Not-So-Name-Brand Nation

Millennials likely to give store brands a go, Mintel report shows

As more customers recognize recent improvements in quality, variety and innovation in store-brand food products, more people buy them. It’s simple cause and effect.

According to a recent Mintel report, “Private Label Foods: What’s Driving Purchase?”, 37% of shoppers in the United States today prefer to purchase store-brand over brand-name products, and young people are largely behind it. Nearly 70% of millennials agree that store-brand products are higher quality than they used to be. Forty-two percent of millennials agree that store brands are more innovative than other brands, and 62% agree that store brands offer as much variety as other brands.

Mintel Food Analyst Amanda Topper believes this represents a window for convenience stores. “Only 12% of shoppers buy store-brand food products at one store, creating an opportunity for convenience retailers to appeal to on-the-go customers,” she told CSP.

C-stores can do a lot to build a sense of loyalty and trust around their store-brand products. Topper suggests advertising price comparisons between the store brands and national brands on your shelves, getting customers’ attention and enticing them to give store brands a try. According to the report, the majority of millennials say they are also more likely to try store-brand products they’ve tried in the store, so sampling may prove beneficial.

Almost two-thirds of millennials say that once they’ve tried one store-brand product, they are likely to try others. “Knowing shoppers are more likely to try other store-brand products after initial trial may create an opportunity for retailers to promote incentives for buying multiple products at once,” Topper said. To reach those customers, she suggests buy-one-get-one offers or weekly discounts on store-brand products across complementary food categories.

Another avenue for reaching millennials is valuing what they value: healthier foods with simpler ingredients.

“Store-brand shoppers are gravitating toward this trend, seeking out store-brand products that list ingredients they recognize and feature prominent claims such as organic, low/no/reduced or made with natural ingredients, right on the packaging,” Topper said.

According to Mintel’s Global New Products Database, private-label food products that claim low/no/reduced allergens or gluten-free have increased 10% to 12% since 2009, indicating another window of opportunity wide open for convenience retailers.

For more information about Mintel’s report, click here.