PART 4 - RECESSIONARY LESSONS TO APPLY TO PRIVATE LABEL TODAY - COVID-19 Recession Series
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Special COVID-19 Series:
Recession-Proof Your Business
PART 4 – RECESSIONARY
LESSONS TO APPLY TO
PRIVATE LABEL TODAY
May 28, 2020
Read Other Recession-Focused Reports:
Part 1 - How the Great Recession Reshaped the CPG Demand Curve
Part 2 - Maintaining Pricing Discipline in a Recession
Part 3 - How Big Brands Performed During the Great Recession
Context Executive Summary
Since the last recession,
select retailers have invested LESSONS FROM EMERGING TRENDS
heavily in Private Label THE GREAT RECESSION IN THE 2020 RECESSION
programs, many with tiered
offerings, product features and • Recessionary trends illustrate the • Patterns observed in the
benefits, not just price. power of Private Label during a Great Recession are emerging
down economy; $8B increase in the COVID-19-induced recession.
The COVID-19 recession between 2008-2010. • Both edible and nonedible Private Label
illustrates the bifurcation between • Where price gaps between Private outpaced National Brand growth since 2017,
the hardest hit – >40M Americans Label and National Brands existed, and continues to grow in 2020.
filing for unemployment – and the PL was favored; distribution also
gainfully employed who are • Categories that already have strong Private
had positive impact on PL sales. Label development continue to gain the most.
shifting purchases to remain
comfortable in their homes. • Costco, Kroger, Aldi, Walmart and • Walmart, Costco and Sam’s Club are driving
Target contributed the most to PL most of the current PL growth.
Private Label holds potential dollar share gains.
for retailers who want to reach • Private Label risk to brands is high when
• Categories that already had strong differentiation and loyalty are low, and the
consumers across the economic PL development gained the most.
spectrum, both as a trip-driver financial incentive for both shoppers and
and loyalty builder, and is retailers is strong.
an increasingly competitive
threat to national brands. • The IRI COVID-19 Impacts
IRI predicts 2020-21 PL growth HOW CAN Private Label programs require
• The COVID-19 Dashboard
of up to $20B, gaining an IRI HELP? sophisticated strategies. IRI assesses
additional 0.6 ppt share. risk and opportunity, pricing and • IRI CPG Demand Index™
distribution, innovation and marketing. • IRI Inflation Tracker™
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2
Private Label During the Great Recession
• Between 2008-2010, Food & Beverage Private Label share
grew 0.8 ppt, with $2.8B in PL share gains and $4.5B
incremental sales increase. Similarly, nonedible grew
2.2 ppt during the same period for net sales of $3.4B.
• PL Food & Beverage grew mostly through volume, but
also through price. In contrast, branded gains on pricing
were offset by volume contraction.
• 20 Food & Beverage categories, mostly refrigerated /
frozen and snacks, drove >90% of PL sales. PL gained
traction in categories where it already had strong presence.
• Five retailers (Costco, Kroger, Aldi, Walmart, Target)
contributed ~75% of PL gains, leveraging their strength
to make their brands recognizable to shoppers.
• PL helped most of the top 5 retailers gain loyalty but for
others, PL gains did not necessarily increase share of
wallet or buyers.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 3
Private Label Food & Beverage Growth Mostly
Outpaced Branded Growth During the Great Recession
Food & Beverage Branded and Private Label – All Outlets / % Change vs. YAG in $ Sales
Private Label Branded
12.5 THE GREAT RECESSION
11.1
10.2
9.4 9.2
8.0
7.3
6.9
6.2
5.4 5.6 5.3 5.1 5.3 5.2
4.7 4.6 4.4
3.9 3.9
2.8 3.1 2.8
2.4 2.6 2.1
1.1
0.6 0.5 0.4
-0.2 -0.2 -0.4 -0.4
-1.1 -1.4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011
Source: IRI Archived POS Data 2007-2011. FDMx refers to Food-Drug-Mass (excluding Walmart).
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4
Over 2+ Years of the Great Recession, Private Label Share
Grew, Accounting for Billions of Dollars in Sales Gains
F&B Private Label Dollar Share of Category (%), Sales Change from 2008 to Q2 2011 – All Outlets
+0.8
$4.5B Private Label Growth Decomposed
17.8 17.8 18.5 18.6
• How – Price vs. volume? If volume, what is the role of
(value) pricing compared to branded vs. distribution vs.
merchandising (using two categories, cookies and salty
snacks, as examples)?
2008 2009 2010 Q2 2011 • Where / Why – Which categories? Which retailers? Why?
$4.5B Incremental PL Sales • Who – Which shopper segments? What is the
$2.8B from PL Share Gains / $1.7B from Category Sales Increases contribution of Heavy users?
Private Label share in Nonedible also grew 2.2 ppts (from 14.4% to 16.6%) in the same time period, translating into sales
of $3.9B offset by $0.5B sales losses from declines in category sales (net PL sales increase in Nonedible = $3.4B).
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) and Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels).
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Private Label Increased Volume and Price
While Brands Lost Volume Sales as Prices Went Up
% Change, Q2 2011 vs. 2008 – All Outlets
Private Label Branded
1.0% 4.3%
Δ Price per Vol
7.1% 1.7%
Δ Dollar Sales
6.0% -2.4%
Δ Vol Sales
Source: IRI Archived POS Data. FDMx refers to Food-Drug-Mass (excluding Walmart) / Note: Change in price per vol = change in price per vol for each category weighted by category PL/Branded $ sales
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Increases in Price Gaps Between Brands and Private Label
Favored Private Label but Magnitude of Gaps Varied Among Retailers
Private Label Price Gaps, Share Changes – Cookies Private Label Price Gaps, Share Changes – Salty Snacks
52 WE Q2 2011 vs. 2008 52 WE Q2 2011 vs. 2008
Food Drug Mass/Club/Dollar Conv Food Mass/Club/Dollar Conv Drug
25.0 25.0 WAWA
Corr = 0.14 Corr = 0.56
20.0 20.0
Supervalu Shoppers Food
Change in PL vol share (ppt)
Albertsons
Change in PL vol share (ppt)
15.0 15.0
Target Big Y Supervalu Farm Fresh
10.0 10.0
Kroger Banner
5.0 5.0 Valero
Valero
Freds Dollar
0.0 0.0
Kroger Banner Target
-5.0 -5.0
-10.0 CVS -10.0
Penn Traffic
BJ’s
-15.0 -15.0 Minyard
-20.0 -20.0
-80 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 -80 -70 -30 -20 -10 0 10 20 30 40 50 60
Change in price gap (ppt) Change in price gap (ppt)
Low Positive Impact on PL Share High Positive Impact on PL Share
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart; Costco not available) / NOTE: Price Gap = (National Brand price - Private Label price)/National brand price
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 7
Distribution Also had a Positive Impact on Private Label
Share, Though Less Than the Impact of Price Gaps
Private Label Distribution, Share Changes – Cookies Private Label Distribution, Share Changes – Salty Snacks
52 WE Q2 2011 vs. 2008 52 WE Q2 2011 vs. 2008
Food Drug Mass/Club/Dollar Conv Food Mass/Club/Dollar Conv Drug
25.0 25.0
WAWA
Corr = 0.30 Corr = 0.19
20.0 20.0
Change in PL vol share* (ppt)
Change in PL vol share* (ppt)
15.0 15.0
10.0 Target 10.0
5.0 Kroger Banner Supervalu Express
Valero 5.0
Kroger Banner
0.0 0.0
Target
CVS
-5.0 CVS -5.0
-10.0 -10.0
BJ’s
-15.0 -15.0
Penn Traffic Minyard
-20.0 -20.0
-8 -6 -4 -2 0 2 4 8 10 12 14 -8 -6 -4 -2 0 2 4 6 8 10 12 14
Change in PL share of items in store* (ppt) Change in PL share of items in store* (ppt)
Medium Positive Impact on PL Share Low Positive Impact on PL Share
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) / NOTE: PL share of items = PL Avg Items per Store Selling/Total Avg Items per Store Selling.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 8
Merchandising Support Had Minimal Impact on Private
Label Share Gains Throughout the Great Recession
Private Label Merchandising, Share Changes – Cookies Private Label Merchandising, Share Changes – Salty Snacks
52 WE Q2 2011 vs. 2008 52 WE Q2 2011 vs. 2008
Food Drug Mass/Club/Dollar Conv Food Mass/Club/Dollar Conv Drug
25.0 25.0
WAWA
Corr = 0.10 Corr = 0.08
20.0 20.0
Change in PL vol share* (ppt)
Change in PL vol share* (ppt)
15.0 15.0
Supervalu Express
10.0 10.0 Kroger King Soopers
Duane Reade Target Kmart
5.0 5.0 Kroger Banner
0.0 0.0 C Farms
Target
Kroger Banner
-5.0 -5.0 Duane Reade
CVS CVS
-10.0 -10.0 Kroger City Market
-15.0 -15.0
Minyard
-20.0 -20.0
-8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24
Change in PL share of merchandising vs. Branded *(ppt) Change in PL share of merchandising vs. Branded* (ppt)
Low Impact on PL Share Low Impact on PL Share
Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) / NOTE: PL share of merchandising = PL total points of distribution, any merch / Branded total points of distribution, any merch
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 9
20 Food & Beverage Categories Drove 93% of Sales
Growth, Led by Refrigerated / Frozen Items and Snacks
Categories Driving F&B Private Label Dollar Sales Change / 52 WE Q2 2011 vs. 2008 - All Outlets
MORE THAN FAIR SHARE CONTRIBUTION
% of Total PL $ Share
Category Contribution to Total F&B Private Label $ Sales Gain in All Outlets PL $ Sales Gain (ppt)
Meat - Rfg 12.8 1.3% 30.0%
Salad/Coleslaw - Rfg 11.7 1.5% 14.3%
Seafood - Fz 7.6 2.4% 3.1%
Natural Cheese 7.5 6.5% 3.5%
Sugar 5.5 1.7% 4.0%
Butter 4.7 1.8% 3.5%
Salty Snacks 4.5 1.3% 1.1%
Breakfast Meats 4.3 1.3% 2.1%
Pastry/Doughnuts 3.9 0.9% 6.6%
Poultry - Fz/Rfg 3.6 1.4% 4.7%
Canned Meat 3.5 0.5% 9.3%
Cookies 3.4 1.5% 2.6%
Snack Nuts/Seeds/Corn Nuts 3.0 1.9% 0.5%
Meat - Fz 2.9 0.9% 4.4%
Other Snacks 2.7 0.7% 5.3%
Vegetables - Ss 2.6 1.6% 2.5%
Baked Goods - Rfg 2.3 0.3% 13.8%
Creams/Creamers 2.2 0.8% 1.4%
Bottled Water 2.1 3.1% 3.1%
Breakfast Food - Fz 1.7 0.4% 2.4%
All Other 7.5 68.4% -0.2%
Total Note: Top 20 categories based on contribution to total F&B
100.0 PL $ sales gain. All Other Sales Gains: 58%; All Other Sales Losses: -49%
Source: IRI Archived POS Data. FDMx refers to Food-Drug-Mass (excluding Walmart) and Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 10Categories That Contributed the Most to Private Label Dollar Sales
Gains Were Mostly Where Private Label Was Already Highly Developed
Top 20 Private Label Dollar Sales Gain Contribution F&B Categories
Private Label Share and Share Change, 52 WE Q2 2011 vs. 2008 – All Outlets
All Outlets
Bubble Size
(0.8 ppt) PL Strong
70 PL $ Sales in Category,
52 WE 5/15/2011 PL $ Share of Category (%)
Relative Proportion
65
Butter $600MM
60 Sugar
Meat - Rfg
55
50 Other Snacks
Snack Nuts/Seeds/Corn Nuts Baked Goods - Rfg
45 Seafood - Fz
Natural Cheese
40
35
Vegetables - Ss
30 Poultry - Fz/Rfg
Creams/Creamers Salad/Coleslaw - Rfg
25 Pastry/Doughnuts
Meat - Fz All Outlets
20 Breakfast Meats Bottled Water Canned Meat (18.6%)
Cookies
15
Salty Snacks
10
Breakfast Food - Fz PL Developing
5
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 14.0 30.5
PL Dollar Share of Category Chg 52 wks end 5/15/2011 vs. 2008 (ppt) Note: Top 20 categories based on contribution to total F&B PL Dollar sales gain.
Source: Source: IRI Archived POS Data, FDMx refers to Food-Drug-Mass (excluding Walmart) and Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 11Private Label Dollar Sales Gains Were Largely Driven by
a Few Retailers; ~75% of Total Gain Driven by Five Retailers
Retailers Driving Private Label F&B Dollar Sales Gain / 5.15.2011 vs. 2008 – Total F&B
MORE THAN FAIR SHARE CONTRIBUTION
% of Total PL $ Share
Retailers Contribution to Total Private Label Dollar Sales Gain PL $ Sales Gain (ppt)
Costco 18.4 5.7% 3.2%
Kroger 17.8 Top 5 retailers 9.3% 0.5%
Aldi 15.8 accounted for 5.7% 4.1%
Walmart 13.1 ~75% of 18.9% 1.4%
Target 10.4 growth 1.9%
2.2%
Sam’s Club 6.2 1.6% 2.2%
Wegmans 4.4 1.3% 2.2%
Ahold 3.8 2.8% 0.1%
Dollar General 2.1 0.4% 2.7%
Publix 1.5 3.6% -0.6%
CVS 1.5 0.4% 0.2%
Wakefern 1.3 1.2% -0.8%
Harris Teeter 1.2 0.7% 0.9%
Rite Aid 0.6 0.2% 1.3%
Food Lion 0.6 2.1% 0.3%
Family Dollar 0.2 0.1% -0.9%
Safeway 0.2 3.8% 1.1%
Winn Dixie 0.5 1.2% 0.3%
Walgreens 1.3 0.7% -2.9%
SuperValu 2.5 3.7% 1.7%
All Other 5.4 34.6% -0.1%
Total 100.0
Source: IRI Archived Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels)
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 12Retailers That Contributed the Most to Private Label Dollar Share Gains
Were More Successful Than Others in Driving Store Brand Recognition
% of Private Label Recognition at Leading Retailers
(% Respondents Recognizing Retailer’s Store Brand)
Costco 56
Kroger 60
Aldi 80
Walmart 90
Target 78
All Other* 47
*Consists of other retailers included in the survey (i.e., Supervalu, Delhaize, Publix, Walgreens, CVS, Dollar General, Meijer, Ahold, and Sam’s Club brands)c
Source: IRI Private Label Survey, April 2011
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 13Successful Private Label Programs Helped Retailers Grow Share of Wallet
or Buyers; Less Successful PL Programs Did Not Boost Retailer Loyalty
Retailers Private Label F&B Share and Share of Wallet Retailers Private Label F&B Share and Share of Buyers
Changes – 52 WE Q2 2011 vs. 2008 Changes – 52 WE Q2 2011 vs. 2008
Club Dollar Food Mass Drug Club Dollar Food Mass Drug
1 14
Correlation = -0.07 12 Correlation = -0.12 Harris Teeter
Change in retailer share of buyers* (ppt)
10
8 Wegmans
Change in retailer SOW (ppt)
Target
Kroger 6
Kroger Target
4
Costco Costco Aldi
2
Harris Teeter
Aldi 0
0 -2 Walmart
-4 A&P (w/ Pathmark)
SVU Cub
-6 SVU-Albertsons
-8
A&P (w/ Pathmark) SVU Cub
-10
-12
Walmart
SVU-Albertsons
-14
-16
-1 -18
-5 -4 -3 -2 -1 0 1 2 3 4 5 -5 -4 -3 -2 -1 0 1 2 3 4 5
Change in PL $ share (ppt) Change in PL $ share*(ppt)
Notes: Private Label $ Share = Private Label Edible / Total Edible; Share of Wallet = Retailer Share of Wallet out of All Outlets;
Share of Buyers = Retailer Buyers / Buyers in CRMA (Retailer Share of Market – Product Buyers)
Source IRI Archived Consumer Network Panel 2008-Q2 2011 (includes Walmart, Club and Dollar channels) .
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 14Shoppers Prefer Both Private Label Brands
and Name Brands in Places Where They Shop
% Who Agree or Strongly Agree With Statements
“ I Prefer to Shop at Stores
Where Store Brands EXIST in Most “ I Prefer to Shop at Stores Where
Availability of Store Brands DOMINATES
” ”
Food & Beverage Categories Over Availability of Name Brands
16%
strongly agree
30%agree
5%
strongly agree
12%
agree
46% 17%
like PL brands as an option, like PL brands as an option,
but dislike when PL but dislike when PL
DOMINATES brand names DOMINATES brand names
Source: IRI April 2011 Private Label Survey
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 15Private Label Growth During Past Recession Was Driven
by Younger and Middle- to High-Income Households
52 WE Q2 2011 vs. 2008 Private Label Dollar Sales Gain Contribution MORE THAN FAIR SHARE CONTRIBUTION
40% of Total Gains
17.1
14.5
9.0
7.8
6.2 6.1 6.4
5.3 5.1 4.9 4.7 4.5 4.5 4.1
PersonicX Jumbo Beginnings Cash & Golden Fortunes Flying Our Turn Aging Mature Flush Modest Middling Mature Other
Segments Families + Taking Careers Years & Solo/Mixed Upscale Rustics Families Means Singles + Wealth *
Hold Families Singles Mixed
Middlers
Share of Total
PL $ Sales 13% 5% 4% 9% 7% 2% 5% 4% 4% 8% 6% 4% 4% 25%
Income
$60K- $60K- $25K- $60K- $25K-
$60K >$60K >$120KAfrican American and High-Income Households Contributed
More Than Their Fair Share to Private Label Dollar Share Growth
MORE THAN FAIR SHARE CONTRIBUTION
52 Weeks Q2 2011 vs. 2008 52 Weeks Q2 2011 vs. 2008
Private Label Dollar Sales Gain Contribution Private Label Dollar Sales Gain Contribution
% Contribution to PL growth % Contribution to PL growth
78.1
45.3
31.5
23.2
12.3
9.6
Caucasian African Hispanic $70K and up $35K to 69.9K $34.9K <
American
Share of Total Share of Total
PL $ Sales 79% 10% 11% PL $ Sales 37% 33% 30%
Source: IRI Liquid Data Panel; All Outlets.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 17Shoppers’ Positive Perceptions of Private Label Products Increased
During the Great Recession and Contributed to PL Sales Gains
% Difference Between Heavy and Light Users That Heavy Users Share of Total
Agree or Strongly Agree With Statement Private Label F&B Sales
Grocery store brands are same
48% 32.2 33.8
or better than name brands
2008
Store brands are just as
38% Q2 2011
innovative as brand name
Store brands are as 20.3
34%
safe as name brands 19.0
Store brands are often made
24%
by brand manufacturers
Store brands are easy to
14%
find on the shelf
I always know which
10%
products are store brands
Name brands are worth % of PL F&B Users % Contribution to PL
-41% F&B Sales
the extra price
Notes: Sample size: Heavy shoppers (PL is 30% or more of total spend)= 412, Light shoppers (PL is 10% or less of total spend)= 427. Includes responses with 4 (Agree) and 5 (Strongly Agree)
Source: IRI Panel – All Outlets; IRI Private Label Survey, April 2011
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 18© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 19
2020 Trends and Implications
• Post COVID-19, Private Label continues its
momentum and has consistently outpaced national
brand growth in both edible and nonedible categories
over the past three years.
• Categories that already have strong Private Label
development continue to gain the most.
• Private Label growth is retailer specific – Walmart,
Costco and Sam’s Club have driven a vast majority of
edible PL growth and Walmart and Costco have driven
all the growth in nonedible.
• Sales of Private Label will reach $15B-$20B dollars in
sales in 2020 vs. the $5B sales gains experienced in
2019-2018; share to increase 0.6 ppts.
• Private Label risk to brands is high when differentiation
and loyalty are low, and the financial incentive for both
shoppers and retailers is strong.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 20Private Label Has Consistently Outpaced National Brand Growth in
Both Edible and Nonedible Categories Over the Past Three Years
Quarterly Brand Dollar Performance % Chg vs YAG // Total Store // MULO Private Label
Branded
2017 2018 2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Edible
6.5 7.0
5.2 5.1 4.7
3.8 4.1
3.4
3.0 2.5 2.4 2.6 3.1 2.7
2.2
1.5 1.4 1.0 1.4 1.3
0.6 0.6
0.0
-1.1
Nonedible
7.2 7.1 6.7
6.1 5.9 5.7 6.1 5.8
5.6
4.3 4.6
2.5
0.8 1.1
0.5 0.6 0.5 0.1 0.4 0.6 0.4 0.1
0.0 0.0 0.0
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 21Both Edible and Nonedible Private Label Brands Have Taken Share Since 2017,
With the Highest Point Gain Seen in Nonedible Categories (+1.6pts)
Private Label Dollar Share % // CY 2019 v 2017 // MULO
Edible Nonedible
+0.7 +1.6
18.7 18.9
18.5
18.1
18.0 17.3
2017 2018 2019 2017 2018 2019
PL Dollars ($B) PL Dollars ($B)
$77.0 $80.5 $83.2 $38.7 $41.1 $43.5
$6.2B Incremental PL Edible Sales $4.8B Incremental PL Nonedible Sales
$3.1B from PL share gains $3.6B from PL share gains
$3.1B from category sales increases $1.2B from category sales increases
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 22Since 2017, Private Label Edible Grew Volume Sales While Holding Prices
Steady; Nonedible Private Label Grew Price / Volume But Also Increased Volume
Drivers of Growth // CY 2019 vs 2017 // MULO
Edible Nonedible
+4.5% -0.5% +7.8% +5.2%
National Private National Private
Brands Label Brands Label
Δ Price per vol Δ Price per vol
+3.6% +8.1% +0.8% 12.3%
Δ Dollar Sales Δ Dollar Sales
(2019 vs 2017) (2019 vs 2017)
-0.9% +8.6% -6.5% +6.7%
Δ Vol Sales Δ Vol Sales
Source: IRI Total Store POS / Note: Change in price per vol = change in price per vol for each category weighted by category PL/Branded $ sales
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23Refrigerated and Frozen Categories Led Private Label Edible
Growth 2017-2019, Along with Bottled Water and Nuts / Seeds
TOP 5 SELLERS DURING THE LAST
Edible Categories Driving Private Label Dollars // CY 2019 v 2017 // MULO RECESSION (YEAR-ENDED 2010)
Edible Category Contribution To Edible Growth Mix & Share
Ranked by PL absolute % Chg vs % of Total PL $ Share Pt
% of absolute dollar change vs 2017
dollar change 2019 vs 2017 2017 PL $ Chg vs 2017
1 MEAT - RFG 13% 27.6% 4.3 8.0
2 BOTTLED WATER 10% 18.9% 4.9 1.2
3 SEAFOOD - FZ 10% 27.9% 3.5 8.2
4 NATURAL CHEESE 10% 11.5% 7.4 3.4
5 SNACK NUTS/SEEDS 5% 25.1% 2.0 6.6
6 FRESH EGGS 4% 8.8% 4.0 1.6
7 ENTREES - RFG 4% 51.2% 0.9 4.5
8 BREAKFAST MEATS 4% 18.1% 1.7 2.1
9 WHIPPED TOPPINGS - RFG 3% 42.3% 0.7 7.3
10 COFFEE 3% 12.2% 1.9 1.6
11 SIDE DISHES - RFG 3% 25.9% 1.0 2.6
12 SPICES/SEASONINGS 2% 16.9% 1.2 2.2
13 COOKIES 2% 11.4% 1.7 0.8
14 CREAMS/CREAMERS 2% 17.3% 1.1 0.8
15 BAKING NUTS 2% 31.1% 0.7 13.8
16 PLAIN VEGETABLES - FZ 2% 11.4% 1.5 1.6
17 PROCESSED POULTRY - FZ/RFG 2% 28.8% 0.6 3.2
18 SALTY SNACKS 2% 8.8% 1.6 0.0
19 LUNCHEON MEATS 2% 10.9% 1.3 1.7
20 BUTTER/BUTTER BLENDS 2% 7.3% 1.7 0.8
ALL OTHER 13% 1.8% 56.3 -0.2
TOTAL EDIBLE PRIVATE LABEL 100% 8.1% 100% 0.6
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 24Pet Supplies as Well as Paper Products Led Nonedible
Private Label Performance Over the Past Few Years
Nonedible Categories Driving Private Label Dollars // CY 2019 v 2017 // MULO
Nonedible Category Contribution To Nonedible Growth Mix & Share
Ranked by PL absolute % Chg vs % of Total PL $ Share Pt
% of absolute dollar change vs 2017
dollar change 2019 vs 2017 2017 PL $ Chg vs 2017
1 PET SUPPLIES 11% 43.7% 3.8 9.7
2 TOILET TISSUE 10% 24.7% 5.3 3.8
3 PAPER TOWELS 6% 17.0% 4.2 3.1
4 CUPS & PLATES 5% 11.5% 5.8 3.5
5 KITCHEN STORAGE 4% 32.7% 2.0 4.9
6 SOCKS 3% 25.5% 1.9 6.1
7 FIRST AID ACCESSORIES 3% 19.9% 1.8 4.7
8 CANDLES 3% 29.3% 1.2 5.6
9 PET TREATS 2% 40.6% 0.9 2.2
10 CLEANING TOOLS 2% 31.8% 1.0 4.1
11 GASTROINTESTINAL 2% 8.5% 3.2 2.5
12 DIAPERS 2% 11.8% 2.3 1.4
13 VITAMINS 2% 5.3% 4.8 -0.4
14 TIGHTS 2% 18.2% 1.3 3.9
15 MOIST TOWELETTES 2% 27.0% 0.9 5.3
16 FOOD & TRASH BAGS 2% 4.2% 4.6 1.1
17 HH CLEANER CLOTHS 2% 40.5% 0.6 5.2
18 AIR FRESHENERS 1% 20.8% 0.9 1.5
19 NASAL PRODUCTS 1% 20.6% 0.9 3.0
20 SLEEPING REMEDIES 1% 25.0% 0.8 -1.5
ALL OTHER 33% 7.5% 51.7 0.8
TTL NONEDIBLE PRIVATE LABEL 100% 12.3% 100% 1.6
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 25Private Label Secured the Largest Share Gains in the Edible
Categories That Already Had High Private Label Development
Top-20 Edible Category Share Gain // CY 2019 v 2017 // MULO
Private Label
70 Dollar Size
($MM) $1,000
65 MEAT - RFG
PL Strong
60
FRESH EGGS SEAFOOD - FZ
55 WHIPPED TOPPINGS - RFG
BUTTER/BUTTER BLENDS
50 BAKING NUTS
PL Dol Shr % (2019)
45 NATURAL CHEESE
40 PLAIN VEGETABLES - FZ
SNACK NUTS/SEEDS/CORN NUTS
35
30 BOTTLED WATER SPICES/SEASONINGS
ENTREES - RFG
PL Developing
25 SIDE DISHES - RFG
BREAKFAST MEATS
PL Edible 20
Avg (18.7%) COOKIES PROCESSED POULTRY - FZ/RFG
15
CREAMS/CREAMERS LUNCHEON MEATS
10 GROUND COFFEE
SALTY SNACKS
5
-0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 7.0 7.5 8.0 14.0
PL Edible
Avg (+0.7) PL Dol Shr Pt Chg (2019 vs 2017)
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 26Similar to Edible, Private Label is Taking Share in Nonedible
Categories Where it is Already Established and Growing
Top-20 Nonedible Category Share Gain // CY 2019 v 2017 // MULO
Private Label
75 Dollar Size
TIGHTS ($MM) $500
70
PL Strong
65
60 CUPS & PLATES
55 FOOD & TRASH BAGS
SLEEPING REMEDIES
PL Dol Shr % (2019)
50 GASTROINTESTINAL MOIST TOWELETTES
45 PET SUPPLIES
FIRST AID ACCESSORIES
40
35
PAPER TOWELS CANDLES SOCKS
30
PL Developing
VITAMINS NASAL PRODUCTS
25
HH CLEANER CLOTHS
TOILET TISSUE
PL Nonedible 20 DIAPERS
Avg (18.9%) KITCHEN STORAGE
15
AIR FRESHENERS CLEANING TOOLS
10 PET TREATS
5
-1.5 -1.0 -0.5 0.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 10.0
PL Nonedible
Avg (+1.6) PL Dol Shr Pt Chg (2019 vs 2017)
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27Walmart and Club Retailers Comprised the Top-3 Growing TOP RETAILERS DRIVING PRIVATE LABEL
DOLLAR SALES GAINS DURING THE LAST
Private Label Growth Contributors Within Edible RECESSION (YEAR-ENDED 2010)
Top Retailers Driving Edible PL Dollars // CY 2019 v 2017 // All Outlets // National Consumer Panel
Retailer Contribution to Edible Growth Mix & Share
Ranked by PL absolute Change % of Total PL $ Share Pt
% of absolute dollar change vs 2017
dollar change 2019 vs 2017 Index* PL $ Chg vs 2017
1 Walmart 61% 206 29.4 2.1
2 Costco 13% 131 9.6 0.7
3 Sams Club Top-5 = *90% of 10% 296 3.3 2.7
4 Kroger PL Edible Growth 4% 67 6.2 -0.2
5 Aldi 2% 19 11.2 -1.3
6 Trader Joes 2% 64 2.9 0.2
7 Dollar General 2% 217 0.9 -1.2
8 Lidl 1% 833 0.2 -4.7
9 Food Lion 1% 120 0.8 -1.0
10 Safeway 1% 59 1.6 0.6
11 Frys 1% 153 0.6 -0.1
12 Hannaford 1% 183 0.5 1.2
13 Pick N Save 1% 379 0.2 1.6
14 Ralphs 1% 152 0.5 0.9
15 Meijer 1% 48 1.4 0.0
16 King Soopers 1% 112 0.6 -0.2
17 Fred Meyer 1% 88 0.8 -0.9
18 Albertsons 1% 106 0.6 0.6
19 Weis Markets 1% 236 0.2 1.5
20 DeCA Commissary 1% 747 0.1 1.4
All Other 3% NA 28.3 -0.4
ALL OUTLETS 100% 100% 0.5
Source: IRI National Consumer Panel / *Index = contribution to sales change / contribution to total sales
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 28In Nonedible, Significant Growth in Walmart Private Label GREATEST PL RECOGNITION AMONG
SHOPPERS DURING THE LAST
Was Offset by Declines in Walgreens’ and Sam’s Programs RECESSION (YEAR-ENDED 2010)
Top Retailers Driving Nonedible PL Dollars // CY 2019 v 2017 // All Outlets // National Consumer Panel
Retailer Contribution to Nonedible Growth Mix & Share
Ranked by PL absolute Change % of Total PL $ Share Pt
% of absolute dollar change vs 2017
dollar change 2019 vs 2017 Index* PL $ Chg vs 2017
1 Walmart 130% 188 69.0 3.3
2 Costco 13% 255 5.1 1.0
3 Dollar General 2% 641 0.3 6.8
4 Target 0% -- 1.3 0.0
5 Kroger 1% -- 4.5 -1.4
6 Aldi 1% -- 3.0 3.7
7 Meijer 1% (196) 0.6 -0.8
8 Walgreens 14% (409) 3.3 -4.6
9 Sam’s Club 18% (1,142) 1.6 -1.8
All Other 11% (93) 11.4 -0.5
ALL OUTLETS 100% 100% 0.5
Source: IRI National Consumer Panel
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 29Private Label Continues to Grow Share of Both Edible and Nonedible in 2020
YTD 2020 Private Label Dollar & Unit Share// MULO Dol Share Unit Share
Edible Nonedible
22.5 22.8 22.5 25.9
22.3 22.2 22.4 24.7 25.0
24.0 24.2 24.5
CURRENT %
CURRENT %
19.4 20.1
18.9 18.9 18.9 18.7 18.8 19.4 19.1 19.2 19.6 19.1
YTD 4 WE 4 WE 4 WE 4 WE 4 WE YTD 4 WE 4 WE 4 WE 4 WE 4 WE
2020 1.26.20 2.23.20 3.22.20 4.19.20 5.17.20 2020 1.26.20 2.23.20 3.22.20 4.19.20 5.17.20
0.8 2.2
0.6
PT CHG VS. YAG
PT CHG VS. YAG
0.6 0.6 1.6 1.5
0.5 0.4 1.2
0.4 1.1
0.3 0.3 0.3 0.9 0.8
0.3 0.2 0.6 0.7 0.7 0.7
0.4
YTD 4 WE 4 WE 4 WE 4 WE 4 WE YTD 4 WE 4 WE 4 WE 4 WE 4 WE
2020 1.26.20 2.23.20 3.22.20 4.19.20 5.17.20 2020 1.26.20 2.23.20 3.22.20 4.19.20 5.17.20
IRI Forecast
Large-format Private Label sales growth will reach $15B-$20 in 2020. Due in part to increased consumption, PL will enjoy
an accelerated increase in share of up to 0.6 points. Private Label for 52 WE 5.17.2020 is up ~$12B vs. comparable period YAG.
Source: IRI Total Store POS
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 30Private Label Risk is High When Differentiation and Loyalty Are Low,
and the Financial Incentive for Both Shoppers and Retailers is Strong
Framework to Assess Threat of Private Label for Branded Manufacturers
FACTORS DRIVING HIGH PRIVATE LABEL RISK IN CATEGORIES
Comparability Pricing Distribution Loyalty Margin Appeal
Side-by-side Price gap is large Fewer national Retailers drive trust Category is
comparisons are between private label brands and & brand recognition traditionally lower
simple; little and national brands, products available in their private label margin for the
perceived difference providing consumers per store to meet (e.g. Whole Foods retailer, driving
in attributes or claims additional incentive diverse shopper 365, Kirkland) them to push for
needs stronger profits
Price difference Smaller craft brands Demand is highly
is evident, as private are popular, allowing Brands are highly fragmented with Private label moves
label options are private label to mimic regionalized, limiting lower levels of beyond value
directly comparable their cache without a widespread brand loyalty, showing pricing to higher
in size and count large premium recognition and loyalty a willingness to margin Mainstream
for national brands cross-shop and Premium tiers
Source: IRI Growth Consulting.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 31Insights and Strategic
Guidance for Better Decisions
IRI’s Online Resources Include Real-Time
Updates and Weekly Reports Which Track
the Impact of the Virus on CPG and Retail
The IRI COVID-19 lmpact
Includes COVID-19 impact analyses, dashboards
and the latest thought leadership on supply chain,
consumer behavior, channel shifts for the U.S.
AND international markets
IRI CPG Economic Indicators Including the
IRI CPG Demand Index™, IRI CPG Supply
Index™ and IRI CPG Inflation Tracker™
Accessible through the insights portal
to track the daily impact of COVID-19.
This includes top selling and out-of-stock
categories across the country and
consumer sentiment on social media
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 32The Latest COVID-19 Reports and Insights from IRI (click to see full report)
THE CHANGING SHAPE OF LESSONS FROM
IRI COVID-19 IMPACT ASSESSMENT REPORTS THE CPG DEMAND CURVE THE GREAT RECESSION
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 33IRI CPG Demand Index™
The IRI CPG Demand Index™ provides a
standard metric for tracking changes in
spending on consumer packaged goods. It
measures weekly changes in consumer
purchases, by dollar sales, against the year-
ago period across departments including fixed
and random weight products, grocery aisles
and retail formats. The IRI CPG Demand
Index™ is available for eight U.S. regions and
all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 34IRI CPG Inflation Tracker™
The IRI CPG Inflation Tracker™ provides the
well-known price per unit metric for tracking
changes in pricing of consumer packaged
goods. It provides weekly changes in
consumer prices, price per unit against the
year-ago period across departments including
fixed and random weight products, grocery
aisles and retail formats. The IRI CPG
Inflation Tracker™ is available for eight U.S.
regions and all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 35IRI CPG Supply Index™
The IRI CPG Supply Index™ provides a
standard metric for tracking changes in
product availability (i.e. in-stock rates) in
stores for consumer packaged goods. It
measures weekly changes in product
availability against the baseline across
departments and retail formats. The IRI
CPG Supply Index™ is available for eight
U.S. regions and all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 36IRI Global Headquarters
CONTACT US 150 North Clinton Street
Chicago, IL 60661-1416
FOR MORE IRI@IRIworldwide.com
+1 312.726.1221
INFORMATION Follow IRI on Twitter: @IRIworldwide
© 2020 Information Resources Inc. (IRI).
© 2020 Information Resources Inc. (IRI). Confidential
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