Private Label Food Manufacturers Up the Ante in US Markets

Private label food manufacturers are setting the product trends, according to Mintel’s Global New Products Database (GNPD), which tracks new product launches.

The newest private label foods woo shoppers with premium ingredients, portability and health benefits, providing more than just cheap alternatives to national brands, it says.

To date, Mintel GNPD has recorded 1,800 new US private label foods on retail store shelves: 27% of all food products introduced this year.

In 2005, private label foods accounted for just 13% of new food product launches.

"Not only have private label introductions increased, but product innovation is reaching unprecedented highs," said Krista Faron, senior analyst at Mintel.

"Retailers no longer only launch 'me-too' products to compete against major national brands. Instead, private label lines are hotbeds of creativity, driving markets and establishing themselves as trend leaders."

As over half of Americans try to spend less at restaurants, Mintel reports retailers are creating premium private label ready meals that boast restaurant quality and fresh ingredients.

Supervalu's Culinary Circle, for example, features an upmarket Pork Carnitas Enchilada Casserole, while Wal-Mart claims fresh-baked taste in minutes with Sam's Choice Thin Crust Pepperoni and Canadian Bacon Pizza.

Portable, high-quality lunches are another hot area of private label development, adds Faron. People want to save money by lunching at the office, and new private label foods like Safeway's Rice Noodle Soup Bowl (retailing for $1.55) make desk-dining easy and enjoyable, she said.

Convenience remains a driver for private label foods, but Mintel reports health and nutrition are increasingly influencing product development. Lucerne Foods, for instance, delivers convenience, nutrition and private label pricing with its Eating Right brand. The brand spans the store, including children’s Whole Wheat Mini Ravioli with fibre and protein, plant sterol-fortified Apple Cinnamon Granola and Light Ice Cream Cups containing probiotics.

"Private label manufacturers realise value means more than low price to consumers, so they're wisely creating new products that deliver on some of today's most exciting food trends,” said Faron.

According to Mintel, the US private label market grew by 9.3% in 2008 versus 4.5% growth in branded food sales. Mintel forecasts private label sales will grow by 8.1% by the end of 2009.