The connection between rising prices and the growing importance of private label is a natural one, but taking full advantage of the opportunity requires a deeper look at which items are moving and how grocers can take advantage of this momentum.
Not all private label categories are equal, and companies that focus on driving sales in the biggest areas of opportunity will likewise reap the biggest benefit.
One of the biggest surges in private label interest comes from store-branded baking mixes, a category that’s seen a 40% jump in unit sales during the first six months of 2022 compared to 2021, according to data from Catalina. The firm noted that a deeper understanding of which particular items in this category are moving can help capture its momentum.
“Retailers have several complementary strategies and tactics ranging from in-store, digital, e-com and more that they can deploy to create excitement and increase sales using baking or even ‘easy baking’ as the theme/focal point,” said Phyllis Johnson, Group Director, Brand Development at Catalina.
MARKETING BAKING MIXES
Johnson suggested banner-wide baking marketing events as a good way to put this information into action. In-store, cross merchandising, baking endcaps and displays and in-store signage can all play a role, while the digital component can utilize messages and incentives over apps and social media to draw in shoppers.
“With retailers already planning for Q4, and the holidays being big baking occasions, the timing is perfect for putting baking-centric programs together,” Johnson said.
Growth in baking mixes has come at the expense of scratch baking, which spiked during the pandemic and lockdowns but declined as consumers returned to pre-pandemic activities, according to Catalina data. Scratch baking will continue to decline, but newfound hobbies like bread baking will keep the category inflated compared to pre-pandemic levels.
ADDITIONAL HOT CATEGORIES
The opportunities created by this dynamic aren’t limited to store brand baking mixes. Time-starved consumers still want the taste of an entire homemade meal even if they lack the time, and multiple categories can serve this need.
“Refrigerated Dough/Biscuits have seen a 38% increase, suggesting that consumers are looking for meals to have a ‘from scratch’ feel without putting in the ‘from scratch’ work,” said Kim Kuhn, Executive Director, Brand Analytics at Catalina. “With consumers also looking for healthy and easy meal additions, tofu is up 82%, with fresh fruit up 43%. Meanwhile, frozen cookie & brownie dough and frozen cakes are up 115% and 73% respectively, as consumers round out their easy meals with easy desserts.”
Interest in these items makes this a good time for grocers to offer any private label versions to their shoppers, as these brands can offer quality, variety and price to shoppers during inflationary times, according to Johnson.
However, they need to act swiftly and utilize personalized conversations to remind shoppers of private labels that fit their needs while interest is at its height.
“It’s important for private brands to prepare for the market dynamics that will be in play when name brands gain back supply chain strength, and begin to aggressively react to private label gains,” said Sean Murphy, EVP, Chief Data & Analytics Officer at Catalina. “I believe many brands have held back incentives because of supply issues over the past couple years. As those get fixed, national brands will likely respond in market with promos that expand and may change consumer choices.”