KUALA LUMPUR: NielsenIQ (NIQ), a consumer intelligence company, in its global report has revealed challenges and opportunities for private label and branded product growth, with 53 per cent of consumers increasingly purchasing more private label products.
Simultaneously, the top 10 global brands also experienced a resurgence in global sales momentum in 2024, suggesting that retailers and consumer packaged goods (CPG) manufacturers will continue to compete for consumer attention on the shelves of large and small grocery stores and retailers alike.
In a statement, NIQ Chief Communications Officer and Head of Global Marketing COE, Marta Cyhan-Bowles emphasised that the report underscores the importance of collaboration between manufacturers and retailers to drive the next wave of CPG growth and effectively engage with consumers’ shifting preferences.
Key trends driving growth of both private label and branded products include a growing positive perception of private label products, with 68 per cent of respondents viewing them as good alternatives to name brands, and 69 per cent acknowledging their value.
In addition, 60 per cent of consumers would buy more private label products if a larger variety were available, and more than half of consumers (54 per cent), especially Millennials (61 per cent) and Gen Z (58 per cent), are willing to upgrade to premium-brand products.
The positive consumer sentiment is supported by impressive worldwide sales data, with NIQ Retail Measurement Services reporting a 4.8 per cent increase in sales for the top 10 global brands, slightly surpassing the 4.3 per cent annual sales growth of private labels.
To harmonise success between private label and branded products, retailers and manufacturers are encouraged to consider strategies such as leveraging the brand halo effect for private labels, where proximity to premium brands enhances their appeal, and using price anchoring to encourage consumers to try new or comparable products.
Meanwhile, for branded products, increasing traffic through retailer endorsements and market expansion in categories like ready-to-drink coffee and snack bars can create opportunities for all brands.
— BERNAMA
