PRIVATE LABEL
Private Labels Play Leading Role for Food and Drug Retailers Innovative store-brand health-and-wellness products shine during the pandemic and beyond BY MARK HAMSTRA
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rivate labels have evolved to be at the leading edge of innovation for many food and drug retailers, tapping into the latest consumer trends while retaining their “value” halo. Sales of these products soared during the COVID-19 pandemic and have retained a dedicated following in many categories as consumers readily switched brands and sought more economical choices to stock their pantries and medicine cabinets. “As proven in the past when consumers try own brands, the quality and value wins them over and many remain loyal consumers,” said Peggy Davies, president of the Private Label Manufacturers Association. “The past 10 years of growth of private brands, especially with discounters and mass merchandisers, are evidence of that.” Target, Walmart, CVS, Kroger, Casey’s and many other retailers have all either expanded their own-brand lines or launched brand new private-label lines in plant-based products, pets or home goods, she said. Drug store chains in particular have been aggressive in categories such as food, beverage, snacks and household goods in order to gain share from grocery and mass channels, Davies said. “By listening to their shoppers and positioning their offerings as a ‘one-stop
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shop’ in many departments, this strategy is delivering.” In the OTC and HBC categories, for example, store brands showed strong growth in the second quarter, year-over-year, compared with 2020, Davies pointed out, especially in pain relief, eye care and first aid products. In total, HBC private-brand dollar sales were up 8.5% in drug chains and had a 3.9% increase in unit share, she said, citing PLMA research from NielsenIQ. She said drug stores may also have opportunities to expand their private-label assortments in edibles, citing CVS as an example of a company that has been a leader in this area with its store-brand food and beverage products, including snacks. “Drug chains are the first place many turn to when they think of healthcare products, and while in the store or on the website, the purchase of snacks, beverages, etc., is a natural expansion of their purchase,” Davies said. Retailers also have opportunities to drive private-label sales growth by offering discounts or incentives through their loyalty programs, she pointed out, citing both CVS and Walgreens as examples of drug store banners that promote their store brands effectively through their loyalty platforms.
December 2021 DRUGSTORENEWS.COM
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