ORLANDO, Fla. — Maintaining wellness and preventing future health concerns have become a significant driver for consumers, Kristin Gorski, director new business development, Nielsen, told attendees at the recent Store Brand Health & Beauty Care EPPS, hosted by ECRM. "Health care is doing really well," she said, and represents some of the fastest growing and bestselling categories across the front end through which to target growth. "Consumers are trying to stay healthy and out of their doctor's [offices]," she said. "They' don't want to pay to go to the doctor; they're really trying to reduce healthcare costs."
That news bodes well for own brand manufacturers, many of whom have an opportunity to augment a strong value proposition with traditional product differentiators like format and taste in an attempt to recover an eroding market share. While the recession economy of years past has been good for private label manufacturers as a whole, the more recent recovering economy has seen some erosion of private label market share, Gorski noted.
In the past seven or more years, private brand dollars grew 1.3 share points from 16.2% to 17.5%, with the strongest growth in 2010 and 2011. However, private brands did not post a share growth gain in 2015, instead dropping from 17.7% to 17.4% in 2016. "Part of this is because some of the retailers have changed some of their strategies," Gorski said. "A lot of them have gone back to brands because they know consumers are willing to spend a little bit more."
But those own brand manufacturers who don't play "follow the leader" and instead seek to introduce their own innovation into a given category may be able to set themselves apart from the branded competition.
Gorski identified several ways to differentiate with regard to health:
- Clean labeling. "Consumers really want this," Gorski said. "Consumers have been becoming more savvy on what types of ingredients they are consuming."
- Innovation. "There are options out there," she said. "You don't have to be a follower. Make it convenient, cost effective and make it taste good."
- Indulgence. "Don't ignore the indulgence categories," Gorski noted. "[Healthy] snacks are a great option. Any category where there is a snacking opportunity, especially among millennials, there is an opportunity for development."