According to the latest market research study released by Technavio, the private-label food and beverage market in the US is expected to grow at a CAGR of close to 3% during the forecast period 2016-2020.
This market research report by Technavio provides an in-depth analysis of the market in terms of revenue and emerging market trends. The report also includes an up-to-date analysis and forecasts for various market segments and all geographical regions.
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Technavio research analysts categorize the private-label food and beverage market in the US based on distribution channel:
Private-label food and beverage market in the US share by distribution channel 2015
|
Supermarkets/hypermarkets |
52.75% |
|
Convenience stores, club stores, dollar stores, and other mass retailers |
44.98% |
|
Pharmacy chains |
6.48% |
Source: Technavio
Supermarkets and hypermarkets
In 2015, supermarkets and hypermarkets dominated the US market with a share of around 53% in the private-label food and beverage products. The market is anticipated to grow at a moderate rate during the forecast period. These stores offer tested and examined private-label food and beverage products that are safe for consumption.
“Vendors of private-label products mostly focus on store specifications like logos or locations when packaging and labeling their products. The packaging and labeling show the uniqueness of the product. Supermarkets and hypermarkets develop and sell private-label products by creating a whole line of products with different features,” says Manjunath Reddy, a lead analyst at Technavio for research on food.
Various other factors driving the growth of private-label products in supermarkets and hypermarkets are information on product labels, convenient packaging, shelf presence, product ingredients, and ensuring product safety for consumption. For instance, to cater to the growing demand for organic and natural products, Safeway introduced the O Organics and Eating Rights brands.
Convenience, club, and dollar stores and other mass retailers
Private-label products are becoming predominant in drugstores, discount stores, and convenience stores. They are also gaining popularity in mass, club, and dollar stores. These stores are launching innovative products in the market, which are replacing branded products in the stores. For instance, in 2014, Dollar General developed its private-label brand Smart & Simple, which includes consumable and non-consumable products. The steady growth of these products in the market has encouraged other companies to develop their private-label products. The penetration of private labels into mass stores has declined in the past few years, but the revenue generated has increased. Penetration in club channels has improved, while revenue generated is at a moderate rate. Several mass channel companies are trying to capture the market by providing excellent services to core shoppers, while club stores are considering broadening private-label products across new consumer segments. Some of the players operating in this segment are 7-Eleven, Sam’s Club, and Casey’s General Stores.
Pharmacy chains
The pharmacy chains segment is expected to grow at a significant rate during the forecast period. Increase in M&A is the major factor driving this market. For instance, CVS Pharmacy acquired Navarro Discount Pharmacy, which had a strong position in the market with its private-label brand Vida Mia. Walgreens has acquired several key private-label brands as part of its Duane Reade and Alliance Boots agreements. The top five categories of private-label products sold through drug channels include vitamins, seeds and nuts, non-chocolate candies, bottled water, and refrigerated entrées. It is projected that the highest-growth will be experienced by the refrigerated products segment, followed by the general merchandise segment during the forecast period. Besides these, beverage sales will also see a growth during the forecast period. Other product segments such as frozen food products and general foods are predicted to have stagnant growth during the forecast period.
The top leading vendors operating in the private-label food and beverage market in the US are:
- Costco
- Kroger
- Trader Joe’s
- Walmart
- Wegmans
Other prominent vendors in the market include A&P, Ahold USA, ALDI, CVS Pharmacy, Delhaize Group, Dollar General, Family Dollar, Giant Eagle, H-E-B, Hy-Vee, Loblaw Companies, Meijer, Metro, Publix, Rite Aid Pharmacy, SuperValu, Target, Wakefern, Walgreens, Whole Foods Market, and Winn Dixie.
A more detailed analysis is available in the Technavio report titled, ‘Private-Label Food and Beverage Market in the US 2016-2020’. Technavio also customizes reports by other regions and specific segments upon request.
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