As consumer reliance on private label continues to grow, grocers may want to look at what each generation frequently buys in order to better meet their needs.
Overall, household staples make up the top categories where consumers seek out private label options, with more than half the U.S. buying private brand canned goods, beverages, dairy, paper products and bread and bakery, according to research from consulting firm PDG Insights.
More consumers are also choosing their retailer based on the quality and variety of their private label offerings, Diana Sheehan, principal and CEO of PDG Insights, who authored a recent blog post about the findings, said in an interview.
But penetration of top private label categories varies dramatically with age, according to Sheehan.
PDG’s findings show that older shoppers are buying more private label goods than younger consumers, with consumers aged 35 to 54 and aged 55 and older purchasing private label items across an average of 8.9 and 8.4 categories, respectively. Consumers aged 18 to 35 purchase private label from an average of 7.3 categories.
Generation X is embracing private label while millennials are just beginning to seek out grocers’ brand items consistently, Sheehan said, noting that the stigma around private label is dissipating as the quality of the goods continues to improve.
Beverages are the top private label category sought out by shoppers under 34, with 64% of that customer base seeking out those items. Other top categories from the age group include baking ingredients, breakfast cereals, dairy products and frozen foods, which collectively saw penetration below 55%.
The 35 to 54 age group and the 55 and older groups, which are primarily made up of consumers shopping for households, are frequently buying private label breakfast cereal, frozen foods, snack foods and cleaning supplies.
Sheehan added that these findings are most likely due to the fact that these age groups consists of larger households with children — and households with children buy more private label.
Private label perceptions by age
As purchasing frequency for private label increases with age, so does the perception that private label provides good value, Sheehan found. Eighty-eight percent of shoppers 55 and older, for example, agree with the statement, “Private label provides a good value,” compared to 75% of consumers in the 18 to 34 age group, PDG’s research found.
“For retailers and manufacturers, understanding the demographics of consumers expecting innovation can help them build strategies around product categories and segments where they should prioritize their new product pipeline,” Sheean wrote in a second blog post.