According to USA Today, private label products are rising in popularity among one of the most sought-after demographics in the market place: Millennials.
The article quotes Phil Lempert, a Los Angeles-based consumer analyst who focuses on food trends: “Millennials care about quality and price and taste; they’re brand agnostic. It’s a sweet spot for Amazon,” he said.
It continues to hit the ball home with additional research study stating that ”a full 88% of consumers say they buy private label, primarily because of price, according to Market Track.”
This trend is encouraging to many in the private label industry as it represents a trend that private label products will continue to be a main competitor for the more expensive “brand” names in the market place.
“We have to ask ourselves, how long was Amazon going to sit by the sidelines and watch a growing industry such as private label supplements and vitamins and not get in on the action. It should be reassuring to our Client’s and those who are considering coming into the private label supplement business that Amazon has chosen our sector out of the many different areas they could choose to sell in as they see a viable future in this arena.” Stefani Thionnet, owner and CEO of Private Label Supplement.
Amazon isn’t the only company boosting their private label muscles. According to an article on Omaha.com, Kroger, one of the nation’s largest supermarket chains, is also bulking up their private label products.
The article states that “Kroger and some other grocery retailers are seeing a growing share of sales come from these private-label products, and shoppers should expect to keep seeing new items and private brands pop up on store shelves… At Kroger, these brands added up to more than $20 billion in annual sales.”
Companies like Costco, WalMart, Target, Hy-Vee are also big leaders in contributing to the rise in popularity of private label products. Take the Kirkland line of products as an example.
According to the Omaha.com article, “Kirkland products make up about 26 percent of Costco sales but only about 18 percent of the items on its shelves, she estimates. Costco aims to see the brand make up as much as 35 percent of its revenue, said Sara al-Tukhaim, director at Kantar Retail.
“Private label is a win for retailers and a win for consumers,” said Rich Vitaro, a director at management consulting firm AlixPartners.
“The fact that private label products are increasing in popularity is news that should be encouraging to our Clients at Private Label Supplement,” said Thionnet.
Thionnet goes on to say that Amazon’s decision to increase their selection of private label products they not only sell, but brand to themselves is a reflection of a positive trend in the industry.
“There is room for everyone in this market and it is key to watch the products Amazon launches as they can see these are positive trends based on what is selling and what is poised to sell from their own intellect so many classify as coveted as Googles’,” said Thionnet.
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