So, back in the day when grocery stores first introduced private label food products they were lacking flavor, texture, and packaging visceral attractiveness. Today, however both Millennials, ages 24-37, and Generation Z, ages 0-23 are discovering private label the ilk of Aldi, Trader Joes, and Whole Foods and adopting them as hallmark brands for the home.
According to Nielsen sales of private label brands grew 6.6 per cent in 2014, , outpacing the 2.4 per cent growth in total grocery sales. Nielsen's head of retail services, Kosta Conomos, expects private label sales to reach 25 per cent of the market in five years, fuelled by demand from so-called "millennials" and further product innovation and discounting.
"People of my generation still recollect what private label was like 20 or 30 years ago," said 44-year-old Mr Conomos. "Younger generations have no recollection of the prior quality of private label so for the younger generation private label is now considered part of their repertoire - it doesn't have the stigma.
This has become a global movement in fact private label groceries now account for 21 per cent of packaged grocery sales in Australia, up from 18 per cent two years ago, and household penetration has reached 98 per cent according to Nielsen.
In the United Kingdom today private label has around 40 per cent-plus market share – “the UK has the benefit of experiencing good quality private label for three decades [whereas] Australia is a more recent phenomenon according to Conomos."
In the United States Trader Joes, Aldi, and Whole Foods private label product adoption by millennials and Gen Z is faster, stronger, and will be lasting according to Foodservice Solutions® Grocerant Guru™ largely driven by the largest generation the millennials and the next generation of spender Gen Z.
Steven Johnson is the Grocerant Guru™ at Tacoma, WA based Foodservice Solutions®, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. For additional Information Contact: www.FoodserviceSolutions.us Steve@FoodserviceSolutions.us