Why Are Customers Reaching for the Private Labels?

According to Retail Customer Experience, 27 percent of consumers say they buy private-label snacks either exclusively or most of the time and 53 percent say they buy them sometimes. Of those shoppers, 68 percent say the food stores they shop in most often carry at least one private-label brand, which means even if shoppers don’t purchase them, they are fully aware of the private-label brands they see when browsing shelves. But what is making more people reach for private labels?

Key Drivers for Private Label Growth

There are a number of factors that drive shoppers to buy private-label snack products, including:

  • The Great Recession: The economic downturn of 2008 forced consumers to focus on product value and affordability. Though the country has come out of the recession, shoppers have not abandoned their value-shopping mindset.
  • Improved Product Quality: When private-label products began rolling out with more frequency in the 1980s, “generic” was almost a dirty word. People viewed private label products as poor quality. Things have changed dramatically. Both product quality and consumer perception have shifted significantly. According to data from The Nielsen Company, 72 percent of consumers feel private-label brands are good alternatives to name brands.
  • Improved Branding: Retailers understand the importance of branding, even among their private-label products. They now take the time to ensure their private-label products act as an extension of their overall brand, and dive deep to make sure they meet the needs and tastes of their shoppers.
  • Increased Exposure: Private labeling is accessible to retailers of all sizes from Walmart to local chains. As a result, consumers are exposed to private labels every time they shop for food. That exposure makes them more familiar, and allows them to feel comfortable with their purchase. In fact, Walmart’s Great Value line is now the largest food brand in the United States.

Can Private Labeling Help You Grow Profits?

The short answer? Yes. There are myriad ways private labels can help stores increase their profits. First, private labeling allows for more control over the supply chain, reducing costs. Additionally, it reduces competition with name brands and protects the store against price undercuts from competitors.

Private labeling also ensures exclusivity. If a customer loves your brand, they must come into your stores to buy it; they cannot purchase it from a competitor. Finally, private-label products increase margins by eliminating the need for a middleman. The products are cheaper to purchase from the supplier, increasing the money in the store’s proverbial pocket at the end of the day.

Ready to Boost Your Bottom Line With Private Label Snack Foods?

If you are ready to see how private labeling can help you increase your margins and your bottom line, talk to Mister Snacks.  A national leader in the private-label snacking business for over 30 years, Mister Snacks works closely with clients to help them develop the product line that will resonate with their customers.

Contact Mister Snacks today to get started building your private-label snack foods.