Market Overview
- Consumer behavior has made a major impact on the industry as many consumers are tending to prefer private label products over branded counterparts. This shift in preference is largely attributed to consumers seeing discrepancies in value and price between the two options, as private label products typically sell at a discount compared to branded products, while offering the same ingredient make up and great taste. Shopping behavior reflects these trends as private label products accounted for 20.7% of grocery industry unit sales in 2023, which was a record level according to the Private Label Manufacturers Association. This reflects growing interest in private label products at a retail-level which has and will continue to increase manufacturing needs for such products.
- Many branded and private label manufacturers alike are starting to expand private label initiatives and focus more on these opportunities to appeal to consumer preferences. According to the Food Industry Association, 80% of food manufacturers are expected to increase investment in private label brands over the next two years. Along with that, 71% of food manufacturers are implementing plans to optimize the availability of private label products.
- As economic conditions remain uncertain, private label products continue to be top of mind for consumers, strategic, and financial acquirers alike. With private label options being offered across various categories at discounted prices compared to branded competitors, strategic and financial acquirers are taking notice in the trend, increasing the competitive dynamic for quality private label manufacturers in the M&A arena, yielding premium valuations.
Industry Snapshot
The global private label food and beverage manufacturing market is expected to be valued at $463.9 billion in 2024
It’s also anticipated to grow at a CAGR of 7.4%, reaching a $662.8 billion by 2029
55%+ of consumers increased their private label food buying YoY
+$10.1B last year’s record YoY increase in private label food sales
80% of food manufacturers are increasing private label investment
