Nearly all consumers buy private label products when grocery shopping, according to a new study of 6,600 consumers conducted by Market Force Information (www.marketforce.com), a worldwide leader in customer intelligence solutions. Of the categories studied, dairy products were the most frequently purchased private label groceries, while snacks ranked second, and cereal and cleaning supplies tied for third.
Market Force’s grocery study was designed to uncover how consumers think about and purchase private label grocery products. It also looked at consumer preferences and buying behaviors across specific private label food categories. Private label products continue to be popular, though there is still substantial opportunity for grocery brands to increase wallet share. Market Force found little change in the frequency that consumers are purchasing private label when compared with its 2011 grocery study. Price and value were given as the top two reasons for buying private label in the four categories studied.
Eighty-three percent of consumers indicated that they sometimes buy private label brands if the product is better or it offers a higher value than the national brand alternative in a particular category. Thirteen percent said that they always buy private label if one is offered in their desired product category, and only 4% are either unaware of private label products or never purchase them because they believe national brands offer a better value and product. See Graph 1.
Graph 1: How consumers think about & purchase private label brands when grocery shopping
Grocers Milking Interest in Private Label Dairy
Most consumers are loading their carts with private label dairy products such as milk and cheese on a regular basis, according to the study findings. More than three-quarters (76%) of respondents said they purchase private label dairy products most or some of the time, 19% said always and 5% said never. See Graph 2. Price appears to be the main motivator. Of the 95% who buy private label dairy somewhat regularly, 78% said it is because of the price and 48% pointed to the good value. Of the 5% who only buy national brand dairy, taste (50%) and quality (23%) were the main factors. What’s more, brand awareness is fairly high in this category. When asked if their primary grocer carries private label dairy products, 80% of consumers said yes, followed by 12% who did not know and 8% who said no.
Graph 2: How often do you buy your primary grocer's private label dairy products?
The study also looked at new trials in the dairy category, asking consumers when they last tried a new brand of dairy product – one they had never tried before. Thirty-five percent said in the last three months, 21% said between three months and a year ago, and 44% said they could not remember the last time. Thirty percent – more than any other category studied – said the new dairy product they tried was private label, while 61% indicated it was not.
Cereal a Popular Private Label Buy
Perhaps because it can carry a high price tag, cereal is another prevalent private label grocery buy. When asked how frequently they purchase their grocer’s private label cereal, 63% said some or most of the time, 8% said always and 29% never. See Graph 3. Private label brands have some work to do in converting consumers from national brands. In a similar study conducted my Market Force in 2011, the same number of consumers (29%) indicated they never purchase private label cereal. Of the 71% who indicated they purchase private label cereal in the 2013 study, 76% said they do so because of the price and 47% for the value. The consumers who only buy national brand cereal primarily do so for the taste (61%) and because they have coupons for it (17%). Most of those surveyed (78%) know that their primary grocer offers a private label cereal, 15% did not know and 7% said the grocer does not carry it.
Graph 3: How often do you buy your primary grocer's private label cereal?
In looking at new cereal trials, nearly half said they could not remember the last time they tried a new cereal brand, 30% had in the past three months and a quarter said it had been between three months and a year ago. Of those who remembered trying a new cereal brand in the past year, 27% had bought a private label brand.
Saving on Snacks
More than half of respondents said that they buy private label snacks some of the time, 22% choose them most of the time and 7% always opt for private label snacks. One-fifth of consumers said they never purchase private label snacks – on par with the results from the 2011 study. See Graph 4. Sixty-eight percent of consumers say that their primary grocer offers private label snacks, while 9% said no and 23% did not know.
Graph 4: How often do you buy your primary grocer's private label snacks?
Nearly half could not remember the last time they tried any new snack brand, while 31% had done so in the past three months and 23% had tried a new brand between three months and year. Of those who remembered trying a new cereal brand in the past year, 29% went with a private label brand.
“It’s worth noting that in every category we studied, consumers cited price as the primary reason for purchasing private label brands,” said Janet Eden-Harris, chief marketing officer for Market Force. “On the flip side, taste and quality were the top reasons given by consumers for never purchasing private label. If grocery brands can deliver on both price and taste, they have a good chance at grabbing more private label market share.”
Cleaning Up on Cleaning Supplies
More than two-thirds of consumers purchase private label cleaning products some or most of the time, 5% buy them all of the time and 29% always go for a national brand. See Graph 5. The number of consumers purchasing private label cleaning products has increased slightly from the 2011 Market Force study when more than one-third indicated they always buy national brand cleaning products. Of those who buy private label cleaning products, 73% do so because of the price and 46% for the value. The consumers who only purchase national brands do so for the quality (62%) and the coupons (26%). Half said their primary grocer offers private label options, while 40% were unsure and 10% said their grocer does not.
Graph 5: How often do you buy your primary grocer's private label cleaning products?
Fifty-six percent could not remember the last time they tried a new cleaning product brand, while 21% had done so in the past three months and 23% had tried a new brand between three months and a year ago. Of those who remembered trying a new cleaning product brand in the past year, 21% chose a private label brand, while 68% did not.
The survey was conducted in May 2013 across the United States and Canada. The pool of 6,645 respondents reflected a broad spectrum of income levels, with 60% reporting household incomes of more than $50,000 a year. Respondents’ ages ranged from 19 to over 65. Approximately 73% were women and 27% were men, and half have children at home.
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