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Private Label: The Journey to Growth Along Roads Less Traveled

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Executive Summary: Charting a New Path to Growth

The consumer packaged goods (CPG) industry is struggling to jump-start growth. Economic turmoil put a huge damper on volume momentum, but improving conditions have done little to spur momentum.

  • CPG retailers and manufacturers are looking for new ways to drive excitement and engagement.
  • National brands and name brands each have a pivotal role to play.
  • Striking the right balance is the key to successfully providing a solid value proposition and a positive shopping experience.

The next wave of private label growth will be fed by diversification and premiumization. Retailers must rewire their private label strategies and begin to compete as true brands rather than “me too” players.

  • Relying on distribution gains for growth is no longer a sustainable option.
  • Slow private label losses across battleground categories with new competitive strategies.
  • Jump on the growth bandwagon across opportunity categories, where private label is showing favorable growth trends.

Private label structure will be the same, but different. Balancing assortment is critical, so it must be handled with a very deliberate and targeted approach.

  • Opening price point products remain an essential option for customers across some geographies, channels, banners and trip missions.
  • Mainstream innovation must evolve beyond traditional follower status.
  • Premium innovation provides opportunity to offer exclusivity and increased share/margin.

Framework to win: Premiumization and differentiation set the stage for private label growth.

  • Upstream innovation will breathe new life into mature private label categories.
  • Outside-the-box innovation will allow retailers to ride the wave where private label growth is escalating.
  • Effective price pack architecture is critical, particularly where private label is mature and differentiation is challenging.

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