Private labels are quickly gaining popularity with retailers. Cheese Market News cites Krista Faron of market research firm Mintel saying “Retailers no longer launch me-too products to compete against major national brands, instead private label lines are hotbeds of creativity driving markets and establishing themselves as trend leaders. Mintel reports nearly 1,800 new private label foods were introduced in the U.S. in 2009 making up more than a quarter of all the food products introduced last year. That is more than double the percentage of products in 2005. The big driver was the economy as retailers looked for ways to help Americans spend less on quality products. Faron says private labels retailers answered the call by creating premium in-home meals that boast restaurant quality and fresh ingredients. High quality lunches were another area where private labels excelled. The study also found that while convenience remains a driver, health and nutrition are increasingly important in food items.
Ed Howie with Brand-True says cheese offers some great opportunities for retailers. Instead of just offering cheddar, offer a variety of blends, flavors and heritage. “Private label brands are recognizing an opportunity and are able to demonstrate an expertise offering some higher level, unique specialty cheese. In fact, Mintel says most of the recent growth in cheese consumption can be attributed to specialty cheeses. Since 2004, private label processed cheese sales have increased 13 percent and private label sales of natural cheeses have jumped 56 percent. The research also finds 8 out of 10 consumers who buy store brand cheese say the quality is as good as the name brands so price is what drives them to purchase.
Dr. Pearce Lyons founded Alltech, based in Lexington, Kentucky; the company now markets products around the world. He says for dairy producers, much like for his company, you have to create and market a brand. “There’s no future in milk production if you’re just producing milk and someone else is setting the price for you.” He stresses that for dairy producers to be sustainable; they must utilize technology, create a brand, create an image and then relate that image to the consumer.