CHICAGO — Private label brands continue to be popular as consumers seek both value and quality, according to two reports from Circana, the Chicago-based market research company. One report focused on the US market, while the other looked at global private label trends.

Citing Circana data, the Private Label Manufacturers Association (PMLA) reported record-setting sales in 2024 for the store brands industry of $271 billion, up $9 billion, or 3.9%, from 2023. In contrast, national brands saw a 1% year-over-year increase in dollar sales, according to the PLMA.

Circana’s research found that 69% of consumers view private label as similar or superior to name brands, said Sally Lyons Wyatt, the company’s global executive vice president and chief advisor of consumer goods and foodservice insights.

“Private label is not the same as 10 or even 15 years ago,” she told Food Business News. “Most private label (products) look like a national brand, taste like a national brand and have the quality of a national brand.”

Several factors are driving private label growth, and although the price gap for some private label products “may not be a wide gap, it’s still a brand that consumers may be recognizing as a legitimate option,” she said.

Circana identified four food and beverage categories “where we never thought private label would compete,” Lyons Wyatt said. They are chocolate candy, sports drinks, carbonated soft drinks and salty snacks.

“Are they gaining a huge amount of share? Small percentages,” she said. “There’s not a huge amount of share, but they’re close to a 10 share in salty snacks.”

Private label is particularly strong in club and mass retail channels, Circana’s US report noted, represented by such familiar store brands as Costco’s Kirkland Signature and Walmart’s Great Value and Sam’s Choice. Major retailers launched at least three in-house value brands in 2024, including Walmart’s Bettergoods, Target’s Dealworthy, and Amazon’s Amazon Saver.

Lyons Wyatt said the value retailers fueled private label growth in 2024, and that regional grocers and some smaller retail channels are likely to take note of what’s happening and get in the game.

“I think we’ll see more retailers engaging with their own private label and using that as a lever,” she said. “The question will be which of these retailers will people choose.”

The Kroger Co. recently expanded its Our Brands private label offerings and reported adding more than 900 new private label products in the retailer’s fiscal 2024 ending Feb. 1, 2025. Kroger said Our Brands’ fourth-quarter sales exceeded those of national brands, particularly in its Private Selection premium brand.

Circana’s global private label report projected that premiumization and innovation may be major drivers for private label moving forward, requiring more shelf space and providing consumers with more options. Lyons Wyatt said producers and retailers working together may keep things balanced so there aren’t too many items on the shelves.

“I don’t know that we run the risk of too much assortment out there because retailers and producers are collaborating so there’s a good option for both,” she said, adding, “Maybe not proliferation of all sizes and flavors, but they’re going to work toward the optimal mix.”

As growth continues for private label, it will likely require more aggressive investment from large- and mid-size retail grocers in innovation, promotion and expansion, according to Circana’s US report. That could mean an increased emphasis on the price-value equation, competition and mix, Lyons Wyatt said.

“It has been very difficult and challenging for these retailers,” she said. “There’s no question about that, and you can see it on their faces when you talk to them. It’s hard to find the best path for them when competing in this situation they’re in.”

Retailers are working to find ingredients and supplies, and they are competing with large companies with more scale, Lyons Wyatt said. They want to identify the price consumers are willing to pay for a certain product and attempting to find the right combination.

Promotions, clearance items and differentiation will be key to winning share since retailers “are having to fight for every foot that walks in their door or every click that is online,” she said.

Private label helps to provide distinctiveness and variety, which Lyons Wyatt said can add some excitement to consumers’ in-store or online experience.

As retailers look to increase share for their private label brands, they’re partnering more often with consumer packaged goods companies in order to improve margins for both, Lyons Wyatt said. The partnering is “critically important” because national brands have a much larger footprint than most any retailer, she added.

“The ability to find that balance and collaboration, whether that’s promoting a single product, or promoting occasions to feature that product, or collaborating on promotion of a branded product and a private label one … understand that retailer is going to want more of his than the other,” she said. “But they need each other to have that collaboration in a win-win situation.”