FMI: Private Brands Poised for Growth in 2020

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FMI: Private Brands Poised for Growth in 2020

By Dan Ochwat - 01/08/2020
FMI: Private Brands Poised for Growth in 2020 Doug Baker
Doug Baker, VP, industry relations, FMI

Doug Baker is enthusiastic about private brands. 

The VP of industry relations at the Arlington, Va.-based Food Marketing Institute (FMI) said in Progressive Grocer sister publication Store Brands December 2019 feature that he sees private brands enjoying continued success due to Gen Z and Millennial shoppers showing interest, and more innovation entering the category. He said that consumers don’t see private label products as inferior; consumers see them as private brands.

“Consumers see them the same way they see PepsiCo, Frito-Lay, Kellogg’s, and they hold them to the same standards,” Baker said in the article.

The executive doubled down on that enthusiasm in a new FMI post saying that food retailers are prioritizing space and SKU allocations to private brands.

“Why do I feel so positive about the outlook?” he wrote in the post. “It’s because of a growing private-brands commitment and strategic positioning by food retailers.”

According to an FMI survey of food retailers cited by Baker, nearly 60% of the food retailers in the study plan to increase space allocation for private brands over the next two years. By comparison, only 2% expect to decrease space, and 35% will go unchanged, according to the FMI Food Retailing Industry Speaks survey.

Other factors benefiting private brands, Baker said, include food retailers successfully leveraging growth trends such as health-and-wellness products, fresh food and free-from products under their store brands.

Lastly, Baker said that retailers are increasing experimentation with ecommerce and click-and-collect strategies that will benefit private brands, and that they’re looking to become more innovative.

An FMI report, “The Power of Private Brands,” revealed that only 14% of those surveyed found private brands to be leaders in innovation, but Baker feels the number isn’t representative of where private brands are. The industry has long been pegged as fast followers of national brands, but as private brands look to the future, they will be moving more toward being leaders of consumer goods industry, he added.