Private Label Market Trends: Packaging Companies Benefit from Growing Retail Presence
Private label products are on the rise in retail markets, presenting new opportunities for packaging companies that cater to these customers. At the Private Label Manufacturers Association’s annual trade show, speakers highlighted the increasing presence of private labels and their impact on the industry.
According to data from Circana, store brands have outperformed national brands in both unit and dollar sales in the United States. Store brand unit sales saw a 0.4% growth, while national brands experienced a 0.7% decline. In terms of dollar sales, store brands increased by 3.6%, compared to a 1.1% growth for national brands.
Store brands currently hold a market share of 23.1% in unit sales and 21% in dollar sales, with projected revenue expected to reach $280 billion in 2025. This growth represents an all-time high for store brand products.
The growth of private label products is influencing the packaging industry, with packaging manufacturers playing a crucial role in supporting the private label ecosystem. Companies like Lidl US view private brands and shelf-ready packaging as essential components of their business model.
Shelf-ready packaging enables retailers to streamline their operations and provide a more efficient shopping experience for customers. By optimizing packaging design and functionality, retailers can enhance product visibility and drive sales.
One of the key drivers behind the growth of private label products is consumer behavior. During periods of economic uncertainty, consumers tend to gravitate towards more affordable store brands, leading to increased demand for private label products.
Packaging manufacturers are capitalizing on this trend by developing innovative solutions and forging partnerships with product makers and co-packaging businesses. At trade shows like the PLMA event, companies showcase a range of packaging products tailored for the food, beverage, and food service markets.
From flexible packaging options to sustainable materials, packaging companies are aligning their offerings with the evolving needs of private label manufacturers. By staying at the forefront of packaging innovation, companies can meet the demand for high-quality, cost-effective solutions in the private label sector.
Overall, the private label market presents a wealth of opportunities for packaging companies to showcase their expertise and contribute to the success of private label brands. As consumer preferences continue to shift towards store brands, packaging manufacturers play a vital role in shaping the future of retail packaging.