The days of store brands being tradeoffs from national brands are gone. That change brings new opportunities for packaging partners on both ends of the spectrum.
Higher-income households are embracing private labels, unit sales of store brands are growing as those of national brands decline and a majority of Gen Z consumers believe private label products are just as good as branded items.
“Being price savvy has become more of a badge of honor,” said Lisa Peteet, creative director and co-founder of Atlas Branding, a branding and packaging agency. Younger consumers have “embraced buying private label, but they still value design.”
That confluence of factors is driving retailers to establish distinct identities for their store brands, with Aldi, Amazon Grocery and Walmart all redesigning private label packaging over the last year. They’re treating private labels more like individual brands than a singular department within the company, said Eran Mizrahi, founder and CEO of Source86, which sources bulk ingredients and manufactures private label products.
As private label booms, it’s opening doors for packaging suppliers to participate in the growing and evolving segment. It’s pushing national brands and their suppliers to develop packaging that proves the product is worth a premium price.
“Packaging is where a retailer brand shows shoppers what it stands for,” said Peggy Davies, president of the Private Label Manufacturers Association. “On the shelf, it is the product’s most immediate opportunity to make its case.”
Private label builds an identity
Mizrahi credits one retailer in particular for changing the perception around store brands.
“Trader Joe’s did a really good job at educating the market that you can build a whole brand around value,” he said. At Trader Joe’s, 82% of unit sales come from store brands — the highest of any retailer, according to data from market research firm Numerator.
One of the biggest recent changes in private label packaging is placement and prominence of the logo, Peteet said. As private labels build identities, retailers “want their logos really big on their packaging now,” Peteet said, while the product imagery takes less real estate on the package. “That is a complete flip right now in the industry.”
Private labels can stand out on the store shelf through bold colors, legible fonts, and “punchy and clear” wording, said Michelle Leong, a partner at consultancy Simon-Kucher focused on consumer goods and retail. Designs also need to render well online for e-commerce, with consistency across on-shelf and on-screen packaging, Leong said. READ MORE
By Shefali Kapadia
Source: packagindive.com
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