Emmet Doyle, North America Office, Bord Bia – The Irish Food Board

In a recent report, PLMA found that US supermarket private label (PL) sales rose to $62.5 billion in 2015, an increase of $1.1 billion or 2% since 2013. PL now accounts to 22.9% of US supermarket unit sales, the equivalent of nearly 1 in every 4 items sold.

The growth of PL in the US is driven by a number of factors such as the growing acceptance of PL by consumers especially foodies & millennials, who are not specifically brand loyal. Added to this the growth and expansion of US retailers such as Trader Joe’s & Whole Foods who offer primarily PL products. Finally established retailers are also using PL as a proactive approach against the growing popularity of limited assortment discounters such Aldi and the imminent arrival of Lidl.

In the US PL is slowly moving from being a value alternative of national brands, to now products which offer high quality and taste. This can be seen by some recent PL launches in the US. Albertson have recently launched its new store brand, ‘Signature’, which is a multi-category PL brand encompassing over 4000 products. Signature’s mission is to offer both quality and value.

Kroger has used its PL brand ‘HemisFares’ , which is a selection of premium imported products such as paprika aioli, olive oil and prosciutto as a point of differentiation and further reinforces the channels move from value to premiumisation. Kroger CEO Rodney McMullen explained the reasoning behind HemisFares is to appeal to the ever increasing adventurous consumer particularly millennials.

For Irish manufactures PL could be a very effective method of entry to the huge and increasingly dynamic US grocery market where brands can struggle to create traction due to the intense marketing spend and initiatives needed. Such a PL venture could allow companies to support branded sales in other markets through increased economies of scale.

For more information contact Emmet.Doyle@BordBia.ie