The Rise of the Private Label Industry and Its Impact on the CPG Industry

Let’s accept the fact, the world today is changing at a rapid speed. It has evolved aggressively in recent times as compared to any other time in history. If you are a part of the CPG industry, you must have sensed that your business is under threat from sporadic environmental changes. Things have changed drastically. The development of private label sales now considerably outperforms national brand products, and the effect of known brands, predominantly amongst Millennials, is fading. To know more about the Private Label industry and its potential for growth in the MENA, take part in the 2019 PRIVATE LABEL Summit. 

Increasing Reputation of Private-Label Brands

Customers and vendors are driving the development of private-label brands. Consumers today have no hesitation in procuring private-label brands. The reason for this is that millennials are devouring fewer hang-ups and gaining more insight into these types of products. Such a positive change has also stimulated more stores to announce their private-label products into stores.

Sellers Have Advance View of What Customers Want

Vendors are swift to recognize changes in customer preference. While local retailers look at their customer pool, regional and worldwide brands, on the other hand, tend to look at only upright data that is relevant to their category. What it says is that national brands are more capable of deciding consumer preferences than a local retailer. Consequently, they tend to be gentler to reply, like the drifts toward organic foods, housework products, health and beauty, and another premium, upmarket offering.

Quick Product Development

As more and more customers are on the lookout for better lives and foods, brands are needed to update their products to match specific requests. As per the Consumer Goods Forum, around 180,000 products internationally were reformed in 2016, which is twice the amount in 2015.

Digital Transformation

Digital sales networks have unlocked the door for fresher CPG brands to achieve access and marketplace share. As per the Nielsen data, six big food and beverage producers in the U.S. with collective sales of $233 billion witnessed their combined percentage of the brick-and-mortar marketplace decrease to 31% from 33% in 2015.

Customer Shift from Brands to Stores

Back in the 60s with mass television branding, the national brands had real personality and power. With the rise of online media, the available mediums to connect with potential consumers have significantly increased. Likewise, traditional marketing mediums have lost their ability to pull in public. In short, Vendors have more avenues now to get close to their customers. Also, consumers have a more subjective, tangible association with a seller of the familiarities they have with them.