Market TRENDS
National Brands vs. Private Labels: a market dynamics analysis for hygiene tissue in the United States
Article by Franklin Zambrano1, Antonio Suarez2, Dr. Hasan Jameel3, Dr. Richard Venditti3 & Dr. Ronalds Gonzalez MBA4 Ph.D. student focused on tissue technology and performance, North Carolina State University Ph.D. student focused on sustainability, North Carolina State University 3 Professor, North Carolina State University 4 Professor & Co-Director Tissue Pack Innovation Lab, North Carolina State University
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Private labels have managed to gain market share from national brands in different consumer-packaged goods, growing at a CAGR of 2.5% since 2015 versus the 1% growth reported for national brands.
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rivate labels have managed to gain market share from national brands in different consumer-packaged goods, growing at a CAGR of 2.5% since 2015 versus the 1% growth reported for national brands.[1] Particularly hygiene tissue products in the consumer segment, such as bath tissue and paper towels, represent one of the articles with the highest impact on the sustained growth of private labels (Fig. 1), with approximately 27%[2] of the current tissue market share in the U.S., 55% in Europe and 35%[3] worldwide.
The success of private labels in consumerpackaged goods is attributed to their ability to offer the best trade-off between product performance and shelf price. Consumers perceive that private labels are reasonably priced for the performance offered, making them feel that they obtain higher value for their money. However, when national brands and private labels are compared on a performance basis in the context of hygiene tissue, which product group truly ofFig. 1. Consumers’ willingness to purchase private labels. fers the best value? Is the feeling of satisfaction experienced by consumers well-founded? The goal of this analysis is to answer these questions in an attempt to provide more insights to manufacturers, retailers, and consumers about the current product offering in the U.S. tissue and towel market.
WHICH PRODUCT GROUP OFFERS THE BEST VALUE TO CONSUMERS? Previous work conducted by the Tissue Pack Innovation Lab at NC State University (www.go.ncsu. edu/tissue) showed that the price consumers pay for bath tissue and paper towels is highly cor-
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PAPERFIRST MAG Autumn 2020
