We’re living in a time where entrepreneurship is more accessible than ever. One primary reason for this is the existence of white and private-labelling – a system in which brands can source their products from manufacturers to sell with their own branding. This year, it seems that more and more businesses are taking the route of private label products when establishing their brands.
So… why is 2024 set up to be such an exciting year for private label brands?
Affordable Quality is Key
In recent years, many have had to pare back their spending habits due to a wide range of economic factors, such as the cost of food at home and food away from home rising by 0.3% and 0.4%, respectively. However, even with the need for affordable choices, many are not prepared to sacrifice premium quality, which is where private label products come into play.
The existence of private labelling allows consumers to find products that fit their criteria for quality, without having to shell out on the cost of name brand goods.
The Rise of Private Label Manufacturers
It’s worth recognising, that at least 50% of US manufacturers of consumer products are also producing private label products. This shows just how relevant the sector is, while also showing that the difference in quality between name brand and private label goods is likely to be.
Grocery Domination – The Impact of rrivate label food
The grocery sector is flourishing with private label products and are really shining. Due to factors like inflation, many simply aren’t able to fork over $4.29 for a bottle of ketchup! This lines up with why so many are choosing to select store brands, crafted by private label manufacturers, especially as their quality has consistently risen in recent years.
In fact, around 46% of shoppers in today’s economy are choosing to purchase private label products more often than not. Groceries are focusing more and more on generating loyalty, which is why they can’t afford to push out subpar generic products to their audiences.
It’s important to note that the increase in quality has also been met with an increase in price, which has allowed for private label sellers to increase their profits even more. The gap between the price of name and store brand groceries averages at around 15-20% in food categories, when it used to sit at around 28-40% two years ago.
The Best is Yet to Come
Even with the ever-present concerns of overstocking, building brand loyalty, and a lack of control in minimum orders, it’s clear that private label products, especially food items, are sure to continue their rise, resistant to succumbing to the economic climate - Name brands beware!