With profit-driven price inflation on the rise, consumers are turning to private label supplements to help them save money. Private label supplements have become increasingly popular in recent months as shoppers look to cut costs while still getting the vitamins and minerals they need. As prices continue to rise, private label supplements are flying off the shelves. In this blog post, we’ll discuss how these market dynamics are highlighting the benefits of building a private label brand for retailers.
High Consumer Goods Prices Are Driving New Purchasing Decisions
The cost of living is increasing for everyone, but the prices of food and other consumer goods have been rising at an alarming rate. According to the U.S. Department of Agriculture, food prices have risen 10.1% from January 2022 to January 2023, and are expected to rise another 7.9% in 2023.
These price increases have been driven by food companies passing their costs onto consumers, subsequently generating windfall profits as well as increased demand due to the pandemic, supply chain disruptions, and higher costs of production.
As a result, consumers are feeling the pinch at the grocery store and in the supplement aisle, and are turning to higher-value private label supplements.
Consumers Are Buying More Private Label Supplements
41% of shoppers surveyed by the Food Industry Association (FMI) said that they bought more store brands than before the pandemic and 77% said they would continue.
According to BizRate Insights, the most common reason by far (89.7%) for switching to a private label brand was better value than the national brands. Private label brands often had more options that fit consumers’ needs better. ()
Clarkston Consulting’s research revealed that nearly three-quarters of surveyed consumers said they believed private label brands offer the same or higher quality than the national brands.
With price and selection driving the initial purchase decision, quality and taste ensure that purchasing behavior continues.
Natural Product Retailers Are Embracing Private Label Brands
Private labels offer natural product retailers a competitive edge. They can create and differentiate their own branded product line that has a loyal consumer base and adds to their bottom line. Consumers are more likely to recognize a retailer’s own brand, as opposed to a generic label or one of the large manufacturers. With private label brands, retailers are able to provide their customers with a wide range of quality supplements and health products at an affordable price.
According to FMI, 83% of retailers surveyed plan to moderately or significantly expand their private brands and 69% said premium private-label categories have a big opportunity for growth.
As inflation continues to climb, it’s no surprise that retailers and consumers alike are turning to private label supplements.