The biggest threat to brands in the food business is private label. For decades, during recessionary periods, private label product sales would rise, then quickly slide away when the economy improves. Not this time.

Walmart’s new Bettergoods brand is the latest retailer strategy to steal market share from other brands. According to the Wall Street Journal, the new brand has been in the works for years. The mass merchant will add more than 300 Bettergoods items to their shelves this year with many of the items costing $5 or less.

Bettergoods is the upscale version of Walmart’s 4,000 Great Value brand products ranging from toilet paper to green beans that are rock bottom priced. Sam’s Choice is another Walmart private label brand of roughly 200 items was priced to be more premium in quality, but according to a Walmart spokesperson, caused confusion at the shelf so look for Sam’s Choice products to be relegated to Great Value, be upscaled to Bettergoods or disappear. Thus, the retailer will clearly differentiate its private label offering to two brands, a commodity brand and an upscale one.

Bettergoods will offer upscale packaging and instead of knocking off a big brand’s look, taste and benefits, this line will be unique in its offerings. Items such as Chicken Wings with Brown Sugar BBQ Dry Rub and Double Vanilla Ice Cream or Campfire Roasted Salsa are examples. The overall strategy is to attract new, often higher-income shoppers more frequently and to encourage current shoppers to spend more.

The barbell approach by retailers of offering a commodity and premium private label brand is working extremely well with some categories that grew by the low double digits in unit sales are seeing private label sales commanding eight or nine percent of that growth. It is a significant issue for any manufacturer’s brand. So, how should they react?

5 Tips on Battling Against Private Label

1. Double Down on Retention Strategies – Hang on to your brand loyalists by ramping to communications to them via social media and loyalty newsletters. Add value with content focused on additional uses of your product, new recipes calling for it, and discounts through your loyalty program.
2. Win Back Lapsed Customers – Platforms such as Ibotta and retailer networks monitor consumer purchases. Set programs that incentivizes those who haven’t purchased your brand in 30–60 days with special discounts. Likewise, target shoppers of competitive brands to try yours with pricing incentives.
3. Add New Products to Your Line Up That Sets You Apart – Invigorate your new product pipeline and reduce development time to be more nimble is adding new, exciting products to the shelf.
4. Add Call Outs on Your Packaging – To educate shoppers on the uniqueness of your brand’s products add call outs. For example, a call out that your product uses natural sugar or real honey.
5. Show Up in The Pre-Shop – Leverage retailer networks to have your brand front and center on their website’s for those using pick-up or delivery of their orders. Make the sale before shoppers enter the store to be wooed away by private label or competitor brand offers.  

 If your brand is being attacked by private label and competitors, we can help. Let’s have a discussion about a customized approach to your dollar and unit sales growth.