How Private Brands Can Excel And Aid Consumers Amid A Challenging Economy


Michael Taylor is President of Daymon, a global solution provider influencing all aspects of Private Brand development.

As a veteran of the private brands industry, I’ve seen a lot of different economic cycles come and go with various impacts on retailers and consumers.

That said, I haven’t seen a cycle quite like this one. The difference today is there are so many challenges hitting all at once. Surging inflation is driving markedly higher prices for consumers, retailers and consumer products manufacturers. And lingering supply chain problems that began during the height of the pandemic and advanced during the latest geopolitical conflict are creating uncertainty for everyone.

Even if inflation begins to subside, I believe the impact on consumer behaviors will be long-lasting. I predict that private brands are going to emerge as a more critical solution for consumers in the balance of this year. I see two powerful and quite different opportunities for private brands going forward. Let me briefly explain each one.

Opportunity 1: Help Consumers Navigate This Economy

Recent stats tell the story of consumers’ economic pain and concerns. About three quarters of U.S. consumers rank inflation as the most serious economic problem. In fact, consumers facing soaring prices even tend to overestimate the actual level of inflation by more than two times the actual number.

Lower-income shoppers generally face the biggest difficulties as they spend about 77% of their budgets on necessities, compared to just 31% for higher-income ones. When it comes to food as a core necessity, food retailers can help these shoppers by ensuring their private brand programs are participating in WIC and SNAP where eligible.

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It is understandable that price increases hit lower-income shoppers the hardest, but notably 95% of consumers are concerned about food cost inflation. I suggest retailers aim to use their private brands to help all shoppers spend smartly and find overall savings as they face inflationary pressures.

Beyond inflation, the prospect of recession is also a growing concern. Consumers view private brands as a key solution in times like these, when heavily focused on saving money and seeking better value. Almost 70% say private brands are sometimes or always a better value for their money than national brands—a point that holds up whether for opening price point or premium categories. To help shoppers navigate this economy, promote private brand options that provide savings on price and create better overall value, like solutions across a variety of categories and bulk options.

Opportunity 2: Meet Consumers’ Lifestyle Needs

Another opportunity I see for private brands resides in consumers’ lifestyle preferences. I firmly believe consumers have forever changed in seeking out customized solutions to their needs. They expect brands to come through for them. I predict that inflation and recession will not derail this accelerating trend. I see a few key areas where lifestyle needs are rising to the top, including health and wellness, convenience and sustainability. With 89% of consumers trusting private brands just as much or more than national brands, I recommend that retailers capitalize on lifestyle needs to position their brands to win.

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Health and wellness has become imperative, especially in the wake of the pandemic. Consumers buying food, for example, are increasingly scrutinizing labels and product claims. I find that private brands have become leaders in meeting new health and wellness needs—in many cases with product lines dedicated to attributes such as organic or fewer ingredients.

Another example of a growing lifestyle need is convenience-focused products, platforms and experiences. I notice that consumers are insisting on convenience in product choices and purchasing options, in aspects ranging from quick checkout to grab-and-go items. Interestingly, the biggest audience for what I’m calling lifestyle needs isn’t low-income shoppers. It is middle- and high-income households, given their greater levels of spending and brand loyalty. An especially promising audience is younger shoppers, many of whom have advancing incomes and are more open to private brand trial versus older customers. In fact, 46% of Gen Z view private brands as better than national brands when it comes to offering new and innovative products.

Shoppers are considering lifestyle needs focused on sustainability, with the objective of minimizing environmental harm becoming more important to them.

With over 60% of private brand consumers interested in eco-friendly packaging, retailers can consider using this as a tool to support sustainability. Sustainable innovation is being brought to life through creative packaging problem solving and innovative materials such as molded fiber technology using wheat shaft, coconut fibers and even a plastic made from corn. Consider how to better solve for minimizing environmental harm; this may mean creatively unpacking or using monopackaging with no added label. Opportunities beyond packaging include sustainably-sourcing ingredients and cleaning up supply chain operations as tools to achieve sustainability in private brand programs.

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Succeeding With Both Opportunities

Private brands can gain from both opportunities by helping meet consumers’ needs as this volatile economic landscape continues to shift and adjust over the last quarter of this year. We know that price and savings become critical for many consumers in challenging economic times.

Syndicated data sources like Nielsen and IRI show that private brands don’t just grow during economic downturns but hold at even higher levels when the downturns are over, gaining an estimated $35 billion between 2008 and 2022–bringing to light both the importance of private brands to customers during recessions and their loyalty to store brands when they are over.

Consumer trust and loyalty are granting private brands permission to step out of their legacy role as merely price leaders. I find that this has led executives to develop highly customized and innovative solutions to consumer needs–an essential strategy regardless of the economic cycle. Thoughtfully implementing customer-centric strategies will benefit both retailers and shoppers as we navigate the end of 2022 and beyond.


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