part 4 recessionary lessons to apply to private label … · 2020-05-28 · source: iri archived...

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

https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Recession-Series-Part-I-4-29-2020.pdf

https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Recession-Series-Part-2-Maintaining-Pricing-Discipline-5-7-2020.pdf

https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Recession-Series-Part-3-Brand-Performance-5-21-2020.pdf

© 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™

https://www.iriworldwide.com/en-US/Insights/Publications/coronavirus-impact-to-CPG-and-retail

https://advantage.iriworldwide.com/Engineering/covid19/

https://advantage.iriworldwide.com/Engineering/covid19/index.html



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.


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).


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


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


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


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


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


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


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


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)


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.


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)



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


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


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%


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%



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


Share of Total

PL $ Sales


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 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.


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


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


Private Label Dollar Share % // CY 2019 v 2017 // MULO


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


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)



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


Nonedible Category Contribution To Nonedible Growth Mix & Share



% 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%


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



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


$500

Private Label

Dollar Size

($MM)


Retailer Contribution to Edible Growth Mix & Share



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)


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



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%


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


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


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


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

https://www.iriworldwide.com/en-US/Insights/Publications/coronavirus-impact-to-CPG-and-retail

https://bit.ly/IRI-COVID-19-Reports



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

https://www.iriworldwide.com/IRI/media/Library/COVID-19-Impact-Assessment-Millennials-Meat-5-15-20.pdf

https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Recession-Series-Part-3-Brand-Performance-5-21-2020.pdf

https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Recession-Series-Part-2-Maintaining-Pricing-Discipline-5-7-2020.pdf

https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Recession-Series-Part-I-4-29-2020.pdf

https://www.iriworldwide.com/IRI/media/Library/IRI-COVID-19-Impact-Assessment-4-24-2020.pdf

https://www.iriworldwide.com/IRI/media/Library/COVID-19_IRI.pdf

https://www.iriworldwide.com/IRI/media/Library/COVID-19-Thought-Leadership.pdf

https://www.iriworldwide.com/IRI/media/Library/COVID-19-Thought-Leadership-3-25-2020.pdf





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!



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.


IRI CPG Inflation Tracker™



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.


IRI CPG Supply Index™


© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 37© 2020 Information Resources Inc. (IRI).

Confidential and Proprietary. 37

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INFORMATION

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part 4 recessionary lessons to apply to private label … · 2020-05-28 · source: iri archived...

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