Private Label Beverages - US
Report description
Retailers could simply offer to refund the purchase price if a customer returns the unused portion of the beverage they purchased and also provides an explanation for why they did not view the beverage as satisfactory.
Table of contents
Scope and ThemesWhat you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
Executive Summary
Private label growing slightly faster than overall beverage sales
Supermarkets remain dominant sales channel
Innovations often appeal to foodies and those interested in BFY
Most can identify private label brands but BFY labels sometimes mistaken
Private label milk, juice, and water often resonate with consumers
Private label tea and soft drinks do not generally perform as well
Insights and Opportunities
Private label makers can offer guarantee to drive trial and adoption
Consider blind taste tests
Work to create fan clubs with independent third parties
Figure 1: Traderjoe’sfan.com logo, August 2011
Inspire Insights
Inspire Trend: “Let’s Make a Deal”
Market Size and Forecast
Key points
Private label sales accelerate in 2011 and continue to grow faster than overall sales
Figure 2: FDMx sales of total beverages vs. private label beverages, 2006-11
Figure 3: FDMx sales and forecast of private label beverages, at current prices, 2006-16
Figure 4: FDMx sales and forecast of private label beverages, at inflation-adjusted prices, 2006-16
Market Drivers—Health and Wellness Trends
Obesity rates steady, but still a cause for concern
Figure 5: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2008
Obesity affects more than a third of all children and teens aged 6-19
Figure 6: Prevalence of obesity among children and adolescents aged 2-19, 1976-2008
Diabetes, the ugly expression of obesity, threatens beverage growth
Figure 7: Prevalence of diagnosed and undiagnosed diabetes among adults aged 20+, 2005-08
More than half of all adults watch their diets; a majority of those seek low-fat/low-sugar food
Figure 8: Trends in watching diet among adults aged 18+, 2005-10
Figure 9: Trends in watching diet among adults aged 18+, 2005-10
Let’s Move program likely to influence choices within nonalcoholic beverages
High-fructose corn syrup continues to bother consumers
Market Drivers—Demographic and Economic Factors
Households with children are key driver in the market
Figure 10: Households, by presence of children, 2000-10
Kids’ population growth lower during 2011-16 compared to 2006-11
Figure 11: Personal consumption of different types of beverage among kids, April 2009-June 2010
Figure 12: Population of kids aged 6-11, 2006-16
Teen population offers little growth for 2006-11, better outlook during 2011-16
Figure 13: Personal consumption of different types of beverage among teens, April 2009-June 2010
Figure 14: Teen population, by age, 2006-16
Black and Hispanics are growth-driving population groups
Figure 15: Population, by race and Hispanic origin, 2006-16
Figure 16: U.S. population buying power, by race and Hispanic origin, 1990-2014
High unemployment rate keeps consumer spending conservative
Figure 17: Employment status of the civilian noninstitutional population aged 16+, 2000-11 (month to date)
Continued unemployment woes signal mixed outlook for private labels
Figure 18: Unemployment status (seasonally adjusted) among civilian noninstitutional population, by age, gender, and race/Hispanic origin, July 2010-July 2011
Competitive Context
Branded beverages pose strong competition
Aggressive pricing on some big brands undermines demand for private label
Segment Performance
Key points
FDMx sales and forecast of private label beverages, by segment
Figure 19: FDMx sales and forecast of private label beverages, at current prices, by segment, 2006-16
Figure 20: FDMx sales of private label beverages, by segment, 2010 and 2011
Segment Performance—Milk, Soy Milk, and Yogurt Drinks
Key points
Milk sales show accelerated growth in 2011
Figure 21: FDMx sales of total milk, soy milk, and yogurt drinks vs. private label milk, soy milk, and yogurt drinks, 2006-11
FDMx sales and forecast of milk, soy milk, and yogurt drinks
Figure 22: FDMx sales and forecast of private label milk, soy milk, and yogurt drinks, 2006-16
Segment Performance—Juice and Juice Drinks
Key points
Private label juice sales decline as market reaches saturation
Figure 23: FDMx sales of total juice and juice drinks vs. private label juice and juice drinks, 2006-11
FDMx sales and forecast of private label juice and juice drinks
Figure 24: FDMx sales and forecast of private label juice and juice drinks, 2006-16
Segment Performance—Bottled Water
Key points
Bottled water sales continue to climb
Figure 25: FDMx sales of total bottled water vs. private label bottled water, 2006-11
FDMx sales and forecast of private label bottled water
Figure 26: FDMx sales and forecast of private label bottled water, 2006-16
Segment Performance—Carbonated Drinks
Key points
Sales of carbonated private label SKUs growing steadily
Figure 27: FDMx sales of total carbonated drinks vs. private label carbonated drinks, 2006-11
FDMx sales and forecast of private label carbonated drinks
Figure 28: FDMx sales and forecast of private label carbonated drinks, 2006-16
Segment Performance—Coffee
Key points
Growth of private label coffee sales slows
Figure 29: FDMx sales of total coffee and vs. private label coffee, 2006-11
FDMx sales and forecast of private label coffee
Figure 30: FDMx sales and forecast of private label coffee, 2006-16
Segment Performance—Tea and RTD Tea
Key points
Private label tea sales slow after period of impressive growth
Figure 31: FDMx sales of total tea and RTD tea vs. private label tea and RTD tea, 2006-11
FDMx sales and forecast of private label tea and RTD tea
Figure 32: FDMx sales and forecast of private label tea and RTD tea, 2006-16
Segment Performance—Other
Key points
Very little penetration in “other” category, which includes sports drinks
Figure 33: FDMx sales of total other* beverages vs. other private label beverages, 2006-11
FDMx sales and forecast of other private label beverages
Figure 34: FDMx sales and forecast of other private label beverages, 2006-16
Retail Channels
Key points
Growth in “other” channels continues to outpace grocery
Figure 35: U.S. FDMx sales of private label beverages, by channel, 2006-11
Figure 36: Indexed growth of FDMx retail sales of private label beverages, by channel, 2006-11
Figure 37: Share of FDMx retail sales of private label beverages, by channel, 2006-11
Retail Channels—Supermarkets
Key points
Private label sales at supermarkets pick up after sharp 2009 drop
Figure 38: U.S. Supermarket sales of beverages, total vs. private label, 2006-11
Figure 39: U.S. sales of private label beverages at supermarkets, 2006-11
Retail Channels—Other Channels
Key points
FDMx sales of private label beverages expected to accelerate in 2011
Figure 40: Other FDMx channel sales of beverages, total vs. private label, 2006-11
Figure 41: Other FDMx channel sales of private label beverages, 2006-11
Companies and Brands
Overview
Safeway
Kroger
Wegmans
Walmart
Target
Trader Joe’s
Innovations and Innovators
Overview
Juice and juice drinks
Soda
Coffee and RTD coffee
Tea
Bottled water
Marketing Strategies
Many private labels brands receive very little promotional support
Safeway
Facebook
Website
Figure 42: Quantcast.com estimates for Safeway.com, August 2011
Wegmans
Twitter
Website
Figure 43: Quantcast.com estimates for Wegmans.com, August 2011
Kroger
Facebook
Website
Figure 44: Quantcast.com estimates for Kroger.com, August 2011
Incidence of Purchasing Store Brand Beverages
Key points
Private label popular across demographic segments
Figure 45: Incidence of purchasing store brand and name brand beverages, by age, May 2011
Private label somewhat more popular among lower-income segments
Figure 46: Incidence of purchasing store brand and name brand beverages, by household income, May 2011
Figure 47: Types of store brand beverage purchased, by household income, May 2011
Milk is by far the most popular private label beverage
Figure 48: Types of store brand and name brand beverage purchased, May 2011
Women more likely to purchase private label milk
Figure 49: Types of store brand beverage purchased, by gender, May 2011
Perceptions of Quality Compared to National Brands
Key points
Young adults more likely to see no difference between store and name brand soda
Figure 50: How store brand soda compares to national brands on quality, by age, May 2011
Lower-income consumers more likely to see national and store brands as equal in quality
Figure 51: How store brand soda compares to national brands on quality, by household income, May 2011
Most find no difference between store brand and national brand milk
Figure 52: How store brand milk and yogurt drinks compare to national brands on quality, by age, May 2011
Those earning $150K+ most likely to see name brand coffee as better
Figure 53: How store brand tea and coffee compare to national brands on quality, by household income, May 2011
18-24s most likely to see name brand bottled water as better
Figure 54: How store brand bottled water compares to national brands on quality, by age, May 2011
Consumers from households with incomes of $50K+ more likely to see name brand water as superior
Figure 55: How store brand bottled water compares to national brands on quality, by household income, May 2011
Those aged 65+ are least likely to say name brand juice drinks are better in quality
Figure 56: How store brand juice and powdered drink mixes compare to national brands on quality, by age, May 2011
18-34s likely to be receptive to private label sports and energy drinks
Figure 57: How store brand sports and energy drinks compare to national brands on quality, by age, May 2011
Ability to Identify Private Labels
Key points
Supermarket store brands are generally well-identified
Figure 58: Awareness of supermarket store brand status, May 2011
Non-supermarket private labels, especially Walmart, often familiar to shoppers
Figure 59: Awareness of non-supermarket store brand status, May 2011
Supermarket Private Labels
Key points
Trader Joe’s a leader in private label beverage
Figure 60: Supermarket store brands purchased, May 2011
Certain private label brands heavily used by upper-income segments
Figure 61: Supermarket store brands purchased, by household income, May 2011
Mass, Club, Convenience, and Drug Store Private Labels
Key points
Walmart’s labels among most popular
Figure 62: Non-supermarket store brands purchased, May 2011
Walmart store brand beverages popular with lower-income segments
Figure 63: Non-supermarket store brands purchased, by household income, May 2011
Brand Choice in Different Nonalcoholic Beverage Segments
Key points
Private label frozen OJ used by four in 10
Figure 64: Brands of frozen orange juice consumed, by household income, February 2010-March 2011
Private label somewhat less popular among RTD OJ users
Figure 65: Brands of bottled orange juice consumed, by household income, February 2010-March 2011
Less than half use tomato/vegetable juice
Figure 66: Household consumption of tomato/vegetable juice, by age, February 2010-March 2011
Tomato-based products most popular
Figure 67: Brands of tomato and vegetable juice consumed, by age, February 2010-March 2011
Brands of other fruit juice and juice drinks consumed, by age
Figure 68: Brands of other fruit juices and juice drinks consumed, by age, February 2010-March 2011
Store brand bottled water more popular with 35-54 year olds
Figure 69: Brands of noncarbonated bottled water consumed, by age, February 2010-March 2011
Higher-end brands popular with upper-income segments
Figure 70: Brands of sparkling water consumed, by household income, February 2010-March 2011
Store brand tea more popular with lower-income segments
Figure 71: Bagged tea brands consumed, by household income, February 2010-March 2011
Store brand iced tea mixes most popular with lower-income households
Figure 72: Iced tea mix brands consumed, by household income, February 2010-March 2011
Coca-Cola Classic most popular across age groups
Figure 73: Regular cola brands consumed, by age, February 2010-March 2011
Coca-Cola is dominant across income segments
Figure 74: Regular cola brands consumed, by household income, February 2010-March 2011
Sprite most popular non-cola soda, with 7 UP and Dr Pepper close behind
Figure 75: Other regular soda brands consumed by 10% or more of users, by age, February 2010-March 2011
Sprite most popular overall, especially with households earning $150K+
Figure 76: Other regular soda brands consumed by 10% or more of users, by household income, February 2010-March 2011
Coke and Pepsi are the dominant diet cola brands
Figure 77: Diet cola brands consumed, by age, February 2010-March 2011
Diet Coke most popular across incomes groups, followed by Pepsi
Figure 78: Diet cola brands consumed, by household income, February 2010-March 2011
Diet Dr Pepper also popular, especially with those aged 25-44
Figure 79: Other carbonated diet drinks brands consumed, by age, February 2010-March 2011
Diet Dr Pepper most popular across income segments
Figure 80: Other carbonated diet drinks brands consumed, by household income, February 2010-March 2011
Attitudes toward Store Brands
Key points
Young adults show resistance to private label beverages
Figure 81: Factors influencing preference for name brand beverages, by age, May 2011
Older consumers more convinced of improved store brand quality
Figure 82: Factors influencing preference for store brand beverages, by age, May 2011
18-44s more likely to be driven to private label by economy
Figure 83: How economic concerns impact store brand beverage purchase, by age, May 2011
Most parents willing to buy store brands for their kids
Figure 84: Parents, kids and store brand beverages, by gender, May 2011
Impact of Race and Hispanic Origin
Key points
Blacks and Asians less likely to purchase store brand beverages
Figure 85: Incidence of purchasing store brand and name brand beverages, by race/Hispanic origin, May 2011
Asians least likely to buy store brand milk
Figure 86: Types of store brand beverage purchased, by race/Hispanic origin, May 2011
Blacks are most likely to buy name brand noncarbonated bottled water
Figure 87: Types of name brand beverage purchased, by race/Hispanic origin, May 2011
Trader Joe’s very popular across races
Figure 88: Supermarket store brands purchased, by race/Hispanic origin, May 2011
Walmart’s Great Value most popular non-supermarket store brand
Figure 89: Non-supermarket store brands purchased, by race/Hispanic origin, May 2011
Blacks and Hispanics have favorable attitudes toward store brand soda
Figure 90: How store brand soda compares to national brands on quality, by race/Hispanic origin, May 2011
Most across races see no difference between store and name brand milk
Figure 91: How store brand milk and yogurt drinks compare to national brands on quality, by race/Hispanic origin, May 2011
Asians are most likely to say that name brand tea is of better quality
Figure 92: How store brand tea and coffee compare to national brands on quality, by race/Hispanic origin, May 2011
Asians are most likely to say that store brand water is of better quality
Figure 93: How store brand bottled water compares to national brands on quality, by race/Hispanic origin, May 2011
Many Hispanics see store and name brand sports drinks as equal
Figure 94: How store brand sports and energy drinks compare to national brands on quality, by race/Hispanic origin, May 2011
Custom Consumer Groups
Name brand soda most frequently seen as better quality
Figure 95: How store brands compare to national brands on quality, primary/shared shoppers only, May 2011
Juice and soda most popular with teens
Figure 96: Incidence of beverage use among teens, October 2009-December 2010
Teens tend to be heavy users of juice and soda
Figure 97: Volume of beverage consumed per week among teens, by segment, October 2009-December 2010
Cluster Analysis
No-Difference, Recommenders
Demographics
Characteristics
Opportunity
Name-Brand Loyalists
Demographics
Characteristics
Opportunity
Un-Opinionated drinkers
Demographics
Characteristics
Opportunity
Cluster characteristic tables
Figure 98: Private label beverage clusters, May 2011
Figure 99: Grocery shopping responsibility, by private label beverage clusters, May 2011
Figure 100: How store brand soda compares to national brands on quality, by private label beverage clusters, May 2011
Figure 101: How store brand milk and yogurt drinks compare to national brands on quality, by private label beverage clusters, May 2011
Figure 102: How store brand tea and coffee compare to national brands on quality, by private label beverage clusters, May 2011
Figure 103: How store brand bottled water compares to national brands on quality, by private label beverage clusters, May 2011
Figure 104: How store brand juice and powdered drink mixes compare to national brands on quality, by private label beverage clusters, May 2011
Figure 105: How store brand sports and energy drinks compare to national brands on quality, by private label beverage clusters, May 2011
Figure 106: Factors influencing preference for name brand beverages, by private label beverage clusters, May 2011
Figure 107: Factors influencing preference for store brand beverages, by private label beverage clusters, May 2011
Cluster demographic tables
Figure 108: Private label beverage clusters, by gender, May 2011
Figure 109: Private label beverage clusters, by age, May 2011
Figure 110: Private label beverage clusters, by household income, May 2011
Figure 111: Private label beverage clusters, by race, May 2011
Figure 112: Private label beverage clusters, by Hispanic origin, May 2011
Cluster methodology
Appendix A—Additional Consumer Tables
The household shopper
Figure 113: Responsibility for household shopping, by gender, May 2011
Incidence of purchasing name brands and store brands
Figure 114: Incidence of purchasing store brand and name brand beverages, by gender, May 2011
Types of name brand beverage purchased
Figure 115: Types of name brand beverage purchased, by age, May 2011
Figure 116: Types of name brand beverage purchased, by household income, May 2011
How store brands compare to national brands
Figure 117: How store brand milk and yogurt drinks compare to national brands on quality, by household income, May 2011
Figure 118: How store brand tea and coffee compare to national brands on quality, by age, May 2011
Figure 119: How store brand juice and powdered drink mixes compare to national brands on quality, by household income, May 2011
Figure 120: How store brand sports and energy drinks compare to national brands on quality, by household income, May 2011
Supermarket, mass, club, convenience, and drug store private labels
Figure 121: Supermarket store brands purchased, by age, May 2011
Figure 122: Non-supermarket store brands purchased, by gender, May 2011
Figure 123: Non-supermarket store brands purchased, by age, May 2011
Appendix—NAB Usage Incidence and Volume Consumption
Milk
Low-fat most popular variety of milk
Figure 124: Household consumption of milk, by age, February 2010-March 2011
Affluents tend to prefer BFY varieties
Figure 125: Household consumption of milk, by household income, February 2010-March 2011
Fruit juice and juice drinks
18-24s drink more OJ than older consumers
Figure 126: Household consumption of frozen orange juice, by age, February 2010-March 2011
Use of frozen OJ highest in <$50K segment
Figure 127: Household consumption of frozen orange juice, by household income, February 2010-March 2011
Household consumption of bottled orange juice, by household income
Figure 128: Household consumption of bottled orange juice, by household income, February 2010-March 2011
Nearly seven in 10 use “other” juices and juice drinks
Figure 129: Household consumption of other fruit juices and juice drinks, by age, February 2010-March 2011
Bottled Water
Older consumers somewhat less likely to buy noncarbonated bottled water
Figure 130: Personal consumption of noncarbonated bottled water, by age, February 2010-March 2011
Those from upper-income segments more likely to drink bottled water
Figure 131: Personal consumption of noncarbonated bottled water, by household income, February 2010-March 2011
Among sparkling water drinkers 65+ are heavy users of plain varieties
Figure 132: Personal consumption of sparkling water, by age, February 2010-March 2011
Tea and RTD Tea
Older adults more likely to use tea in their household
Figure 133: Household consumption of bagged tea, by age, February 2010-March 2011
Decaffeinated and green tea are popular with higher-income consumers
Figure 134: Household consumption of bagged tea, by household income, February 2010-March 2011
Young adults more likely to use instant iced tea mix
Figure 135: Household consumption of iced tea mix, by age, February 2010-March 2011
Highest-income households most use presweetened sugar-free tea mix
Figure 136: Household consumption of iced tea mix, by household income, February 2010-March 2011
RTD tea most popular among 18-24s
Figure 137: Personal consumption of RTD iced tea, by age, February 2010-March 2011
Those from higher-income segments more interested in diet RTD tea
Figure 138: Personal consumption of RTD iced tea, by household income, February 2010-March 2011
Regular soda
18-24 year olds most likely to drink regular cola
Figure 139: Personal consumption of regular cola, by age, February 2010-March 2011
Those with household incomes less than $50K heaviest regular cola users
Figure 140: Personal consumption of regular cola, by household income, February 2010-March 2011
18-24 year olds most likely to drink non-cola sodas
Figure 141: Personal consumption of other regular soda, by age, February 2010-March 2011
Those earning less than $25K most likely to drink non-cola soda
Figure 142: Personal consumption of other regular soda, by household income, February 2010-March 2011
Diet soda
Diet colas most popular among those aged 35 and older
Figure 143: Personal consumption of diet cola, by age, February 2010-March 2011
Those with household incomes more than $50K more likely to drink diet cola
Figure 144: Personal consumption of diet cola, by household income, February 2010-March 2011
Appendix—Trade Associations
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