It’s a new year, and even more exciting, a new decade. It’s the perfect time to reset and revitalize, and if you look around the consumer packaged goods (CPG) landscape, you’ll see an industry humming with activity.
Disruptive technologies, the continued growth of ecommerce, shifting consumer behaviors, increased personalization of products and shopping experiences—these are just some of the things we can expect to see in the coming decades. CPG is ready to take action.
But it’s not just the brands that are moving and shaking into the New Decade. Private label has been making waves in recent years, and it’s not too crazy to think that those waves might become tidal-like in the near future. Private label is leveling up. They #cantstopwontstop, and you know me—a proud private label fangirl—I’m watching eagerly to see where they’ll go next. In the meantime, here are three exciting areas to watch in private label in the coming days.
Now more than ever, we’re seeing private label products tap into the trends that consumers are fueling. Take the desire for plant-based products, for example. According to a Nielsen report, for the 52 weeks ending June 16, 2018, sales of plant-based products shot up 20 percent. And 2019 saw the continued rise, with sales expected to top $4.63 billion (yes, that’s with a b). Given the wild amount of press Beyond Burgers garnered last year, along with the plentiful launches of plant-based milks, snacks, meats, and other sundry products, that number doesn’t seem so crazy, does it? And it doesn’t really come as a surprise, then, that retailers are launching their own labels into the fray.
Kroger, for example, just launched a vegan beef product under its Simple Truth Emerge line, available in both grinds and patties.
“Kroger believes that everyone deserves to have access to fresh, affordable and delicious food, no matter who you are, how you shop or what you like to eat. And Simple Truth Emerge is an illustration of the commitment that Kroger has to providing our 11 million daily customers with new choices that fit their evolving eating styles and preferences,” said Gil Phipps, vice president of Our Brands for Kroger in a recent article. The retailer’s plant-based line launched last year, and with this latest meat alternative product, they’re gaining ground with consumers interested in similar products.
Sustainability is another hot topic for consumers, with many consumers wanting more sustainable options for their favorite products, and in many cases reaching for those options on the shelf. The Center for Sustainable Business found that between 2013 and 2018, 50 percent of sales growth among CPG products came from sustainable products.
“The area of consumer packaged goods—food, personal care products—is an area where there’s been significant growth in demand for sustainability-marketed products,” said Tensie Whelan, Director of CSB, in a Fortune article.
2019 saw the launch of Hello Bello, a line of plant-derived baby care products, with 10 SKUs that seem to be a hit with consumers. And Target expanded its line of Cloud Island products—which includes wipes that are 99 percent water and include plant-based ingredients—last year, and will no doubt build upon that success in 2020.
The Amazon offering
As private label has grown steadily, it was only a matter of time until Amazon started making their own private label mark. It feels like you can’t open a webpage these days without hearing about Amazon Basics, amirite? On top of all their other own labels like Solimo, Earth+Eden, and of course, the entire cannon of Whole Foods’ 365 Everyday Value. 2019 saw the launch of AmazonCommercial, a new line of commercial products like bulk paper towels and toilet paper, that will compete with Kimberly Clark.
“Private brands is an area where, quite frankly, we lag behind many of our retail competitors who have 20 to 80 percent of their products as private brands, where we’re only in the low-single digits,” Nate Sutton, Amazon’s associate general counsel told a House Judiciary subcommittee last year. “We do offer private brands on occasion because we think it offers high-value and low-cost items for customers and because customers demand that.” Pair that self-knowledge with the fact that Amazon alone accounted for an estimated 39 percent of ecommerce in 2019, and…well, if Bezos & Co don’t push harder on their private label offerings this coming year and beyond, color me shocked.
Fashion-forward private label
We’ve seen the death of more than a handful of department stores and clothing retailers lately, but that’s not stopping some retailers from investing in their own labels to give them a boost.
Walmart, for one, “is hellbent on setting itself up for a stronger fashion e-commerce business in 2020,” writes Katie Richards in a recent Glossy article. The company currently offers 600 fashion brands, 150 of which are exclusive to the retailer.
“It’s clear that Walmart has started to shift their focus from discounting to connecting people to the right products, in order to get shoppers to return and buy more,” said Sherene Hilal, vice president of product marketing and business operations at retail technology company Bluecore. “In 2020, I expect Walmart to expand its fashion business to focus more on curation and quality [with a focus on companies like] Eloquii.”
Not to be outdone, Target launched a new athleisure brand, All in Motion, in mid-January 2020, hoping to compete with the likes of big names like Nike and lululemon. The sustainably-sourced line will be available online and in stores, and is committed to “quality, sustainability, and inclusivity,” according to a press release. The retailer is so confident in their product, they’re predicting the line to make $1 billion (again, with a b) in its first year.
As 2020 gets underway, private label is already showing us something. Where and how it grows over the next 12 months is something you won’t want to miss.