Private-label food use up, satisfaction down: NPD
May 1, 2012
CHICAGO — Although the number of US consumers consuming private-label food and beverage products continues to increase, consumers are losing their enthusiasm for these value-oriented options, according to The NPD Group, a leading market research company.
Private label’s share of household servings was 18 percent in 2000 and reached 27 percent in 2011, NPD’s food and beverage market research report found. But the satisfaction with private-label foods meeting consumers’ needs has dropped from 32 percent in 2009 to 24 percent in 2012.
In recent years, increased consumption of private-label foods and beverages may have been more a matter of necessity due to the economy and higher grocery prices than deliberate intention. Thirty-four percent of adults said they intended to purchase more private-label foods vs. one year ago, but that percentage has declined to less than one quarter of adults in 2012, according to the study titled The Evolution of Private Label – Does Brand Name Really Matter?, in 2009. NPD relays this does not mean private-label products have failed to make progress over the last decade as the study finds that two-thirds of adults say store brands’ quality is much better today than it was five years ago.
Consumers’ store brand name awareness and identification remain quite low as 25 percent of shoppers are unable to identify the top-selling store brand as a store brand, the study relays.
Although more private-label end dishes are being served, consumers’ loyalty to private-label is still strongest in categories mostly used as ingredients, such as flour and butter, which top the list of private-label-loyal categories. Categories where there is a stronger loyalty to name brands are likely to display the brand to the user, frozen dinners/entrées, yogurt and carbonated soft drinks are examples of these categories.
“The question is if food inflation declines and at the same time the economy improves, will consumers return to the name brands they know and trust,” said Darren Seifer, NPD food and beverage industry analyst and author of the study. “This could become a reality if retailers don’t respond to declining satisfaction and if name brand manufacturers continue to aggressively build loyalty. On the flip side, name brands need to be aware that private-label usage continues to increase and the quality perception is improving.”