drug chains with annual sales exceeding $1 million, mass merchandisers, club and dollar store channels, and military exchanges.

Looking beyond these traditional outlets and the data available from Nielsen, a more comprehensive figure for annual store brand sales in food and non-food consumables would include an estimated $20 billion or more in revenues from chains that range from no-frills discounters like Aldi and Save-A-Lot, to specialty chains such as Whole Foods and Trader Joe’s, as well as convenience stores. If counted, these outlets would produce a grand total approaching $140 billion in sales.

Even that total does not take into consideration store brand products sold by chains specializing in office supplies; hardware, tools and do-it-yourself; home improvement, home decor and domestic goods; consumer electronics, baby care, pet care, toys, personal care and sporting goods. These are just a few of the non-grocery retail channels that are marketing a growing variety of store brand items.

Store brands continue to represent outstanding value for consumers. Shoppers could save an estimated $44 billion a year by buying store brand products over national brands, according to a recent study by the National Bureau of Economic Research, while market basket research by PLMA consistently reveals that shoppers can save about one-third on basic food and household items in a typical supermarket by opting for the store brand over national brands.

The yearbook is published exclusively online, and access is free to PLMA member manufacturers, brokers and suppliers. Retailers and wholesalers can gain free access to the data and analysis, including new updates every quarter, by logging in at www.askplma.com and following the prompts for Private Label Yearbook. PLMA members can access the online yearbook via PLMA's member services website at www.plma.org.