Why millennials love store brands

by Monica Watrous
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Brand trust is particularly strong for millennials, who are more likely to buy store brand foods in general (97% compared with 94% of all shoppers).

CHICAGO — Forty-two per cent of millennial shoppers perceive private label foods as more innovative than branded products, according to a recent report from market research firm Mintel. Older shoppers, conversely, are more likely to consider store brand offerings as generic or inconsistent in quality.

Recent innovation has vaulted the category of private label from “off-brand” to on-trend. Many consumers said store brands match name brands in flavor, packaging and assortment, according to Mintel, and 37% of U.S. consumers prefer to buy store brands over national brands. Sixty-three per cent of these private label loyalists perceive the products as higher in quality than before. Among millennials, the figure skews closer to 70%.

“We’re seeing a shift in consumer thinking at the grocery store,” said Amanda Topper, Mintel food analyst. “Name brand power no longer holds the most weight. Quality, price and innovation are carving out a larger portion of consumer mindshare.”

Nearly 70% of store brand shoppers report trusting certain store brands more than others, and 64% are likely to try other store products once they’ve tried one. Brand trust is particularly strong for millennials, who are more likely to buy store brand foods in general (97% compared with 94% of all shoppers).

Cost savings is a priority for private label consumers, but not at the expense of sacrificing quality, Ms. Topper noted. A key for further engaging private label consumers is enhancing offerings through improved quality, variety and innovation. More than a third (35%) of store brand shoppers indicated a preference for functional packaging that is easy to open or resealable, while 45% showed interest in products made in the United States, and 55% want more product for the same price.

Product claims also factor into private label purchases. Thirty per cent of consumers who buy store brand foods are more likely to purchase products with no artificial ingredients, according to Mintel. Additionally, the number of private label food products launched between 2009 and 2014 featuring an allergen-related claim has increased nearly 12%, and gluten-free products have grown nearly 11%.

“Along with a move toward healthier eating and better-for-you foods, many private label food products are focusing on clean labels, with easy-to-read ingredients and product claims,” Ms. Topper said. “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.” 

To lure older consumers to the category, retailers may consider introducing more premium product lines with organic, non-bioengineered or vegetarian products, which shoppers reported are lacking in the current market, Ms. Topper said.
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