Private Label Sales Surge During COVID-19 Stock-Up: Organic a Bright Spot
Supermarket News reports that store-brand sales surged in the first quarter of 2020 and described “a nearly 15% year-over-year gain—outperforming national brands as consumers stocked up on groceries in the initial stages of the coronavirus pandemic.”
Organic private label sales are also a bright spot within the store-brand sales surge: Our Organic and Beyond 2020 report finds that trust in retailers’ organic private brands is very high today. Specifically, a great majority of consumers (83%) agree that organic private brands are just as good as national organic brands, and trust in retailers’ organic private brands is comparable to consumer trust in national organic brands. Underscoring the popularity of organic private label, 35% of organic shoppers say they are purchasing more organic private brands vs. a year ago.
In a recent Hartman Group webinar (Organic and Beyond 2020 Report Highlights, which was covered in a Food Business News article), Hartman Group CEO Laurie Demeritt noted, “What we’ve seen over the past seven to eight years is that organic has also become a symbolizer of quality, which is really interesting because when the organic market started, and I’m going back 40 years ago or so, people typically felt like they were having to give something up in terms of organic.” The article observed that “The top barrier [to purchase] was too expensive at 59%. Still, that percentage has decreased by 11 points in four years, Ms. Demeritt said. ‘That is largely due to the fact that private label has entered in a very robust way in the organic marketplace,’ she said, adding private label has driven down price perception among consumers.”
For store brands overall, economic concerns coupled with health and wellness needs resulting from the pandemic are the perfect storm to usher in significant adoption of private label, fueling its upward growth trajectory from the last few years. The perception of private label brands as full-fledged brands in their own right has been gaining considerable traction over the last several years as they demonstrate higher quality and premium attributes on par with those of branded products. The Q1 2020 sales figures reported likely represent a bellwether of how price concerns will take on greater weight in purchase decisions while also illustrating how private label offerings are rising to meet consumer needs around quality attributes in addition to the price.
With regard to organic store brands, consumers value organic and natural private label brands for their broad availability, quality associations, and lower price points. Organic private brands have expanded across channels, and consumers have taken note of the increased visibility of these brands throughout various retailer departments. The greater prominence of these recognizable labels, coupled with price points often comparable to conventional equivalents, has led to noticeable consumer reliance on these products. The presence of these brands helps establish a halo of trust in retailers, which is reinforced in consumers’ minds when retailers communicate expertise and standards in choosing the products they carry.
Report: Organic and Beyond 2020
Infographic: Organic Private Label Brands