Will store brands outcompete national rivals in fresh categories?

Store brands have seen impressive growth since the start of the Great Recession about seven years ago, more than doubling sales and capturing about one-quarter of all supermarket volume. Much of this growth has been in dry groceries and non-foods categories, two areas facing stagnant sales due to changing shopping behavior and under attack from a wide variety of competitors. One of the key areas of growth in supermarkets has been in the perimeter/fresh categories, so perhaps it's no surprise that the Private Label Manufacturers Association's (PLMA) Annual Conference this week in Chicago targeted dairy, deli and bakery for growth.

Supermarkets have long had their own milk, egg, bread and juice programs, but now they're moving aggressively into sub-categories like hummus and other specialty spreads, imported cheeses and gourmet bake-off cookies. The move to organics has also pushed the product proliferation in fresh categories, with at least 200 organic fresh and prepared foods vendors this year, roughly double last year's number. Plus, dozens of more traditional suppliers are now promoting their fresh lines.

Source: Whole Foods

"The emphasis on dairy, deli and bakery is a reflection of companies coming to us last year and asking for more private label in those categories. For the consumer, these categories are an important reason for them to shop in a store and, if we can establish that private label can help build sales, the retailer will benefit," said Brian Sharoff, president of PLMA.