A joint study conducted by Kearney and Nielsen IQ estimates that private label food, beverage, beauty and fashion items represented 24 percent of consumer expenditure in 2023 compared to national brands at 76 percent of dollar sales.  From 2022 to 2023, private label sales rose 12 percent to $225 billion and are estimated to grow to $406 billion by 2030.

The motivation for the adoption of private brands extends beyond price.  A third of consumers now regard store-brand food and beverage offerings as superior to national brands with approximately half of survey respondents accepting equivalence to national brands.Kathryn Black, a partner at Kearney, stated, “Private labels can no longer be considered the poor cousin of major national brands.”

Private label food categories favored by consumers include bakery at 57 percent of dollar value, dairy at 35 percent, frozen foods, 24 percent and groceries at 14 percent.  It was striking that there was a similar level of acceptance approaching 70 percent among three, distinct income demographics ranging from less than $50,000 to more than $100,000 annually.  There was also no difference among age groups with 70 percent of ‘Generation Z’ (born 1997-2012) reporting a favorable impression of private labels compared to 65 percent for ‘baby boomers’ (born 1946-1964).

Private label products represent a disproportionately higher share of the market ranging from 31 percent in Italy to 37 percent in the U.K. compared to the relatively low volume in the U.S. and Canada. This suggests a potential for market growth.  Ms. Black noted, “Private label can generate significant margins for U.S. retailers and that manufacturers need to pay attention to growing private label offerings.”

The success of deep discounters, including Aldi, with over 70 percent of their shelf and cooler space displaying private brands is an indication of consumer acceptance.