January 27, 2025
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Private Label Sales Projected To Grow 6% Annually Through 2030, Reaching $462 Billion
Private label products have proven to be a boon for retailers in multiple verticals throughout 2024, and their presence on store shelves — physical or digital — is only expected to grow in the years to come, according to Store Brands.
Briefly detailing the events of the UNFI Spring and Summer Selling Show held in San Diego, California, the outlet’s Greg Sleter gestured toward a rosy future for private label sales.
“During the Spring and Summer Selling Show, private label was a hot topic. Attendees learned that store brands are estimated to grow approximately 40% over the next six years driven by competitive pricing, improved quality, and increased innovation. Through 2030, private label sales are forecast to grow nearly 6% annually, reaching sales of $462 billion,” Sleter wrote.
“To capitalize on this trend, retailers learned that they should consider a clear private brand strategy that communicates the value — and differentiators — of their private brand products to their shoppers,” he added.
Private Label Sales Had a Very Strong 2024
As the Private Label Manufacturers Association (PLMA) documented in a Jan. 16 press release, private label products enjoyed a relatively strong year in 2024, with growth outpacing national brands.
According to the PLMA, store brand sales ticked upward by $9 billion over 2023’s figures to reach a record sum of $271 billion in 2024. That increase represents a 3.9% rate of annual growth, with Circana data being taken from Jan. 8 through Dec. 29, 2024, in terms of calculations.
In contrast, national brands saw sales growth of just 1%.
“Sales of store brands hit a record high last year,” said PLMA President Peggy Davies. “The quality, value and innovation that store brands provide can’t be beat.”
In all 10 categories tracked by Circana, store brands saw growth. Notable leaders (in terms of dollar sales) included:
- Refrigerated (up 7.5%)
- General food (up 4.3%)
- Beverages (up 4%)
And concerning unit sales, the categories exhibiting the strongest growth were as follows:
- Beverages (up 3.5%)
- Pet care (up 3.5%)
- Home care (up 3.2%)
PLMA’s 2025 Private Label Report is expected to be published sometime in February, with further details and data breakdowns to be provided at that time.
Dollar General To Beef Up Its Private Label Roster, Following Walmart, Kroger, and Amazon
In line with the projections and analysis put forth by both the UNFI conference attendees as well as PLMA’s data, it appears Dollar General is suiting up to wade more deeply into the private label pool.
As a separate report from Store Brands outlined, Dollar General plans to expand its inventory with roughly 100 new items, half of which will fall under its Clover Valley brand. Given the above data points — namely, that grocery store products and food more broadly appear to account for a substantial growth segment — and that Dollar General has already seen healthy spend on its existing 600-plus Clover Valley products (and more than 3,200 consumable private brand products), it seems a trend that is set to continue.
“As shoppers seek value and quality, we continually listen to customer feedback to identify opportunity gaps,” said Dollar General EVP and CMO Emily Taylor.
“With more than half of our customers’ baskets having at least one private brand item, we are proud to make significant investments in our private brands, bringing even more on-trend products and pantry staples to shelves,” Taylor continued.
As Food Dive reported, Dollar General will be joining larger existing players buying further into private label, including Kroger (Field & Vine), Walmart (bettergoods, Great Value, George, etc.), and Amazon (Amazon Basics, Amazon Saver). Field & Vine, bettergoods, and Amazon Saver all debuted in 2024, reflecting confidence in the continued success of private label brands over national brand competitors moving into 2025 and beyond.
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Discussion Questions
Why are grocery brands and products stocked by grocers leading the way in private label?
How can smaller retailers stay competitive against the price pressures of larger retailers, both in terms of national brand pricing and the creation and sale of their own successful private label products?
Which retail segment is set to experience the largest private label boom in the next few years, behind food and beverage categories?
Poll
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From a retailer’s perspective, private label can help enhance margins and is also a tool to differentiate and develop a rounded range. The US has traditionally been behind the curve on private label penetration compared to overseas markets, but it is now starting to catch up.
Under this headline, there are a whole range of different factors supporting growth. Grocers are developing and growing their premium private label lines (think Target’s Good & Gather Signature and Safeway’s Signature Select). The continued rise of the discounters, like Aldi, which are very heavily skewed to private label and have a good reputation for quality. Changing consumer attitudes to private label – from our data, 64% of American shoppers say private label quality has improved over the past 5 years; 71% say the selection has improved.
Add to that promotions managed entirely by the retailer. A long time benefit of private label.
Neil, great points about consumer attitudes to private label products. As more and more consumers accept and value private label brands, it has enabled retailers to expand their private label offerings. Some private label brands, such as Costco and Trader Joe’s, have cultivated a loyal following for their private label brands that are now valued as premium brands by many customers. There is still a lot of room for growth for private label brands.
While everyone focuses on the extra margin of private label solutions, there are 2 additional value drivers that are oft forgotten. First is better control over your supply chain, thus ensuring you always have a viable product on-shelf for your customer. And the second is increased negotiating power with the name brand suppliers, which further drives margins. As a former Walmart merchant, I loved my private label products for all these reasons.
With private label annual sales growth nearly quadruple that of national brands (3.9% vs. 1%), more retailers will invest in own brands as revenue drivers.
Grocery private labels meet this moment, as consumers seek and trust store brands’ bundle of quality, affordability and innovation. We want our weekly shops to be easy on our wallet and stomach. Retailers also win, thanks to exclusive lines that offer differentiation, deepen loyalty and protect margins.
Anyone can get private label products. Co-packers and contract factories make everything anyway.
it’s pretty natural for shoppers to move towards private label during periods of inflation.
Grocery, Warehouse clubs and Mass merchants (especially soft lines) will all lead the way in Private Label sales growth over the next 5 years. Many Private Labels have been around long enough that the next generation is starting to see them the same as name brand products just as a better value. Successful retailers have invested a lot of time in building a strategy that balances optimizing Margin with a long term product strategy that does not dilute the private label brand name.
Why are grocery brands leading the way? Data. Grocery tracks more product attributes, and has high sales volumes in each category. That’s a lot of data to mine to ensure the success of a private label offering. To that end, it will be more challenging for smaller retailers, especially outside FMCG, to compete. But we’re seeing a lot of chains move successfully into homewares, and some into apparel. It will be interesting to see if more private label products show up in the broader DIY and home and garden space.
Private brands are a bandwagon most retailers should consider. Not only do private brands offer better margins, but many consumers have come to understand that the product is as good as national brands. In fact, it’s often the same product. So private brands are good for retailers (who have the volume to do private brands) and good for consumers…the only loser are the national brands. As consumers trade down to private they’re not buying national. But the national brands are in a tough spot. If they don’t offer private brands to retailers, other brands will.
And national brands offering private label may be more profitable: zero out the promotional budget and narrow the distribution logistics for cost savings. Mass-market advertising is getting less and less effective every day, so the old model of constructing a powerhouse brand thru broadcast media that every retailer has to carry has run its course. The competitive advantage for a producer is in your literal “farm team” – having a reliable & high-quality source of supply and efficient production.
Done right, private label can be a win-win for both retailer and consumer. There needs to be a clear value proposition relative to the national brand and deliver on both quality and price. For smaller retailers, finding the right partners that provide white label options at competitive prices is a good alternative but might limit opportunities to significant product feature differentiation.
Private label and store brands have gone through literally hundreds of changes, evolutions, and peaks and valleys, mostly since the 1960’s, but especially since the 1970’s when “generics” evolved to private label and store brands.
I don’t know of many retailers who are not in the private label business, at least to variable degrees. But private label always peaks during “down” economies, and periods of high inflation – and that would be now.
The Trump administration will fix Bidenomics with lower energy costs but the results will not be seen on grocery shelves yet this year, so private label will continue to escalate.
Private label used to get a bit tarnished in challenging economic times. It was unwise for those with a limited income to risk what little they had on a no name brand. They couldn’t afford products that didn’t measure up. They relied on the big brands to guarantee quality for their scarce dollars. Those times are over. As noted elsewhere, shoppers think of what we call private label as just another trusted brand. Retailers have done an excellent job with packaging, marketing and the quality of their in house product lines.
Private Labels is having a moment, one that I don’t except ebb any time soon. Consumers have changed their opinions on “store brands” over the years as quality has improved. The benefits for retailers are better margins with typically lower prices on private-label products. They also can be a key strategy for differentiation and driving loyalty. See Trader Joe’s and Costco for great examples of private labels that customers want and know they can’t find anywhere else.
On the flip side, for brands, the fast growth of private label presents a considerable challenge as their market share and shelf space decline. They need to find innovative ways to keep their products relevant and not just as a benchmark (quality and price) that consumers use when they choose to select the store brand.
There is some risk for retailers. Supply chains can get messy, and they need to establish teams with experience in manufacturing, sourcing, and design to help ensure reliable product availability and that the packaging and product positioning are compelling and competitive.
I think we will continue to see retailers continue to grow these items. Verticalization is a sold strategy now that consumers are less enamored with brands. I expect we’ll also see more DTC strategies from brands who have the same growth goals and are realizing that to be relevant they need to provide consumers with more channels to access their product. And if that means they bypass the retailers, there is more margin for them.
The caution: remember the lesson from Nike when they curtailed their retail partners!
At the end of the day, retailers and their brand partners need to remember they have the same goals: reaching consumers and providing them with products they want while growing item, category, and channel sales. The more they can work together, share data, and focus on their complementary value proposition, the better off the retailer and the brand will perform.
Back in my day, PL was a cheap but poor substitute for branded products. That is not so today. Every time there is a hiccup in the economy, and another consumer tries a private label, they find that the product is as good or better than the brand and less expensive,
More shoppers obviously turned to store brands due to high grocery prices. They enjoyed lower prices and found the quality to be acceptable to good. As a result, I suspect that many shoppers will stay with store brands even when the prices of name brands decline. One more thing: shrinkflation by name brands won’t soon be forgotten.
Absolutely not surprising given the move towards private label by shoppers during inflationary periods. And as the quality and variety continues to improve in grocery, I’d expect private label to grow further in the future.
Years ago, retailers pursued private label for margin or brand equivalencies at discount pricing. Private label manufacturers responded to retailer RFPs for ingredient compatibility to branded products. During this time period private label brands enjoyed little success except when branded alternatives raised prices without any benefit enhancements.
Today, retailers understand that they need to think like a brand & act like a retailer. The appropriate investment in private or own label products has enabled retailers to develop significant points of positive differentiation.
People are “on to” the fact that the difference in price between private label and brand label goes to advertising and not quality. Because of that I am surprised that the growth is not projected to be even stronger.
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From a retailer’s perspective, private label can help enhance margins and is also a tool to differentiate and develop a rounded range. The US has traditionally been behind the curve on private label penetration compared to overseas markets, but it is now starting to catch up.
Under this headline, there are a whole range of different factors supporting growth. Grocers are developing and growing their premium private label lines (think Target’s Good & Gather Signature and Safeway’s Signature Select). The continued rise of the discounters, like Aldi, which are very heavily skewed to private label and have a good reputation for quality. Changing consumer attitudes to private label – from our data, 64% of American shoppers say private label quality has improved over the past 5 years; 71% say the selection has improved.
Add to that promotions managed entirely by the retailer. A long time benefit of private label.
Neil, great points about consumer attitudes to private label products. As more and more consumers accept and value private label brands, it has enabled retailers to expand their private label offerings. Some private label brands, such as Costco and Trader Joe’s, have cultivated a loyal following for their private label brands that are now valued as premium brands by many customers. There is still a lot of room for growth for private label brands.
While everyone focuses on the extra margin of private label solutions, there are 2 additional value drivers that are oft forgotten. First is better control over your supply chain, thus ensuring you always have a viable product on-shelf for your customer. And the second is increased negotiating power with the name brand suppliers, which further drives margins. As a former Walmart merchant, I loved my private label products for all these reasons.
With private label annual sales growth nearly quadruple that of national brands (3.9% vs. 1%), more retailers will invest in own brands as revenue drivers.
Grocery private labels meet this moment, as consumers seek and trust store brands’ bundle of quality, affordability and innovation. We want our weekly shops to be easy on our wallet and stomach. Retailers also win, thanks to exclusive lines that offer differentiation, deepen loyalty and protect margins.
Anyone can get private label products. Co-packers and contract factories make everything anyway.
it’s pretty natural for shoppers to move towards private label during periods of inflation.
Grocery, Warehouse clubs and Mass merchants (especially soft lines) will all lead the way in Private Label sales growth over the next 5 years. Many Private Labels have been around long enough that the next generation is starting to see them the same as name brand products just as a better value. Successful retailers have invested a lot of time in building a strategy that balances optimizing Margin with a long term product strategy that does not dilute the private label brand name.
Why are grocery brands leading the way? Data. Grocery tracks more product attributes, and has high sales volumes in each category. That’s a lot of data to mine to ensure the success of a private label offering. To that end, it will be more challenging for smaller retailers, especially outside FMCG, to compete. But we’re seeing a lot of chains move successfully into homewares, and some into apparel. It will be interesting to see if more private label products show up in the broader DIY and home and garden space.
Private brands are a bandwagon most retailers should consider. Not only do private brands offer better margins, but many consumers have come to understand that the product is as good as national brands. In fact, it’s often the same product. So private brands are good for retailers (who have the volume to do private brands) and good for consumers…the only loser are the national brands. As consumers trade down to private they’re not buying national. But the national brands are in a tough spot. If they don’t offer private brands to retailers, other brands will.
And national brands offering private label may be more profitable: zero out the promotional budget and narrow the distribution logistics for cost savings. Mass-market advertising is getting less and less effective every day, so the old model of constructing a powerhouse brand thru broadcast media that every retailer has to carry has run its course. The competitive advantage for a producer is in your literal “farm team” – having a reliable & high-quality source of supply and efficient production.
Done right, private label can be a win-win for both retailer and consumer. There needs to be a clear value proposition relative to the national brand and deliver on both quality and price. For smaller retailers, finding the right partners that provide white label options at competitive prices is a good alternative but might limit opportunities to significant product feature differentiation.
Private label and store brands have gone through literally hundreds of changes, evolutions, and peaks and valleys, mostly since the 1960’s, but especially since the 1970’s when “generics” evolved to private label and store brands.
I don’t know of many retailers who are not in the private label business, at least to variable degrees. But private label always peaks during “down” economies, and periods of high inflation – and that would be now.
The Trump administration will fix Bidenomics with lower energy costs but the results will not be seen on grocery shelves yet this year, so private label will continue to escalate.
Private label used to get a bit tarnished in challenging economic times. It was unwise for those with a limited income to risk what little they had on a no name brand. They couldn’t afford products that didn’t measure up. They relied on the big brands to guarantee quality for their scarce dollars. Those times are over. As noted elsewhere, shoppers think of what we call private label as just another trusted brand. Retailers have done an excellent job with packaging, marketing and the quality of their in house product lines.
Private Labels is having a moment, one that I don’t except ebb any time soon. Consumers have changed their opinions on “store brands” over the years as quality has improved. The benefits for retailers are better margins with typically lower prices on private-label products. They also can be a key strategy for differentiation and driving loyalty. See Trader Joe’s and Costco for great examples of private labels that customers want and know they can’t find anywhere else.
On the flip side, for brands, the fast growth of private label presents a considerable challenge as their market share and shelf space decline. They need to find innovative ways to keep their products relevant and not just as a benchmark (quality and price) that consumers use when they choose to select the store brand.
There is some risk for retailers. Supply chains can get messy, and they need to establish teams with experience in manufacturing, sourcing, and design to help ensure reliable product availability and that the packaging and product positioning are compelling and competitive.
I think we will continue to see retailers continue to grow these items. Verticalization is a sold strategy now that consumers are less enamored with brands. I expect we’ll also see more DTC strategies from brands who have the same growth goals and are realizing that to be relevant they need to provide consumers with more channels to access their product. And if that means they bypass the retailers, there is more margin for them.
The caution: remember the lesson from Nike when they curtailed their retail partners!
At the end of the day, retailers and their brand partners need to remember they have the same goals: reaching consumers and providing them with products they want while growing item, category, and channel sales. The more they can work together, share data, and focus on their complementary value proposition, the better off the retailer and the brand will perform.
Back in my day, PL was a cheap but poor substitute for branded products. That is not so today. Every time there is a hiccup in the economy, and another consumer tries a private label, they find that the product is as good or better than the brand and less expensive,
More shoppers obviously turned to store brands due to high grocery prices. They enjoyed lower prices and found the quality to be acceptable to good. As a result, I suspect that many shoppers will stay with store brands even when the prices of name brands decline. One more thing: shrinkflation by name brands won’t soon be forgotten.
Absolutely not surprising given the move towards private label by shoppers during inflationary periods. And as the quality and variety continues to improve in grocery, I’d expect private label to grow further in the future.
Years ago, retailers pursued private label for margin or brand equivalencies at discount pricing. Private label manufacturers responded to retailer RFPs for ingredient compatibility to branded products. During this time period private label brands enjoyed little success except when branded alternatives raised prices without any benefit enhancements.
Today, retailers understand that they need to think like a brand & act like a retailer. The appropriate investment in private or own label products has enabled retailers to develop significant points of positive differentiation.
People are “on to” the fact that the difference in price between private label and brand label goes to advertising and not quality. Because of that I am surprised that the growth is not projected to be even stronger.