Why Grocers Should Elevate Health & Wellness Benefits in Private Label
More than half of consumers say that private brands are very or extremely important in determining where they shop, according to FMI — The Food Industry Association’s “Power of Private Brands 2023” report. With record-breaking private-brand sales outperforming national brands in 2022 and 2023, shoppers have increased private-brand purchases in the past year and say that they’ll keep buying them even if grocery prices decline.
As customers increasingly seek value beyond price, retailers should be expanding private-brand assortments that highlight elevated health, nutrition and sustainability attributes while also delivering on quality, convenience and experience.
Building Loyalty With Health and Wellness
The “Numerator Visions ’24 Consumer Trends” annual report predicts that private brands will continue to grow and play an important role in how retailers attract and maintain loyal customers. The report urges leaders to be proactive in addressing the increased consumer focus on improving health and wellness that is universal, transcending income levels, generations and ethnicities.
Continued focus on healthier private-brand innovation can help retailers capitalize on two emerging health trends influencing consumer purchase decisions: food as medicine (FAM) and GLP-1 weight-loss drugs. Both offer a unique opportunity for retailers to increase awareness (marketing) and sales (profitability) of healthier private-brand products.
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Food as Medicine and Weight-Loss Drugs
Consumers are demanding more from their food, viewing it as medicine, and are increasingly aware of how food can increase the risk of diet-related illness and how nutrients in food can also optimize health. According to the latest FMI report on “Food Industry Contributions to Health and Well-Being,” supermarkets are a logical hub for the FAM movement, as they can offer a multifaceted approach that includes product curation, nutrition education, health care partnerships and digital innovation.
Further, the FMI report shares key insights on how brands are reformulating products to respond to consumer health-and-wellness trends, including the reduction of sugar, salt and portions, while adding beneficial ingredients to support health. With 7% of the U.S. population estimated to be on GLP-1 weight-loss drugs by 2035, the private-brand innovation and reformulation cited in the report are opportunities for retailers to help customers to manage weight loss and improve diabetes outcomes with and without taking GLP-1 agonist drugs.
Next-Gen Private Brands
Traditional private-brand innovation has focused on the removal of negatives (i.e., “free-from” artificial flavors/preservatives/sweeteners/hormones/GMOs) and increasing the affordability and accessability of organics. Future innovation will focus on improving the nutritional quality of food products and the promotion of innately healthy whole foods that are the cornerstone of FAM initiatives (fruits, vegetables, nuts/seeds, beans/legumes, seafood).
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The next generation of healthier private brands will help consumers battle the health conditions that are having the biggest impact on our health care system today — obesity, heart disease and cognitive disorders. Consumers need help increasing their intake of nutrients that support health: dietary fiber, omega-3 fats, (sustainable) protein, pre/probiotics and functional ingredients.
Building Trust and Credibility
As well as leveraging the latest food, health and diet trend data to inform private-brand strategy, enlisting registered dietitian nutritionists (RDNs) adds credibility and builds trust with shoppers. RDNs can help design evidence-based consumer health promotion strategies that use new technology to influence shoppers along the path to purchase.
