According to the Food Manufacturing trade publication, American consumers spend $725 billion on packaged goods each year, and nearly $120 billion of that comes from private label products. Private labels now make up 18% of the industry. Stores of all sizes, from grocery chains to C-stores to gift shops would be well advised to take notice of this trend.
Six Great Reasons To Get on The Private Label Train
Data shows that private label brands have been growing at nearly double the rate of national brands. If you haven’t gotten on board yet, here are five solid, business-based reasons to start thinking about getting your own label:
- Control Costs: Since the brand is yours, you work directly with the manufacturer, giving you much more control over pricing, merchandising and the supply chain.
- Improve Margins: Since your costs are controlled and you oversee pricing, you can reap much higher margins on your private-labeled products.
- Build Loyalty: Customers can only come to you for your private-label products, they cannot go to a competitor.
- Build Trust: You can charge less for your brands than national brands while still protecting margins since you cut out the middleman, which means customers perceive better value in your private label, which builds long-term trust.
- Boost Branding: When customers buy your products, it reinforces your brand and when they consume and share those products with friends and family, it exposes you to potential new customers.
Considerations Before Jumping Into Private Labeling
There are lots of manufacturers out there willing to work with stores to produce private label snack food items, but if you want to realize the business benefits of a product line, you must use the right approach. Do not simply choose a partner based on bottom-line price. In order to provide value to your shoppers, you too must receive value from your supplier. Always make sure to consider:
- Product Quality: Try as many samples as you can to ensure the product actually tastes good. Also make sure to see examples of the final product. Poor packaging will not draw shoppers to your snack foods, no matter how you price them.
- Expertise: How long have they been in the private label business? Do they truly understand how the market works?
- Collaboration: Does their team work with you to help you increase sales, or do they leave you to figure it out on your own?
- Customer Service: Even if their products are great, it won’t help you if you can’t reach customer service or sales when you need them.
Are You Ready To Start Private Labeling Your Snack Foods?
If you are looking for an expert partner, Mister Snacks has been a national leader in the private-label snacking business for over 30 years. To learn more about the ways private label snack foods can help you achieve your goals, contact Mister Snacks today.