Sustainability, design, and premiumisation: your Private Brand questions, answered

The private brand juggernaut just keeps on rolling. In 2024, sales of private brand products grew by almost four percent—a threefold increase on that of the national brands¹. And as shoppers have flocked to private label, forward-thinking retailers have upped their investments into those lines. By doing so, they’ve ensured that customers will have good reasons to buy even as the economic instability of the past few years continues to fade from view.

In a recent webinar with the Private Label Manufacturer’s Association, we explored some of the key factors that form the core of a successful private brand. As explained in our writeup of that session, those retailers that are “winning” with private brand are typically doing three things better than the competition:

• They’re creating products that resonate with their customers.
• They’re treating private brand as a genuine brand.
• And they’re using data science and artificial intelligence (AI) to optimise their operations.

At the end of that webinar, we also took a moment to respond to a few questions from our attendees. As always seems to be the way, though, we didn’t have quite enough time to answer everything that was asked. So, in this follow-up post, we’re going to dive into four great questions that we missed out on first time around.

1. Many retailers are increasing the sustainability credentials of their private brand offerings at the moment. In your experience, how are shoppers responding to that, specifically any changes in private brand packaging?
    
   Sustainability is becoming increasingly important for consumers as a whole. In our own research—studies like the Consumer Pulse and Retailer Preference Index—we’ve seen a significant pivot towards sustainable behaviours. Many customers are now actively trying to make better choices for the planet when shopping, and they have a stronger emotional connection with retailers that help them do so, too.

   Packaging is an integral part of that movement, and we’re seeing a number of retailers making significant strides in this area. The response from customers has been positive, too; 34% of respondents to our most recent Consumer Pulse study said that “using packaging that’s good for the environment” is one of the key retail trends that excites them most. Private brand will be no different in that respect.

2. You mentioned that it’s important to differentiate private brand value tiers via packaging design. Can you explain why that it is, and how those differences resonate with customers?
    
   Packaging design is absolutely crucial to the success of a private brand. In our last blog, we mentioned that the best private brand retailers are leaning into storytelling and branding, and that carries through into the packaging of those products as well.

   One of the main watchwords here is ‘consistency’. Today, retailers offer private brand products across a range of different categories, food and non-food alike. Consistent label design is important, because it helps customers to pick those products out quickly and easily while they’re browsing.

   A few tier-based design guidelines are worth bearing in mind here, too.

   Value-tier goods

   • Materials should be simple and functional and not offer any “added value” benefits (e.g. plastic packaging shouldn’t be resealable).
   • Labelling should be basic, using few colours.
   • The product should be visible through the packaging or pictured in a basic photo.

   Mainstream-tier goods

   • Here, materials should be of a similar quality to the benchmark national brand.
   • Mainstream-tier products should also communicate the same product benefits as the benchmark brand (where relevant)—5-in-1 dishwasher tablets, for example.

   Premium-tier goods

   • At this tier, packaging should use premium materials. Packaging should feel aspirational and innovative.
   • Colours and design should be evocative of other premium products. Black and silver are common in this tier.
   • Added value or decorative features can help to communicate the extra layer of quality here—compostable packaging or embossing, for instance.
3. The premium segment has been mentioned a few times as a key private brand opportunity. When a lot of retail account buyers are trying to match their brand with those offered by hard discounters, how exactly does that premium tier come into play?
    
   Ultimately, different private brand tiers should play different roles; it’s not a case that private brand automatically equates to “lowest-cost option”. Because of that, it isn’t really recommended to try and match a premium-tier proposition to value-tier pricing.

   While retailers will often match (or beat) pricing on competing value and mainstream-tier offerings, it’s less important to do so on premium-tier products. That tier is—and always should be—focused on offering the best possible quality.

4. Why are we seeing so many shoppers now buying private brand goods in favour of “famous” brands?
    
   Private brands have always appealed to shoppers due to their affordability, but there’s now another dimension in play: quality. Retailers have become far more intentional about private brand products in recent years, resulting in more sophisticated products. This is particularly true amongst the larger retailers, whose scale is allowing them to deliver both value and quality to customers.

   There’s another factor to consider here, and that’s the increased presence of discount retailers. The growth (and increasing popularity) of discount retail has undoubtedly reduced some of the stigma associated with shopping more affordably, and that has carried over to private brands as well.

   The momentum that we’ve seen in recent years will continue. Private brand offerings will continue to evolve, with digital channels, loyalty programmes, and advanced technologies at the heart of retailers’ efforts. Innovation in product development, sourcing, and supply chain, meanwhile, will all help to further enhance those private brand propositions—ensuring enduring appeal to shoppers.

Missed the first post in this two-part series? Learn more about the hallmarks of a successful private brand here - Winning with private brands, the customer-first way. Want to know the whole story? Check out a full on-demand recording of “Winning with Private Brands, the Customer-First Way” here - PLMA's Lunch and Learn Webinar with dunnhumby - 27 November - Zoom.
 

1 The private label boom: Why some grocers are betting on their own brands – New Hope Network, 20th February 2025