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May 28, 2020
PART 4 – RECESSIONARY LESSONS TO APPLY TO PRIVATE LABEL TODAY
Special COVID-19 Series:
Recession-Proof Your Business
Read Other Recession-Focused Reports: Part 1 - How the Great Recession Reshaped the CPG Demand Curve
Part 2 - Maintaining Pricing Discipline in a Recession
Part 3 - How Big Brands Performed During the Great Recession
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2
Executive SummaryContext
Since the last recession, select retailers have invested
heavily in Private Label programs, many with tiered
offerings, product features and benefits, not just price.
The COVID-19 recession illustrates the bifurcation between the hardest hit – >40M Americans filing for unemployment – and the
gainfully employed who are shifting purchases to remain comfortable in their homes.
Private Label holds potential for retailers who want to reach
consumers across the economic spectrum, both as a trip-driver
and loyalty builder, and is an increasingly competitive threat to national brands.
IRI predicts 2020-21 PL growth of up to $20B, gaining an additional 0.6 ppt share.
LESSONS FROM
THE GREAT RECESSION
EMERGING TRENDS
IN THE 2020 RECESSION
• Recessionary trends illustrate the power of Private Label during a down economy; $8B increase between 2008-2010.
• Where price gaps between Private Label and National Brands existed, PL was favored; distribution also had positive impact on PL sales.
• Costco, Kroger, Aldi, Walmart and Target contributed the most to PL dollar share gains.
• Categories that already had strong PL development gained the most.
HOW CAN
IRI HELP?
• Patterns observed in the Great Recession are emerging in the COVID-19-induced recession.
• Both edible and nonedible Private Label outpaced National Brand growth since 2017, and continues to grow in 2020.
• Categories that already have strong Private Label development continue to gain the most.
• Walmart, Costco and Sam’s Club are driving most of the current PL growth.
• Private Label risk to brands is high when differentiation and loyalty are low, and the financial incentive for both shoppers and retailers is strong.
Private Label programs require
sophisticated strategies. IRI assesses
risk and opportunity, pricing and
distribution, innovation and marketing.
• The IRI COVID-19 Impacts
• The COVID-19 Dashboard
• IRI CPG Demand Index™
• IRI Inflation Tracker™
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 3
Private Label During the Great Recession
• Between 2008-2010, Food & Beverage Private Label share
grew 0.8 ppt, with $2.8B in PL share gains and $4.5B
incremental sales increase. Similarly, nonedible grew
2.2 ppt during the same period for net sales of $3.4B.
• PL Food & Beverage grew mostly through volume, but
also through price. In contrast, branded gains on pricing
were offset by volume contraction.
• 20 Food & Beverage categories, mostly refrigerated /
frozen and snacks, drove >90% of PL sales. PL gained
traction in categories where it already had strong presence.
• Five retailers (Costco, Kroger, Aldi, Walmart, Target)
contributed ~75% of PL gains, leveraging their strength
to make their brands recognizable to shoppers.
• PL helped most of the top 5 retailers gain loyalty but for
others, PL gains did not necessarily increase share of
wallet or buyers.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4
Private Label Food & Beverage Growth Mostly
Outpaced Branded Growth During the Great Recession
Food & Beverage Branded and Private Label – All Outlets / % Change vs. YAG in $ SalesPrivate Label Branded
6.9
8.0
11.1
7.3
12.5
10.29.4 9.2
5.3
2.6
-1.1-0.2
3.93.1
4.6 4.4
2.8
5.2
6.25.4
4.7
0.6
5.6
2.8
5.3 5.1
2.4
3.9
0.5
-0.2 -0.4
-1.4
-0.4
0.41.1
2.1
Q2
2010
Q1
2010
Q4
2009
Q3
2009
Q4
2010
Q2
2011
Q3
2010
Q1
2011
Q1
2007
Q2
2008
Q1
2008
Q4
2007
Q3
2007
Q2
2009
Q1
2009
Q4
2008
Q3
2008
Q2
2007
THE GREAT RECESSION
Source: IRI Archived POS Data 2007-2011. FDMx refers to Food-Drug-Mass (excluding Walmart).
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Over 2+ Years of the Great Recession, Private Label Share
Grew, Accounting for Billions of Dollars in Sales Gains
F&B Private Label Dollar Share of Category (%), Sales Change from 2008 to Q2 2011 – All Outlets
$4.5B Private Label Growth Decomposed
• How – Price vs. volume? If volume, what is the role of
(value) pricing compared to branded vs. distribution vs.
merchandising (using two categories, cookies and salty
snacks, as examples)?
• Where / Why – Which categories? Which retailers? Why?
• Who – Which shopper segments? What is the
contribution of Heavy users?
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) and Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels).
$4.5B Incremental PL Sales $2.8B from PL Share Gains / $1.7B from Category Sales Increases
Private Label share in Nonedible also grew 2.2 ppts (from 14.4% to 16.6%) in the same time period, translating into sales
of $3.9B offset by $0.5B sales losses from declines in category sales (net PL sales increase in Nonedible = $3.4B).
17.8 17.8 18.5 18.6
2008
+0.8
20102009 Q2 2011
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Private Label Increased Volume and Price
While Brands Lost Volume Sales as Prices Went Up
Δ Dollar Sales
Δ Price per Vol
Δ Vol Sales
7.1% 1.7%
1.0% 4.3%
6.0% -2.4%
Source: IRI Archived POS Data. FDMx refers to Food-Drug-Mass (excluding Walmart) / Note: Change in price per vol = change in price per vol for each category weighted by category PL/Branded $ sales
% Change, Q2 2011 vs. 2008 – All OutletsPrivate Label Branded
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 7
Increases in Price Gaps Between Brands and Private Label
Favored Private Label but Magnitude of Gaps Varied Among Retailers
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart; Costco not available) / NOTE: Price Gap = (National Brand price - Private Label price)/National brand price
Corr = 0.14
Target
Valero
CVS
Albertsons
Big Y
Freds Dollar
Supervalu Shoppers Food
Penn TrafficBJ’s
-80
Ch
an
ge i
n P
L v
ol sh
are
(p
pt)
Change in price gap (ppt)
605040302010
Kroger Banner
0-10-20-30-40-50
Low Positive Impact on PL Share
Private Label Price Gaps, Share Changes – Cookies
52 WE Q2 2011 vs. 2008
Private Label Price Gaps, Share Changes – Salty Snacks
52 WE Q2 2011 vs. 2008
DrugFood Mass/Club/Dollar Conv DrugConvMass/Club/DollarFood
High Positive Impact on PL Share
Corr = 0.56
Ch
an
ge
in
PL
vo
l s
ha
re (
pp
t)
Target
Kroger Banner
Change in price gap (ppt)
6050403020100-10-20-30-70-80
WAWA
Minyard
Valero
Supervalu Farm Fresh
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 8
Distribution Also had a Positive Impact on Private Label
Share, Though Less Than the Impact of Price Gaps
Private Label Distribution, Share Changes – Cookies
52 WE Q2 2011 vs. 2008
Private Label Distribution, Share Changes – Salty Snacks
52 WE Q2 2011 vs. 2008
DrugFood Mass/Club/Dollar Conv DrugConvMass/Club/DollarFood
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) / NOTE: PL share of items = PL Avg Items per Store Selling/Total Avg Items per Store Selling.
Corr = 0.30
Ch
an
ge i
n P
L v
ol sh
are
* (p
pt)
Change in PL share of items in store* (ppt)
108420-2-4-6-8
Valero
CVS
Penn Traffic
BJ’s
Target
12 14
Corr = 0.19
Ch
an
ge
in
PL
vo
l s
ha
re*
(pp
t)
Kroger Banner
Change in PL share of items in store* (ppt)
WAWA
CVS
Minyard
Supervalu Express
Target
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
-8 -6 -4 -2 0 2 4 6 8 10 12 14
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Kroger Banner
Medium Positive Impact on PL Share Low Positive Impact on PL Share
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 9
Merchandising Support Had Minimal Impact on Private
Label Share Gains Throughout the Great Recession
Private Label Merchandising, Share Changes – Cookies
52 WE Q2 2011 vs. 2008
Private Label Merchandising, Share Changes – Salty Snacks
52 WE Q2 2011 vs. 2008
DrugFood Mass/Club/Dollar Conv DrugConvMass/Club/DollarFood
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) / NOTE: PL share of merchandising = PL total points of distribution, any merch / Branded total points of distribution, any merch
WAWA
CVS
Minyard
Kroger City Market
Kroger King Soopers
C Farms
Duane Reade
Kroger Banner
Supervalu Express
Kmart
Target
Ch
an
ge i
n P
L v
ol sh
are
* (p
pt)
Change in PL share of merchandising vs. Branded* (ppt)
Corr = 0.08
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
-8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24
Ch
an
ge i
n P
L v
ol sh
are
* (p
pt)
Change in PL share of merchandising vs. Branded *(ppt)
CVS
Duane Reade Target
Kroger Banner
Corr = 0.10
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
-8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24
Low Impact on PL Share Low Impact on PL Share
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 10
20 Food & Beverage Categories Drove 93% of Sales
Growth, Led by Refrigerated / Frozen Items and Snacks
Categories Driving F&B Private Label Dollar Sales Change / 52 WE Q2 2011 vs. 2008 - All Outlets
Contribution to Total F&B Private Label $ Sales Gain in All Outlets
3.9
3.6
3.5
3.4
3.0
2.9
2.7
2.6
2.3
2.2
2.1
1.7
Canned Meat
Breakfast Meats
4.7
4.3
Sugar
Poultry - Fz/Rfg
Salty Snacks
5.5
Cookies
4.5
Natural Cheese
Pastry/Doughnuts
7.5
Seafood - Fz 7.6
Salad/Coleslaw - Rfg 11.7
Meat - Rfg 12.8
Butter
Total 100.0
Other Snacks
Baked Goods - Rfg
All Other 7.5
Meat - Fz
Vegetables - Ss
Creams/Creamers
Category
1.3%
1.5%
2.4%
6.5%
1.7%
1.8%
1.3%
1.3%
0.9%
1.4%
0.5%
1.5%
1.9%
0.9%
0.7%
1.6%
0.3%
0.8%
3.1%
0.4%
68.4%
30.0%
14.3%
3.1%
3.5%
4.0%
3.5%
1.1%
2.1%
6.6%
4.7%
9.3%
2.6%
0.5%
4.4%
5.3%
2.5%
13.8%
1.4%
3.1%
2.4%
-0.2%
% of Total PL $ Sales
PL $ Share Gain (ppt)
MORE THAN FAIR SHARE CONTRIBUTION
Note: Top 20 categories based on contribution to total F&B PL $ sales gain. All Other Sales Gains: 58%; All Other Sales Losses: -49%
Bottled Water
Breakfast Food - Fz
Snack Nuts/Seeds/Corn Nuts
Source: IRI Archived POS Data. FDMx refers to Food-Drug-Mass (excluding Walmart) and Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 11
Categories That Contributed the Most to Private Label Dollar Sales
Gains Were Mostly Where Private Label Was Already Highly Developed
Top 20 Private Label Dollar Sales Gain Contribution F&B Categories
Private Label Share and Share Change, 52 WE Q2 2011 vs. 2008 – All Outlets
5
10
15
20
25
30
35
40
45
50
55
60
65
70
7.06.56.05.55.04.54.03.53.02.52.01.51.0
PL Dollar Share of Category Chg 52 wks end 5/15/2011 vs. 2008 (ppt)
30.514.09.08.5
Breakfast Food - Fz
Bottled Water
Creams/Creamers
Baked Goods - Rfg
Vegetables - Ss
Poultry - Fz/Rfg
Meat - Fz
Snack Nuts/Seeds/Corn Nuts
Canned MeatCookies
Pastry/Doughnuts
0.50.0 8.0
Other Snacks
7.5
Breakfast Meats
Salty Snacks
ButterSugar
Natural CheeseSeafood - Fz
Salad/Coleslaw - Rfg
Meat - Rfg
All Outlets
(0.8 ppt)
All Outlets
(18.6%)
PL Developing
PL Strong
$600MM
PL $ Sales in Category,
Relative Proportion
Bubble Size
Source: Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) and Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
52
WE
5/1
5/2
01
1 P
L $
Sh
are
of
Cate
go
ry (
%)
Note: Top 20 categories based on contribution to total F&B PL Dollar sales gain.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 12
Private Label Dollar Sales Gains Were Largely Driven by
a Few Retailers; ~75% of Total Gain Driven by Five Retailers
Retailers Driving Private Label F&B Dollar Sales Gain / 5.15.2011 vs. 2008 – Total F&B
Contribution to Total Private Label Dollar Sales GainRetailers
Walgreens
All Other
Winn Dixie
SuperValu
Total
Family Dollar
Safeway
Food Lion
Rite Aid
Harris Teeter
Wakefern
CVS
Publix
Ahold
Wegmans
Sam’s Club
Target
Walmart
Aldi
Kroger
Costco 3.2%
0.5%
4.1%
1.4%
1.9%
2.2%
2.2%
0.1%
2.7%
-0.6%
0.2%
-0.8%
0.9%
1.3%
0.3%
-0.9%
1.1%
0.3%
-2.9%
1.7%
-0.1%
5.7%
9.3%
5.7%
18.9%
2.2%
1.6%
1.3%
2.8%
0.4%
3.6%
0.4%
1.2%
0.7%
0.2%
2.1%
0.1%
3.8%
1.2%
0.7%
3.7%
34.6%
Source: IRI Archived Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
Dollar General 2.1
1.5
1.5
1.3
1.2
0.6
0.6
0.2
0.2
0.5
1.3
2.5
Top 5 retailers
accounted for
~75% of
growth
5.4
100.0
3.8
4.4
6.2
10.4
13.1
15.8
17.8
18.4
% of Total PL $ Sales
PL $ Share Gain (ppt)
MORE THAN FAIR SHARE CONTRIBUTION
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 13
Retailers That Contributed the Most to Private Label Dollar Share Gains
Were More Successful Than Others in Driving Store Brand Recognition
% of Private Label Recognition at Leading Retailers
(% Respondents Recognizing Retailer’s Store Brand)
Source: IRI Private Label Survey, April 2011
*Consists of other retailers included in the survey (i.e., Supervalu, Delhaize, Publix, Walgreens, CVS, Dollar General, Meijer, Ahold, and Sam’s Club brands)c
56
60
80
90
78
47
Aldi
Kroger
Costco
All Other*
Target
Walmart
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 14
Successful Private Label Programs Helped Retailers Grow Share of Wallet
or Buyers; Less Successful PL Programs Did Not Boost Retailer Loyalty
Retailers Private Label F&B Share and Share of Wallet
Changes – 52 WE Q2 2011 vs. 2008
Retailers Private Label F&B Share and Share of Buyers
Changes – 52 WE Q2 2011 vs. 2008
Source IRI Archived Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels) .
Notes: Private Label $ Share = Private Label Edible / Total Edible; Share of Wallet = Retailer Share of Wallet out of All Outlets;
Share of Buyers = Retailer Buyers / Buyers in CRMA (Retailer Share of Market – Product Buyers)
Ch
an
ge i
n r
eta
iler
SO
W (
pp
t)
Change in PL $ share (ppt)
SVU-Albertsons
SVU Cub
Harris Teeter
A&P (w/ Pathmark)
Walmart
Target
Kroger
Aldi
Costco
Correlation = -0.07
DrugMassFoodDollarClub
A&P (w/ Pathmark)
Walmart
TargetKroger
AldiCostco
Change in PL $ share*(ppt)
Ch
an
ge i
n r
eta
iler
sh
are
of
bu
yers
* (p
pt)
Wegmans
SVU-Albertsons
SVU Cub
Harris Teeter
DrugMassFoodDollarClub
Correlation = -0.12
-1
0
1
-5 -4 -3 -2 -1 0 1 2 3 4 5
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
-5 -4 -3 -2 -1 0 1 2 3 4 5
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 15
Shoppers Prefer Both Private Label Brands
and Name Brands in Places Where They Shop
% Who Agree or Strongly Agree With Statements
I Prefer to Shop at Stores Where Store Brands EXIST in Most
Food & Beverage Categories
I Prefer to Shop at Stores Where Availability of Store Brands DOMINATES
Over Availability of Name Brands
Source: IRI April 2011 Private Label Survey
“”
“”
strongly agree16% 30%
agree
like PL brands as an option, but dislike when PL DOMINATES brand names
46%
strongly agree5% 12%
agree
like PL brands as an option, but dislike when PL DOMINATES brand names
17%
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 16
Private Label Growth During Past Recession Was Driven
by Younger and Middle- to High-Income Households
52 WE Q2 2011 vs. 2008 Private Label Dollar Sales Gain Contribution
Source: IRI Archived Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
*Other includes Transition Time, True Blues, Active Elders, Family Focused, Leisure Buffs
17.1
14.5
9.07.8
6.2 6.1 5.3 5.1 4.9 4.7 4.5 4.5 4.1
6.4
40% of Total Gains
Share of Total PL $ Sales
Income
Age
Other
Flush
Families
Other
*
Mature
Wealth
Middling
Singles +
Mixed
Middlers
Modest
Means
Mature
Rustics
Aging
Upscale
Our TurnFlying
Solo/Mixed
Singles
Fortunes
&
Families
Golden
Years
Cash &
Careers
Beginnings
+ Taking
Hold
Jumbo
Families
PersonicX
Segments
Children Children City Rural Children / City
Children City
30s-40s 20s 30s 46+ 40s-50s 30s 40s-50s 45-65 46+ 40s-50s 46-65 40s 46-65
$60K-
120K<$75K > $60K >$60K >$120K <$35K $35K-75K
$60K-
120K
$25K-
35K
$60K-
120K<$35K
$25K-
75K> $120K
13% 5% 4% 9% 7% 2% 5% 4% 4% 8% 6% 4% 4% 25%
MORE THAN FAIR SHARE CONTRIBUTION
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 17
African American and High-Income Households Contributed
More Than Their Fair Share to Private Label Dollar Share Growth
52 Weeks Q2 2011 vs. 2008
Private Label Dollar Sales Gain Contribution
52 Weeks Q2 2011 vs. 2008
Private Label Dollar Sales Gain Contribution
Source: IRI Liquid Data Panel; All Outlets.
78.1
12.39.6
HispanicAfrican
American
Caucasian
Share of Total
PL $ Sales 79% 10% 11%
45.3
31.5
23.2
$70K and up $35K to 69.9K $34.9K <
37% 33% 30%
% Contribution to PL growth % Contribution to PL growth
MORE THAN FAIR SHARE CONTRIBUTION
Share of Total
PL $ Sales
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 18
Shoppers’ Positive Perceptions of Private Label Products Increased
During the Great Recession and Contributed to PL Sales Gains
% Difference Between Heavy and Light Users That
Agree or Strongly Agree With Statement
Heavy Users Share of Total
Private Label F&B Sales
Source: IRI Panel – All Outlets; IRI Private Label Survey, April 2011
19.0
32.2
20.3
% of PL F&B Users % Contribution to PL
F&B Sales
2008
Q2 2011
33.8
10%
Store brands are easy to
find on the shelf14%
Store brands are often made
by brand manufacturers24%
Store brands are as
safe as name brands
38%
Grocery store brands are same
or better than name brands
Store brands are just as
innovative as brand name
34%
48%
Name brands are worth
the extra price-41%
I always know which
products are store brands
Notes: Sample size: Heavy shoppers (PL is 30% or more of total spend)= 412, Light shoppers (PL is 10% or less of total spend)= 427. Includes responses with 4 (Agree) and 5 (Strongly Agree)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 19
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 20
2020 Trends and Implications
• Post COVID-19, Private Label continues its
momentum and has consistently outpaced national
brand growth in both edible and nonedible categories
over the past three years.
• Categories that already have strong Private Label
development continue to gain the most.
• Private Label growth is retailer specific – Walmart,
Costco and Sam’s Club have driven a vast majority of
edible PL growth and Walmart and Costco have driven
all the growth in nonedible.
• Sales of Private Label will reach $15B-$20B dollars in
sales in 2020 vs. the $5B sales gains experienced in
2019-2018; share to increase 0.6 ppts.
• Private Label risk to brands is high when differentiation
and loyalty are low, and the financial incentive for both
shoppers and retailers is strong.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 21
2017 2018 2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Private Label Has Consistently Outpaced National Brand Growth in
Both Edible and Nonedible Categories Over the Past Three Years
Quarterly Brand Dollar Performance % Chg vs YAG // Total Store // MULO
0.6
3.8
5.26.5 7.0
5.14.1
2.5 2.4 2.63.4
4.7
-1.1
1.5 1.4 1.0
3.0
0.0
1.4 1.30.6
3.1 2.72.2
2.5
4.3
5.6
7.2 7.16.1 5.9 5.7 6.1
6.75.8
4.6
0.5
0.0
0.6 0.8 0.5 0.1 0.4
0.0
0.61.1
0.4 0.1
0.0
Private Label
Branded
Source: IRI Total Store POS
Edible
Nonedible
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 22
Both Edible and Nonedible Private Label Brands Have Taken Share Since 2017,
With the Highest Point Gain Seen in Nonedible Categories (+1.6pts)
Edible Nonedible
$6.2B Incremental PL Edible Sales
$3.1B from PL share gains
$3.1B from category sales increases
$4.8B Incremental PL Nonedible Sales
$3.6B from PL share gains
$1.2B from category sales increases
2017 2018 2019
17.3
18.1
18.9
+1.6
18.0
2017 2018 2019
18.5
18.7
+0.7
PL Dollars ($B)
$77.0 $80.5 $83.2
PL Dollars ($B)
$38.7 $41.1 $43.5
Source: IRI Total Store POS
Private Label Dollar Share % // CY 2019 v 2017 // MULO
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23
Since 2017, Private Label Edible Grew Volume Sales While Holding Prices
Steady; Nonedible Private Label Grew Price / Volume But Also Increased Volume
Source: IRI Total Store POS / Note: Change in price per vol = change in price per vol for each category weighted by category PL/Branded $ sales
Drivers of Growth // CY 2019 vs 2017 // MULO
Δ Dollar Sales(2019 vs 2017)
Δ Price per vol
Δ Vol Sales
Δ Dollar Sales(2019 vs 2017)
Δ Price per vol
Δ Vol Sales
National
Brands
Private
Label
+3.6% +8.1%
+4.5% -0.5%
-0.9% +8.6%
+7.8% +5.2%
-6.5% +6.7%
National
Brands
Private
Label
+0.8% 12.3%
Edible Nonedible
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 24
Refrigerated and Frozen Categories Led Private Label Edible
Growth 2017-2019, Along with Bottled Water and Nuts / Seeds
Edible Categories Driving Private Label Dollars // CY 2019 v 2017 // MULO
Edible Category Contribution To Edible Growth Mix & Share
Ranked by PL absolute
dollar change 2019 vs 2017% of absolute dollar change vs 2017
% Chg vs
2017
% of Total
PL $
PL $ Share Pt
Chg vs 2017
1 MEAT - RFG 27.6% 4.3 8.0
2 BOTTLED WATER 18.9% 4.9 1.2
3 SEAFOOD - FZ 27.9% 3.5 8.2
4 NATURAL CHEESE 11.5% 7.4 3.4
5 SNACK NUTS/SEEDS 25.1% 2.0 6.6
6 FRESH EGGS 8.8% 4.0 1.6
7 ENTREES - RFG 51.2% 0.9 4.5
8 BREAKFAST MEATS 18.1% 1.7 2.1
9 WHIPPED TOPPINGS - RFG 42.3% 0.7 7.3
10 COFFEE 12.2% 1.9 1.6
11 SIDE DISHES - RFG 25.9% 1.0 2.6
12 SPICES/SEASONINGS 16.9% 1.2 2.2
13 COOKIES 11.4% 1.7 0.8
14 CREAMS/CREAMERS 17.3% 1.1 0.8
15 BAKING NUTS 31.1% 0.7 13.8
16 PLAIN VEGETABLES - FZ 11.4% 1.5 1.6
17 PROCESSED POULTRY - FZ/RFG 28.8% 0.6 3.2
18 SALTY SNACKS 8.8% 1.6 0.0
19 LUNCHEON MEATS 10.9% 1.3 1.7
20 BUTTER/BUTTER BLENDS 7.3% 1.7 0.8
ALL OTHER 1.8% 56.3 -0.2
TOTAL EDIBLE PRIVATE LABEL 8.1% 100% 0.6
2%
3%
10%
4%
2%
3%
13%
10%
10%
5%
4%
4%
3%
2%
2%
2%
2%
2%
2%
13%
100%
2%
TOP 5 SELLERS DURING THE LAST RECESSION (YEAR-ENDED 2010)
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 25
Pet Supplies as Well as Paper Products Led Nonedible
Private Label Performance Over the Past Few Years
Nonedible Categories Driving Private Label Dollars // CY 2019 v 2017 // MULO
Source: IRI Total Store POS
Nonedible Category Contribution To Nonedible Growth Mix & Share
Ranked by PL absolute
dollar change 2019 vs 2017% of absolute dollar change vs 2017
% Chg vs
2017
% of Total
PL $
PL $ Share Pt
Chg vs 2017
1 PET SUPPLIES 43.7% 3.8 9.7
2 TOILET TISSUE 24.7% 5.3 3.8
3 PAPER TOWELS 17.0% 4.2 3.1
4 CUPS & PLATES 11.5% 5.8 3.5
5 KITCHEN STORAGE 32.7% 2.0 4.9
6 SOCKS 25.5% 1.9 6.1
7 FIRST AID ACCESSORIES 19.9% 1.8 4.7
8 CANDLES 29.3% 1.2 5.6
9 PET TREATS 40.6% 0.9 2.2
10 CLEANING TOOLS 31.8% 1.0 4.1
11 GASTROINTESTINAL 8.5% 3.2 2.5
12 DIAPERS 11.8% 2.3 1.4
13 VITAMINS 5.3% 4.8 -0.4
14 TIGHTS 18.2% 1.3 3.9
15 MOIST TOWELETTES 27.0% 0.9 5.3
16 FOOD & TRASH BAGS 4.2% 4.6 1.1
17 HH CLEANER CLOTHS 40.5% 0.6 5.2
18 AIR FRESHENERS 20.8% 0.9 1.5
19 NASAL PRODUCTS 20.6% 0.9 3.0
20 SLEEPING REMEDIES 25.0% 0.8 -1.5
ALL OTHER 7.5% 51.7 0.8
TTL NONEDIBLE PRIVATE LABEL 12.3% 100% 1.6
2%
2%
2%
3%
1%
3%
2%
4%
10%
1%
11%
5%
1%
6%
100%
2%
2%
33%
2%
2%
2%
3%
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 26
Private Label Secured the Largest Share Gains in the Edible
Categories That Already Had High Private Label Development
Top-20 Edible Category Share Gain // CY 2019 v 2017 // MULO
5
10
15
20
25
30
35
40
45
50
55
60
65
70
1.5 3.52.0 2.5-0.5 3.00.0 1.0 4.0 7.50.5 8.04.5 7.0 14.0
ENTREES - RFG
WHIPPED TOPPINGS - RFG
SEAFOOD - FZ
PLAIN VEGETABLES - FZ
NATURAL CHEESE
PROCESSED POULTRY - FZ/RFG
GROUND COFFEESALTY SNACKS
SIDE DISHES - RFG
LUNCHEON MEATS
COOKIES
CREAMS/CREAMERS
MEAT - RFG
BAKING NUTS
PL Dol Shr Pt Chg (2019 vs 2017)
PL
Do
l S
hr
% (
2019)
BUTTER/BUTTER BLENDS
BOTTLED WATER
SNACK NUTS/SEEDS/CORN NUTS
FRESH EGGS
BREAKFAST MEATS
SPICES/SEASONINGS
PL Edible
Avg (+0.7)
PL Edible
Avg (18.7%)
$1,000
Private Label
Dollar Size
($MM)
PL
Deve
lop
ing
PL
Stro
ng
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27
Similar to Edible, Private Label is Taking Share in Nonedible
Categories Where it is Already Established and Growing
Top-20 Nonedible Category Share Gain // CY 2019 v 2017 // MULO
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
4.5 6.05.0 5.53.5-1.5 -1.0 -0.5 0.0 1.5 2.0 2.5 3.0 4.0 10.0
KITCHEN STORAGE
PAPER TOWELS
CUPS & PLATES
FIRST AID ACCESSORIES
GASTROINTESTINAL
TOILET TISSUE
AIR FRESHENERS
FOOD & TRASH BAGS
CLEANING TOOLS
DIAPERS
VITAMINS
MOIST TOWELETTES
HH CLEANER CLOTHS
PET TREATS
PET SUPPLIES
SLEEPING REMEDIES
PL
Do
l S
hr
% (
2019)
CANDLES SOCKS
TIGHTS
PL Dol Shr Pt Chg (2019 vs 2017)
NASAL PRODUCTS
PL Nonedible
Avg (+1.6)
PL Nonedible
Avg (18.9%)
PL
Deve
lop
ing
PL
Stro
ng
Source: IRI Total Store POS
$500
Private Label
Dollar Size
($MM)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 28
Retailer Contribution to Edible Growth Mix & Share
Ranked by PL absolute
dollar change 2019 vs 2017% of absolute dollar change vs 2017
Change
Index*
% of Total
PL $
PL $ Share Pt
Chg vs 2017
1 Walmart 206 29.4
2 Costco 131 9.6
3 Sams Club 296 3.3
4 Kroger 67 6.2
5 Aldi 19 11.2
6 Trader Joes 64 2.9
7 Dollar General 217 0.9
8 Lidl 833 0.2
9 Food Lion 120 0.8
10 Safeway 59 1.6
11 Frys 153 0.6
12 Hannaford 183 0.5
13 Pick N Save 379 0.2
14 Ralphs 152 0.5
15 Meijer 48 1.4
16 King Soopers 112 0.6
17 Fred Meyer 88 0.8
18 Albertsons 106 0.6
19 Weis Markets 236 0.2
20 DeCA Commissary 747 0.1
All Other NA 28.3
ALL OUTLETS 100%
Walmart and Club Retailers Comprised the Top-3 Growing
Private Label Growth Contributors Within Edible
Top Retailers Driving Edible PL Dollars // CY 2019 v 2017 // All Outlets // National Consumer Panel
4%
10%
1%
1%
13%
2%
2%
1%
1%
3%
100%
1%
1%
61%
1%
1%
1%
1%
1%
1%
2%
1%
Top-5 = *90% of
PL Edible Growth
Source: IRI National Consumer Panel / *Index = contribution to sales change / contribution to total sales
2.1
0.7
2.7
-0.2
-1.3
0.2
-1.2
-4.7
-1.0
0.6
-0.1
1.2
1.6
0.9
0.0
-0.2
-0.9
0.6
1.5
1.4
-0.4
0.5
TOP RETAILERS DRIVING PRIVATE LABEL DOLLAR SALES GAINS DURING THE LAST
RECESSION (YEAR-ENDED 2010)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 29
In Nonedible, Significant Growth in Walmart Private Label
Was Offset by Declines in Walgreens’ and Sam’s Programs
Top Retailers Driving Nonedible PL Dollars // CY 2019 v 2017 // All Outlets // National Consumer Panel
Source: IRI National Consumer Panel
GREATEST PL RECOGNITION AMONG SHOPPERS DURING THE LAST
RECESSION (YEAR-ENDED 2010)
Retailer Contribution to Nonedible Growth Mix & Share
Ranked by PL absolute
dollar change 2019 vs 2017% of absolute dollar change vs 2017
Change
Index*
% of Total
PL $
PL $ Share Pt
Chg vs 2017
1 Walmart 188 69.0 3.3
2 Costco 255 5.1 1.0
3 Dollar General 641 0.3 6.8
4 Target -- 1.3 0.0
5 Kroger -- 4.5 -1.4
6 Aldi -- 3.0 3.7
7 Meijer (196) 0.6 -0.8
8 Walgreens (409) 3.3 -4.6
9 Sam’s Club (1,142) 1.6 -1.8
All Other (93) 11.4 -0.5
ALL OUTLETS 100% 0.5
130%
1%
1%
14%
1%
18%
11%
0%
2%
13%
100%
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 30
Edible Nonedible
CU
RR
EN
T %
PT
CH
G V
S. Y
AG
Private Label Continues to Grow Share of Both Edible and Nonedible in 2020
YTD 2020 Private Label Dollar & Unit Share// MULO
18.9
22.3
19.418.9 18.8
22.422.8
18.7
22.522.5 22.2
18.9
CU
RR
EN
T %
PT
CH
G V
S. Y
AG
Dol Share Unit Share
0.3 0.30.3 0.2
0.40.3
0.60.5
0.4
0.6
0.8
0.6
25.925.0
20.119.619.2
24.224.7
19.4 19.1
24.0
19.1
24.5
0.90.6 0.7
1.1
1.5
0.4
1.2
0.7 0.8
1.6
2.2
0.7
Source: IRI Total Store POS
IRI ForecastLarge-format Private Label sales growth will reach $15B-$20 in 2020. Due in part to increased consumption, PL will enjoy
an accelerated increase in share of up to 0.6 points. Private Label for 52 WE 5.17.2020 is up ~$12B vs. comparable period YAG.
4 WE 1.26.20
4 WE 2.23.20
4 WE3.22.20
4 WE 4.19.20
4 WE 5.17.20
YTD2020
4 WE 1.26.20
4 WE 2.23.20
4 WE3.22.20
4 WE 4.19.20
4 WE 5.17.20
YTD2020
4 WE 1.26.20
4 WE 2.23.20
4 WE3.22.20
4 WE 4.19.20
4 WE 5.17.20
YTD2020
4 WE 1.26.20
4 WE 2.23.20
4 WE3.22.20
4 WE 4.19.20
4 WE 5.17.20
YTD2020
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 31
Private Label Risk is High When Differentiation and Loyalty Are Low,
and the Financial Incentive for Both Shoppers and Retailers is Strong
Framework to Assess Threat of Private Label for Branded Manufacturers
Source: IRI Growth Consulting.
Comparability
Side-by-side comparisons are
simple; little perceived difference in attributes or claims
Price difference is evident, as private
label options are directly comparable
in size and count
Pricing
Price gap is large between private label and national brands, providing consumers additional incentive
Smaller craft brands are popular, allowing private label to mimic their cache without a
large premium
Distribution
Fewer national brands and
products available per store to meet diverse shopper
needs
Brands are highly regionalized, limiting
widespread recognition and loyalty
for national brands
Loyalty
Retailers drive trust & brand recognition in their private label (e.g. Whole Foods
365, Kirkland)
Demand is highly fragmented with
lower levels of brand loyalty, showing
a willingness to cross-shop
Margin Appeal
Category is traditionally lower
margin for the retailer, driving them to push for stronger profits
Private label moves beyond value
pricing to higher margin Mainstream and Premium tiers
FACTORS DRIVING HIGH PRIVATE LABEL RISK IN CATEGORIES
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 32
Insights and Strategic
Guidance for Better Decisions
IRI’s Online Resources Include Real-Time
Updates and Weekly Reports Which Track
the Impact of the Virus on CPG and Retail
The IRI COVID-19 lmpact
Includes COVID-19 impact analyses, dashboards
and the latest thought leadership on supply chain,
consumer behavior, channel shifts for the U.S.
AND international markets
IRI CPG Economic Indicators Including the
IRI CPG Demand Index™, IRI CPG Supply
Index™ and IRI CPG Inflation Tracker™
Accessible through the insights portal
to track the daily impact of COVID-19.
This includes top selling and out-of-stock
categories across the country and
consumer sentiment on social media
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 33
The Latest COVID-19 Reports and Insights from IRI (click to see full report)
IRI COVID-19 IMPACT ASSESSMENT REPORTSLESSONS FROM THE GREAT RECESSION
THE CHANGING SHAPE OF THE CPG DEMAND CURVE
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 34
IRI CPG Demand Index™
The IRI CPG Demand Index™ provides a
standard metric for tracking changes in
spending on consumer packaged goods. It
measures weekly changes in consumer
purchases, by dollar sales, against the year-
ago period across departments including fixed
and random weight products, grocery aisles
and retail formats. The IRI CPG Demand
Index™ is available for eight U.S. regions and
all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 35
The IRI CPG Inflation Tracker™ provides the
well-known price per unit metric for tracking
changes in pricing of consumer packaged
goods. It provides weekly changes in
consumer prices, price per unit against the
year-ago period across departments including
fixed and random weight products, grocery
aisles and retail formats. The IRI CPG
Inflation Tracker™ is available for eight U.S.
regions and all U.S. states.
CLICK HERE FOR MORE!
IRI CPG Inflation Tracker™
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 36
The IRI CPG Supply Index™ provides a
standard metric for tracking changes in
product availability (i.e. in-stock rates) in
stores for consumer packaged goods. It
measures weekly changes in product
availability against the baseline across
departments and retail formats. The IRI
CPG Supply Index™ is available for eight
U.S. regions and all U.S. states.
CLICK HERE FOR MORE!
IRI CPG Supply Index™
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 37© 2020 Information Resources Inc. (IRI).
Confidential and Proprietary. 37
CONTACT US FOR MORE
INFORMATION
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