Private Label Not Just Cheap Alternative

CHICAGO—It's not your grandma's generic peanut butter. Mintel GNPD reports amid rampant private label food product development, manufacturers stay current with the latest food trends. Providing more than just cheap alternatives to national brands, the newest private label foods woo shoppers with premium ingredients, portability and health benefits.

So far in 2009, Mintel GNPD has seen nearly 1,800 new U.S. private label foods appear on retail store shelves: 27 percent of all food products introduced this year. In 2005, private label foods comprised only 13 percent of new food product launches.

"Not only have private label introductions increased, but product innovation is reaching unprecedented highs," stated Krista Faron, senior analyst at Mintel. "Retailers no longer only launch 'me-too' products to compete against major national brands. Instead, private label lines are hotbeds of creativity, driving markets and establishing themselves as trend leaders."

As more than half of Americans try to spend less at restaurants, Mintel sees private label retailers creating premium in-home meals that boast restaurant quality and fresh ingredients.

Portable, high-quality lunches are another hot area of private label development, Faron reported. People want to save money by lunching at the office, and new private label foods make desk-dining easy. Convenience remains a driver for private label prepared foods, but Mintel GNPD sees health and nutrition increasingly influencing product development.

"Private label manufacturers realize 'value' means more than 'low price' to consumers, so they're wisely creating new products that deliver on some of today's most exciting food trends," Faron said.

As the recession causes more Americans to cut down on food spending, both at home and by dining out less, private label has benefited: the US market grew 9.3 percent in 2008 (compared to 4.5 percent for branded food sales). Mintel forecasts it will grow another 8.1 percent by the end of 2009.