Nielsen: Private Label Deemed Equal to Name Brands

NEW YORK Rising commodity prices and consumer desire to get the best price/value products are driving private labels’ growth, according to a new study released by the Nielsen Co.

Nearly three-fourths (72 percent) of respondents surveyed viewed private label brands as equivalent to name brands, while 62 percent said store brands were just as good as name brands.

The findings are based on online surveys drawn from 54,000 U.S. households participating in the Nielsen Homescan platform, which tracks shopper behavior in the packaged-goods sector. The results are taken from data obtained June-July of this year.

“While private label products continue to follow the success of consumer packaged-goods (CPG) manufacturers’ name brand introductions, more CPG retailers are making private label a priority with messages on quality as strong as messages on value,” Todd Hale, svp, consumer and shopper insights at Nielsen (the parent of company of Adweek), said in a statement.

The study also found that:

• Private label accounted for $81 billion in U.S. sales this year, up 10.2 percent from the previous year.
• Sixty-three percent of consumers believe private labels’ brand quality is just as good as name brand quality, while 33 percent of respondents said they consider store brands to be of higher quality than name brands.
• Sixteen percent, however, said store brands aren’t comparable in quality to name brands, and the packaging is “cheap-looking”
• Price and value are the primary drivers for growth, with 74 percent of consumers expressing price as the key purchase factor. Two-thirds (67 percent) of those surveyed said store brands provide “extremely good value” for their prices, while 35 percent are willing to pay the same or more for a store brand if they like it. Twenty-four percent of Americans, on the other hand, said they’d pay more for name brands if worth the extra price.