Culinology - March 2015 - (Page 8)

EMERGING trends Cracking the code to CPG growth Private label products generated $120 billion in sales during the past year, a year-overyear increase of 2.1%, but the growth may be leveling off, according to a new report from Information Resources, Inc. (IRI), Chicago. In its "Private label and national brands: Dialing in on core shoppers" report, IRI explores how national brands and private label companies may drive growth after 8 | Culinology | MARCH 2015 relatively flat sales in 2014. "Shoppers have endless choices today, which makes purchasing decisions much more complex," said Susan Viamari, editor of thought leadership for IRI. "Having both national and private label brands on retail shelves is critical to creating a solid value proposition, so the challenge for marketers now is to figure out how to tailor their assortments with highly targeted products and marketing programs that keep value and affordability in the crosshairs. "Cracking the code will allow marketers to increase sales and strengthen customer loyalty in 2015 and beyond," she said. A third of shoppers seek out private label products to save money, but consumers define value in different ways. National brands are gaining momentum in drug stores, capturing 0.2 dollar share points in the past year and dropping private label share of spending in the channel to 16.6%. Meanwhile, private brands are showing strength in the mass/ super channel, particularly in the frozen and refrigerated departments with increases of 5.3 and 1.8 unit share points, respectively. Private label products gained 1.2 unit share points in general food, as retailers such as Target continue to expand selections of dry, dairy and frozen foods. Marketers may build penetration with innovative product launches in new categories. The top 50 consumer packaged goods categories comprise 64% of overall CPG dollar sales. For the private label sector, the 50 largest categories account for 67% of total private label sales. Private label manufacturers are venturing into new aisles. TreeHouse Foods, for example, honed in on healthy snacking last year with the acquisition of Flagstone Foods, a maker of private label fruit and nut mixes. With the rapid rate of channel blurring in retail and the complexity of managing private label products across multiple categories, stores may need to learn which key categories resonate most with core shoppers, IRI noted. "To ensure the right products are on the right shelves at the right time, CPG marketers must invest to understand shopping behaviors and key influencers of those behaviors at a very individual level and across CPG channels," Ms. Viamari said. "Retailers and manufacturers must participate in joint business planning to establish an optimal mix of categories, brands, pack sizes and price points within each unique marketplace."

Table of Contents for the Digital Edition of Culinology - March 2015

Culinology - March 2015
Table of Contents
President's Letter - Pay it Forward
Emerging Trends - Frozen food segment to pick up steam
Cracking the code to CPG growth
Fueling growth for c-stores
Culinary Forecast 2015
All-American dishes with ethnic flair
Breakfast Ingredient Trends
Culinology Currents
Petits Fours
Ad Index

Culinology - March 2015