4 ways retailers are boosting their private brands

Out-of-stocks and, more recently, inflation have helped fuel a boom in private brand spending in recent months.

That trend is expected to continue, with more than three-quarters (77%) of shoppers who said they bought more store brand products claiming they will continue to do so, according to a recent report from the Food Industry Association (FMI).

The juiced-up sales are happening at a time when consumers are becoming more brand agnostic and zeroing in on product attributes when they shop, said Shelley Balanko, senior vice president at The Hartman Group. Concurrently, grocers are evolving from “private label” products that are essentially cheaper versions of name brands to “private brands” that are competitive with mainstream suppliers in both cost and quality, according to FMI’s Vice President of Industry Relations Doug Baker and research from The Hartman Group.

To keep the momentum going, Baker and Balanko identified four key ways grocers are boosting their private brands.

Honing in on product attributes

Consumers are moving away from brand dependency and shifting more of their purchasing decisions to meet desired attributes, Balanko said. 

Balanko said grocers are embracing more “premium attributes” like organic, non-GMO and fair trade. Functional foods and plant-based, a growing trend that has expanded from protein alternatives to categories like pasta, are both areas Baker is seeing grocers explore with their store brands. 

Blue packages of food products that say

Hy-Vee’s Good Graces private label line.

Courtesy of Hy-Vee


From Amazon’s plant-based offshoot of its Fresh line to Hy-Vee’s gluten-free Good Graces brand, grocers are offering more better-for-you and health-focused options. 

“People are using foods for preventative maintenance more than they ever have” as they look to live longer and avoid costly medical bills, Baker said. 

Revamping brand tiers

As grocers build out their private brand assortments, they are transitioning away from focusing tiers just on price extremes of super high or very low, and instead evolving to have more price options or offer different value propositions.

Pricing tiers, especially in the middle, have become more granular, said Balanko. In recent years, retailers have turned to strategies like developing additional pricing levels or bringing more brands to each of the tiers they have, she said. 

Consumers shop more by occasion and have different preferences and price elasticity across categories, Balanko said. Where customers choose to trade up with private brands can be “all over the place,” Balanko said, but noted it’s more prevalent in certain categories such as health and wellness and snacks if the premium offering has a “culinary distinction and true novelty.”

“[Having] different tiers can be very useful because consumers don’t constrain their shopping within a specific tier,” Balanko said. “So even if a consumer is shopping very closely to a budget, there are occasions and there are categories where they’re willing to buy the premium version of whatever it may be.”

Some grocers are growing specific tiers, such as premium. Last year, Kroger said it planned to add 600 items in 2021 with 60% in its Simple Truth or Private Selection lines in response to shopper desire for premium items, the Memphis Business Journal reported. 

Baker noted “value” for private brands has moved away from strictly meaning price point to encompassing other factors like a brand’s sustainability, health benefits, social responsibility and more. FMI has encouraged grocers to look at aspects such as sustainability or health and well-being in addition to price across their brand tiers. 

Save Mart’s private brand portfolio, for example, follows a three-tier approach: unique flavors, national brand equivalents and cost-saving options. The company’s own brands portfolio breaks into low-, mid- and premium-tier lines.

Plant-based milk at a Target store in Washington, D.C.

Plant-based milk under Target’s Good & Gather line.

Catherine Douglas Moran/Grocery Dive


Strengthening consumer awareness of private brands

With its new marketing campaign, Save A Lot is looking to boost its private brands and also help shoppers make the connection that those products are private brands in the first place. 

The discount grocer, which takes a multi-brand approach with more than 50 private brands, has found customers usually perceive its store brands as lesser-known national or regional ones. Still, the discounter wants shoppers to associate the more wallet-friendly options, in comparison to name brands, with the retailer.