Data - Nielsen

Private Label in the U.S.
Tom Pirovano
The Nielsen Company
September, 2008
Confidential & Proprietary • Copyright©2008 The Nielsen Company
Meet our Presenter
Tom Pirovano
([email protected])
Director of Industry Insights
The Nielsen Company
• 22 years of CPG sales and marketing analysis
• Joined Nielsen in 1997
• Previous account management positions at Nielsen include
Walgreens, Quaker Oats, & Kraft
• Before Nielsen, managed marketing information at Dean Foods,
Mid-Central Food Sales (now Advantage Sales & Marketing),
and IRI
• MBA from DePaul University
• Tom’s industry studies cover topics including private label,
healthy eating, trade promotion, pricing, Wal-Mart, and
consumer dynamics
Private Label in the U.S.
Page 2
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Questions Addressed
• What’s driving private label growth?
• How does global development drive up food
prices?
• How are private label categories performing?
• Is health & wellness relevant for private label?
• How is the role of private label changing?
• What opportunities exist for retailers &
manufacturers?
Private Label in the U.S.
Page 3
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
What’s driving private label growth?
Confidential & Proprietary • Copyright©2008 The Nielsen Company
Private Label Dollar Sales Are ON FIRE
PL $ Sales
PL $ Share of Store
Current
52-Wks
Yr Ago
52-Wks
Change
$80.3B
$72.9B
+10.1%
16.2%
Private Label sales are up
15.3% +0.9 pts
by $7.4 BILLION
Source: Nielsen Strategic Planner, Total U.S. Grocery/Drug/Mass Including Wal-Mart, 52 Weeks Ending 8/9/08
Private Label in the U.S.
Page 5
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Private label is growing across all channels
Category
Grocery Channel
Drug Channel
Wal-Mart
52-Week
PL $ Sales
Chg Vs
Yr Ago
$ Share
of Store
$52.0 B
+9.9%
17.9%
$5.3 B
+13.2%
12.9%
$19.6 B
+11.2%
15.5%
While private label growth crosses channels,
share-of-store varies based on product mix.
Source: Nielsen Strategic Planner, Total U.S. Grocery/Drug/Mass Including Wal-Mart, 52 Weeks Ending 8/9/08
Private Label in the U.S.
Page 6
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Private label dollar sales continue to grow
$5.1 Billion
4 W/E 09/06/08
4 W/E 08/09/08
4 W/E 07/12/08
4 W/E 06/14/08
4 W/E 05/17/08
4 W/E 04/19/08
4 W/E 03/22/08
4 W/E 02/23/08
4 W/E 01/26/08
4 W/E 12/29/07
4 W/E 12/01/07
4 W/E 11/03/07
4 W/E 10/06/07
4 W/E 09/08/07
4 W/E 08/11/07
4 W/E 07/14/07
4 W/E 06/16/07
4 W/E 05/19/07
4 W/E 04/21/07
4 W/E 03/24/07
4 W/E 02/24/07
4 W/E 01/27/07
4 W/E 12/30/06
4 W/E 12/02/06
4 W/E 11/04/06
4 W/E 10/07/06
4 W/E 09/09/06
4 W/E 08/12/06
4 W/E 07/15/06
4 W/E 06/17/06
4 W/E 05/20/06
4 W/E 04/22/06
4 W/E 03/25/06
4 W/E 02/25/06
4 W/E 01/28/06
4 W/E 12/31/05
4 W/E 12/03/05
4 W/E 11/05/05
4 W/E 10/08/05
4 W/E 09/10/05
4 W/E 08/13/05
4 W/E 07/16/05
4 W/E 06/18/05
4 W/E 05/21/05
4 W/E 04/23/05
4 W/E 03/26/05
4 W/E 02/26/05
4 W/E 01/29/05
4 W/E 01/01/05
4 W/E 12/04/04
4 W/E 11/06/04
4 W/E 10/09/04
4 W/E 09/11/04
4 W/E 08/14/04
4 W/E 07/17/04
4 W/E 06/19/04
4 W/E 05/22/04
4 W/E 04/24/04
4 W/E 03/27/04
4 W/E 02/28/04
4 W/E 01/31/04
4 W/E 01/03/04
4 W/E 12/06/03
4 W/E 11/08/03
4 W/E 10/11/03
4 W/E 09/13/03
$3.5 Billion
4-Week Private Label Dollar Sales
5 Years Ending September 6th, 2008
$4.9 Billion
$4.7 Billion
$4.5 Billion
$4.3 Billion
$4.1 Billion
$3.9 Billion
$3.7 Billion
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, Private Label 4-Week Dollar Sales
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Page 7
Private Label in the U.S.
PL share started to grow last summer
17.5%
Private Label Dollar Share of Total Store
17.0%
4 W/E 09/06/08
4 W/E 08/09/08
4 W/E 07/12/08
4 W/E 06/14/08
4 W/E 05/17/08
4 W/E 04/19/08
4 W/E 03/22/08
4 W/E 02/23/08
4 W/E 01/26/08
4 W/E 12/29/07
4 W/E 12/01/07
4 W/E 11/03/07
4 W/E 10/06/07
4 W/E 09/08/07
4 W/E 08/11/07
4 W/E 07/14/07
4 W/E 06/16/07
4 W/E 05/19/07
4 W/E 04/21/07
4 W/E 03/24/07
4 W/E 02/24/07
4 W/E 01/27/07
4 W/E 12/30/06
4 W/E 12/02/06
4 W/E 11/04/06
4 W/E 10/07/06
4 W/E 09/09/06
4 W/E 08/12/06
4 W/E 07/15/06
4 W/E 06/17/06
4 W/E 05/20/06
4 W/E 04/22/06
4 W/E 03/25/06
4 W/E 02/25/06
4 W/E 01/28/06
4 W/E 12/31/05
4 W/E 12/03/05
4 W/E 11/05/05
4 W/E 10/08/05
4 W/E 09/10/05
4 W/E 08/13/05
4 W/E 07/16/05
4 W/E 06/18/05
4 W/E 05/21/05
4 W/E 04/23/05
4 W/E 03/26/05
4 W/E 02/26/05
4 W/E 01/29/05
4 W/E 01/01/05
4 W/E 12/04/04
4 W/E 11/06/04
4 W/E 10/09/04
4 W/E 09/11/04
4 W/E 08/14/04
4 W/E 07/17/04
4 W/E 06/19/04
4 W/E 05/22/04
4 W/E 04/24/04
4 W/E 03/27/04
4 W/E 02/28/04
4 W/E 01/31/04
4 W/E 01/03/04
4 W/E 12/06/03
4 W/E 11/08/03
4 W/E 10/11/03
4 W/E 09/13/03
14.0%
July-07 – Sept-08
16.5%
16.0%
15.5%
15.0%
14.5%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, Private Label 4-Week Dollar Share of Store
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Page 8
Private Label in the U.S.
Private label dollar growth is driven more
by pricing than by unit volume
5.5 Billion
4 W/E 09/06/08
4 W/E 08/09/08
4 W/E 07/12/08
4 W/E 06/14/08
4 W/E 05/17/08
4 W/E 04/19/08
4 W/E 03/22/08
4 W/E 02/23/08
4 W/E 01/26/08
4 W/E 12/29/07
4 W/E 12/01/07
4 W/E 11/03/07
4 W/E 10/06/07
4 W/E 09/08/07
4 W/E 08/11/07
4 W/E 07/14/07
4 W/E 06/16/07
4 W/E 05/19/07
4 W/E 04/21/07
4 W/E 03/24/07
4 W/E 02/24/07
4 W/E 01/27/07
4 W/E 12/30/06
4 W/E 12/02/06
4 W/E 11/04/06
4 W/E 10/07/06
4 W/E 09/09/06
4 W/E 08/12/06
4 W/E 07/15/06
4 W/E 06/17/06
4 W/E 05/20/06
4 W/E 04/22/06
4 W/E 03/25/06
4 W/E 02/25/06
4 W/E 01/28/06
4 W/E 12/31/05
4 W/E 12/03/05
4 W/E 11/05/05
4 W/E 10/08/05
4 W/E 09/10/05
4 W/E 08/13/05
4 W/E 07/16/05
4 W/E 06/18/05
4 W/E 05/21/05
4 W/E 04/23/05
4 W/E 03/26/05
4 W/E 02/26/05
4 W/E 01/29/05
4 W/E 01/01/05
4 W/E 12/04/04
4 W/E 11/06/04
4 W/E 10/09/04
4 W/E 09/11/04
4 W/E 08/14/04
4 W/E 07/17/04
4 W/E 06/19/04
4 W/E 05/22/04
4 W/E 04/24/04
4 W/E 03/27/04
4 W/E 02/28/04
4 W/E 01/31/04
4 W/E 01/03/04
4 W/E 12/06/03
4 W/E 11/08/03
4 W/E 10/11/03
4 W/E 09/13/03
2.0 Billion
Private Label 4-Week DOLLAR Sales
Private Label 4-Week UNIT Sales
5.0 Billion
4.5 Billion
4.0 Billion
3.5 Billion
3.0 Billion
2.5 Billion
Source: Nielsen Strategic Planner, Total U.S. FDMxWM
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Page 9
Private Label in the U.S.
What’s driving private label growth?
Dollar
Change Vs.
Year Ago
Unit
Change Vs.
Year Ago
Total Store
+4.4%
-0.7%
Brands
+3.4%
-1.0%
Private Label
+10.1%
+0.4%
Private label dollar growth is
driven more by higher unit prices
than a shift away from brands.
Source: Nielsen Strategic Planner, Total U.S. Grocery/Drug/Mass Including Wal-Mart, 52 Weeks Ending 8/9/08
Private Label in the U.S.
Page 10
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Private label units are up in recent months
+4%
28 weeks ending 9/6/08
+2%
4 W/E 09/06/08
4 W/E 08/09/08
4 W/E 07/12/08
4 W/E 06/14/08
4 W/E 05/17/08
4 W/E 04/19/08
4 W/E 03/22/08
4 W/E 02/23/08
4 W/E 01/26/08
4 W/E 12/29/07
4 W/E 12/01/07
4 W/E 11/03/07
4 W/E 10/06/07
4 W/E 09/08/07
4 W/E 08/11/07
4 W/E 07/14/07
4 W/E 06/16/07
4 W/E 05/19/07
4 W/E 04/21/07
4 W/E 03/24/07
4 W/E 02/24/07
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Page 11
Private Label in the U.S.
4 W/E 01/27/07
4 W/E 12/30/06
4 W/E 12/02/06
4 W/E 11/04/06
4 W/E 10/07/06
4 W/E 09/09/06
4 W/E 08/12/06
4 W/E 07/15/06
4 W/E 06/17/06
4 W/E 05/20/06
4 W/E 04/22/06
4 W/E 03/25/06
4 W/E 02/25/06
4 W/E 01/28/06
4 W/E 12/31/05
-5%
Private Label Unit Sales Change Vs. Year Ago
+3%
+1%
+0%
-1%
-2%
-3%
-4%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, Private Label 4-Week Dollar Sales
Many growth categories are commodities
Nielsen Category
Flour
Eggs - Fresh
Pasta
Vegetables & Grains - Dry
Dessert/Fruit/Tops - Frozen
Yogurt
Cheese
Milk
Fresh Meat (UPC-Coded)
Shortening/Oil
Dollar % Chg
Vs. Year Ago
+30.5%
+28.2%
+16.8%
+13.5%
+12.5%
+11.3%
+11.0%
+10.9%
+10.4%
+9.1%
Unit % Chg
Vs. Yr Ago
+7.2%
-0.9%
Top growth
+0.6%
categories are
+0.1%
dominated by
+2.9%
private
label.
+1.2%
-2.2%
-2.9%
+7.3%
-3.3%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Excludes some smaller categories
Private Label in the U.S.
Page 12
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
For many categories with dollar growth, units are flat
Nielsen Category
Flour
Eggs - Fresh
Pasta
Vegetables & Grains - Dry
Dessert/Fruit/Tops - Frozen
Yogurt
Cheese
Milk
Fresh Meat (UPC-Coded)
Shortening/Oil
Dollar % Chg
Vs. Year Ago
Unit % Chg
Vs. Year Ago
+30.5%
+28.2%
+16.8%
+13.5%
+12.5%
+11.3%
+11.0%
+10.9%
+10.4%
+9.1%
+7.2%
-0.9%
+0.6%
+0.1%
+2.9%
+1.2%
-2.2%
-2.9%
+7.3%
-3.3%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Excludes some smaller categories
Private Label in the U.S.
Page 13
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How does global development
drive up food prices?
Confidential & Proprietary • Copyright©2008 The Nielsen Company
Global populations are shifting
2050
(mm)
1. India
1,807
2. China
1,424
3. United States
420
4. Nigeria
357
5. Indonesia
313
5. Pakistan
295
7. Bangladesh
280
8. Brazil
228
9. DR of Congo
183
10. Mexico
148
2006
(mm)
1. China
1,314
2. India
1,095
3. United States
298
4. Indonesia
245
5. Brazil
188
6. Pakistan
166
7. Bangladesh
147
8. Russia
143
9. Nigeria
132
10. Japan
127
Source: US Census Bureau, International Programs Center;
International Data Base and unpublished tables
Private Label in the U.S.
Page 15
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How will this car affect U.S. food prices?
Private Label in the U.S.
Page 16
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How do more cars lead to higher food prices?
Higher Prices for…
• Corn Sweeteners
• Livestock Feed
• Wheat/Soy/Rice as
farmers shift to corn
Private Label in the U.S.
Page 17
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
In a number of countries, older consumers
already have a significant presence
28
18.7
24.8
Nigeria
India
25.6
Mexico
33.2
World
Median
China
36.6
US
38.2
39.6
42.5
43.5
UK
Italy
Japan
Russia
Source: CIA World Fact Book; Commission of the European Community
Private Label in the U.S.
Page 18
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to Older Households
Category
$ Index Vs.
65+ HH’s
Vitamins
Medications/Remedies
Fruit - Canned
Flour
Pain Remedies
Canning, Freezing Supplies
Floral, Gardening
Coffee
Butter & Margarine
Desserts/Fruits/Toppings-Frzn
Nuts
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
153
144
140
135
130
125
120
120
118
117
117
Excludes smaller or “misc.” categories.
Page 19
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to High-Income Households
Category
Wine
Liquor
Floral, Gardening
Family Planning
Baby Needs
Spreads/Dips, Dairy
Skin Care Preparations
Fresh Produce (UPC-Coded)
Yogurt
Juices, Drinks - Refrigerated
Diet Aids
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
$ Index Vs.
>$100k HH’s
216
162
151
150
149
146
146
145
144
144
142
Excludes smaller or “misc.” categories.
Page 20
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to Large Households
Category
$ Index Vs.
5+ Member HH’s
Disposable Diapers
Baby Food
Prepared Food-Dry Mixes
Sanitary Protection
Fruit - Dried
Breakfast Food
Soft Drinks-Non-Carbonated
Juices, Drinks-Frozen
Cereal
Ethnic HBC
Table Syrups, Molasses
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
243
223
188
179
176
173
169
168
168
166
166
Excludes smaller or “misc.” categories.
Page 21
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to Households
With Teenagers
$ Index Vs.
HH’s w/Kids 13-17
Category
Sanitary Protection
Ethnic HBC
Gum
Breakfast Food
Pizza/Snacks/Hors d’oeuvres-Frzn
Prepared Food-Dry Mixes
Deodorant
Dough Products
Stationery, School Supplies
Hair Care
Unprep Meat/Poultry/Seafood-Frzn
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
192
175
174
173
164
163
159
154
153
150
150
Excludes smaller or “misc.” categories.
Page 22
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to Households
With Young Children
Category
$ Index Vs.
HH’s w/Kids <6
Disposable Diapers
Baby Food
Baby Needs
Family Planning
Fruit - Dried
Prepared Food-Dry Mixes
Juices, Drinks-Frozen
Yogurt
Breakfast Food
Juices, Drinks - Shelf Stable
Dough Products
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
584
506
354
281
182
168
166
153
153
150
150
Excludes smaller or “misc.” categories.
Page 23
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to Acculturated Hispanics
Category
$ Index Vs.
Acculturated Hispanics
Baby Food
Vegetables & Grains - Dried
Disposable Diapers
Baby Needs
Hair Care
Ice
Fragrances - Women
Grooming Aids
Cosmetics
Men's Toiletries
Juices, Drinks - Shelf Stable
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
190
187
164
160
145
136
136
133
133
133
131
Excludes smaller or “misc.” categories.
Page 24
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Categories Skewing to African Americans
$ Index Vs.
African American HH’s
Category
Ethnic HBC
Feminine Hygiene
Fragrances - Women
Vegetables & Grains - Dried
Fresheners & Deodorizers
Personal Soap & Bath Additives
Juices, Drinks - Shelf Stable
Unprep Meat/Poultry/Seafood-Frzn
Spices, Seasoning, Extracts
Juices, Drinks - Refrigerated
Flour
Source: Homescan® Consumer Facts, CY’07
Private Label in the U.S.
765
167
155
141
140
139
131
131
129
123
123
Excludes smaller or “misc.” categories.
Page 25
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How are private label
food categories performing?
Confidential & Proprietary • Copyright©2008 The Nielsen Company
Food categories that generate the most
private label dollars
Nielsen Category
PL Milk
PL Bread & Baked Goods
PL Cheese
PL Eggs-Fresh
PL Fresh Produce (UPC-Coded)
PL Deli (UPC-Coded)
PL Packaged Meat
PL Unprep Meat/Seafd-Frz
PL Bottled Water
PL Vegetables-Frozen
52-Week
Dollar Sales
$8.1 Billion
$3.8 Billion
$3.6 Billion
$2.5 Billion
$2.2 Billion
$1.5 Billion
$1.4 Billion
$1.3 Billion
$1.2 Billion
$1.2 Billion
Chg Vs Share of
Yr Ago Category
+15%
+9%
+20%
+32%
+17%
+12%
+2%
+7%
+6%
+5%
60%
27%
35%
72%
16%
26%
13%
43%
22%
33%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 27
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Food categories with high private label share
Nielsen Category
PL Eggs-Fresh
PL Milk
PL Unprep Meat/Seafd-Frz
PL Sugar/Sugar Substitutes
PL Cot Chs/Sr Crm/Topping
PL Cheese
PL Fruit-Canned
PL Juices/Drinks-Frozen
PL Vegetables-Frozen
PL Dessert/Fruit/Tops-Froz
52-Week
Dollar Sales
$2.5 Billion
$8.1 Billion
$1.3 Billion
$0.6 Billion
$0.8 Billion
$3.6 Billion
$0.5 Billion
$0.1 Billion
$1.2 Billion
$0.4 Billion
Chg Vs Share of
Yr Ago Category
+32%
+15%
+7%
-4%
+11%
+20%
+6%
+2%
+5%
+4%
72%
60%
43%
43%
36%
35%
34%
34%
33%
33%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 28
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Food categories with strong PL growth
Nielsen Category
PL Flour
PL Baby Food
PL Eggs-Fresh
PL Pasta
PL Shortening/Oil
PL Breakfast Foods-Frozen
PL Cheese
PL Vegetables & Grains-Dry
PL Coffee
PL Fresh Produce (UPC-Coded)
52-Week
Dollar Sales
$103 MM
$65 MM
$2,501 MM
$334 MM
$680 MM
$192 MM
$3,587 MM
$278 MM
$345 MM
$2,219 MM
Chg Vs Share of
Yr Ago Category
+35%
+33%
+32%
+24%
+23%
+21%
+20%
+18%
+17%
+17%
20%
2%
72%
23%
32%
14%
35%
30%
9%
16%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Excludes some smaller categories
Private Label in the U.S.
Page 29
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Very few food categories show declining
private label dollar sales
Nielsen Category
52-Week
Dollar Sales
Chg Vs Share of
Yr Ago Category
PL Sugar/Sugar Substitutes
$602 MM
-4%
43%
PL Juices & Drinks-Ref
$429 MM
-1%
11%
PL Carbonated Beverages
$804 MM
-0.2%
6%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Excludes some smaller categories
Private Label in the U.S.
Page 30
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Top-selling private label food items
52-Week
Dollar Sales
Item Description
PL 2% Milk, 1 Gallon
PL Whole Milk, 1 Gallon
PL 1% Milk, 1 Gallon
PL Skim Milk, 1 Gallon
PL Eggs, Grade A Lrg, 12-Ct
PL Whole Milk, 64 oz.
PL Eggs, Grade AA Lrg, 12-Ct
PL Eggs, Grade A Lrg, 18-Ct
PL Eggs, Grade AA Lrg, 18-Ct
PL 2% Milk, 64 oz.
$2,099 MM
$1,727 MM
The top private
$764 MMlabel items are
$609 MMall milk and egg
$576 MMproducts.
$311 MM
$299 MM
$297 MM
$286 MM
$172 MM
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 31
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How are private label
non-food categories performing?
Confidential & Proprietary • Copyright©2008 The Nielsen Company
NON-FOOD categories that generate the most
private label dollars
Nielsen Category
PL Paper Products
PL Medications/Remedies
PL Wrapping Materials, Bags
PL Cough & Cold Remedies
PL Vitamins
PL First Aid
PL Pain Remedies
PL Kitchen Gadgets
PL Laundry Supplies
PL Disposable Diapers
52-Week
Dollar Sales
$2,530 MM
$1,592 MM
$925 MM
$800 MM
$754 MM
$566 MM
$541 MM
$409 MM
$345 MM
$344 MM
Chg Vs Share of
Yr Ago Category
+6%
+13%
+3%
+18%
+3%
+11%
+7%
+0%
-2%
-5%
24%
21%
36%
20%
20%
33%
22%
24%
16%
14%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 33
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NON-FOOD categories with high PL share
Nielsen Category
52-Week
Dollar Sales
PL Wrapping Materials Bags
$925 MM
PL First Aid
$566 MM
PL Buckets/Bins/Bath Acc
$284 MM
PL Charcoal/Logs/Accessories
$174 MM
PL Paper Products
$2,530 MM
PL Kitchen Gadgets
$409 MM
PL Pain Remedies
$541 MM
PL Medications/Remedies
$1,592 MM
PL Vitamins
$754 MM
PL Cough & Cold Remedies
$800 MM
Chg Vs Share of
Yr Ago Category
+3%
+11%
-18%
+4%
+6%
+0%
+7%
+13%
+3%
+18%
36%
33%
27%
25%
24%
24%
22%
21%
20%
20%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 34
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Copyright © 2008 The Nielsen Company
NON-FOOD categories with high PL growth
Nielsen Category
52-Week
Dollar Sales
PL Personal Soap/Bath Needs
$168 MM
PL Cough And Cold Remedies
$800 MM
PL Hair Care
$95 MM
PL Sanitary Protection
$155 MM
PL Skin Care Preparations
$182 MM
PL Medications/Remedies
$1,592 MM
PL Detergents
$189 MM
PL First Aid
$566 MM
PL Shaving Needs
$101 MM
PL Oral Hygiene
$254 MM
Chg Vs Share of
Yr Ago Category
+23%
+18%
+18%
+16%
+16%
+13%
+12%
+11%
+10%
+10%
9%
20%
2%
11%
6%
21%
4%
33%
5%
7%
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 35
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Copyright © 2008 The Nielsen Company
What are the top-selling NON-FOOD
private label items?
52-Week
Dollar Sales
Item Description
Paper Towels, 2-Ply, 8-Ct
$66 MM
Aluminum Foil, Standard, 75 SqFt
$54 MM
Paper Plates, White, 9-Inch, 100-Ct
$42 MM
Liquid Bleach, 96 oz.
$39 MM
Toilet Tissue, 2-Ply, 352-Sheet, 12-Ct
$37 MM
Aluminum Foil, Standard, 200 SqFt
$34 MM
Toilet Tissue, 2-Ply, 200-Sheet, 12-Ct
$33 MM
Aluminum Foil, Standard, 25 SqFt The top $31
MM PL
Non-Food
Toilet Tissue, 1-Ply, 1000-Sheet, 12-Ct
$28
MM
items are
dominated
by
Aluminum Foil, Hvy Duty, 50 SqFt paper & $27
MM
foil products.
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 36
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Copyright © 2008 The Nielsen Company
Is health & wellness relevant
for private label?
Confidential & Proprietary • Copyright©2008 The Nielsen Company
Many health & wellness claims show
strong growth vs. year ago
Health and
Wellness Claim
Natural
Low Fat
Absence of Specific Fat
52-Week
Dollar Sales
$21.8 Billion
$14.9 Billion
$13.3 Billion
Chg Vs
Year Ago
+11.4%
+3.9%
+30.5%
$11.3 Billion
$10.6 Billion
$10.0 Billion
$8.5 Billion
$5.8 Billion
$5.5 Billion
$4.7 Billion
$2.1 Billion
$1.9 Billion
$1.6 Billion
+9.7%
+8.6%
+5.2%
+9.6%
-0.6%
-2.2%
+22.5%
+16.6%
+15.8%
+1.8%
(Trans Fat or Saturated Fat)
Reduced Calories
Cholesterol Free
Fat Free
Reduced Fat
No Calories
Caffeine Free
Organic
Multi-Grain
Antioxidants
Good Source of Fiber
Source: Nielsen LabelTrends, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 38
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Private label sales are underdeveloped for some
key health & wellness claims
Health and
Share of Food & Beverage Sales
Wellness Claim
Private Label
Branded
Natural
8.1%
9.0%
Example: Cholesterol
Low Fat
6.7%
5.9%
Free products generate
Absence Of Specific Fat
0.6%
6.6%
(Trans Fat or Saturated Fat)
Reduced Calories
Cholesterol Free
Fat Free
Reduced Fat
No Calories
Caffeine Free
Organic
Multigrain
Antioxidants
Good Source Of Fiber
1.3%
1.0%
4.7%
6.7%
0.7%
0.7%
1.9%
0.4%
0.2%
0.1%
5.4%
5.1%
3.9%
2.6%
2.7%
2.6%
1.9%
0.9%
0.9%
0.8%
only 1% of private label
food & beverage sales,
but represent 5.1% of
branded sales.
Source: Nielsen LabelTrends, FDMxWM, 52 Weeks Ending 9/6/08
Share of Food & Beverage Categories Excluding Alcohol
Private Label in the U.S.
Page 39
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Copyright © 2008 The Nielsen Company
Private label organics are under-developed for
some categories and over-developed for others
52-Week
Dollar Sales
Category
Organic Milk
$1,020 Million
Organic Fresh Produce
$882 Million
Organic Snacks
$204 Million
Organic Cereal
$186 Million
Organic Yogurt
$182 Million
Organic Baby Food
$170 Million
Organic Prep’d Frz Foods
$155 Million
Organic Eggs
$143 Million
Organic Soup
$140 Million
Organic Bread/Bkd Goods
$105 Million
Total Organic Food/Bev $4,727 Million
Organic Share of
Total Food & Bev
PL
Branded
1.9%
13.1%
4.0%
2.6%
2.7%
9.5%
2.3%
2.0%
3.1%
0.4%
1.9%
16.0%
5.1%
1.7%
2.5%
5.3%
4.3%
1.8%
9.6%
3.4%
0.9%
1.9%
Source: Nielsen LabelTrends, FDM, 52 Weeks Ending 9/6/08, All Categories
Private Label in the U.S.
Page 40
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Copyright © 2008 The Nielsen Company
Top-selling private label organic items (UPC-Coded)
Item Description
52-Week
Dollar Sales
PL Organic 2% Milk, 64 oz
$41.4 MM
PL Organic Skim Milk, 64 oz
$38.1 MM
PL Organic Brown Eggs, 12-ct
$31.7 MM
PL Organic Mini Carrots, 16 oz
$20.3 MM
PL Organic Romaine Hearts, 3-ct
$15.7 MM
PL Organic Spring Salad Mix, 16 oz
$15.6 MM
PL Organic Baby Spinach, 5 oz
$12.7 MM
PL Organic Tomatoes, 16 oz.
$9.1 MM
PL Organic Baby Spring Salad Mix, 16 oz
$8.8 MM
PL Organic Spinach Blend Salad,
oz PL organics
$8.1 MM
Top5ten
are
all dairy & produce items.
Source: Nielsen Strategic Planner, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 41
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Sales of organics have continued to grow, but…
$400 MM
52-week dollars are up
23% vs. year ago,
however, sales in recent
months are leveling off
$150 MM
$100 MM
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
4 W/E
09/06/08
08/09/08
07/12/08
06/14/08
05/17/08
04/19/08
03/22/08
02/23/08
01/26/08
12/29/07
12/01/07
11/03/07
10/06/07
09/08/07
08/11/07
07/14/07
06/16/07
05/19/07
04/21/07
03/24/07
02/24/07
01/27/07
12/30/06
12/02/06
11/04/06
10/07/06
09/09/06
08/12/06
07/15/06
06/17/06
05/20/06
04/22/06
03/25/06
02/25/06
01/28/06
12/31/05
12/03/05
11/05/05
10/08/05
09/10/05
08/13/05
07/16/05
06/18/05
05/21/05
04/23/05
03/26/05
02/26/05
01/29/05
01/01/05
12/04/04
11/06/04
10/09/04
09/11/04
08/14/04
07/17/04
06/19/04
05/22/04
04/24/04
03/27/04
02/28/04
01/31/04
01/03/04
12/06/03
11/08/03
10/11/03
09/13/03
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Page 42
Private Label in the U.S.
2008
2007
2006
2005
2004
2003
$0 MM
4-Week Period End Dates
$300 MM
Sales of UPC-Coded Organic Products
$350 MM
$250 MM
$200 MM
$50 MM
Source: Nielsen LabelTrends, Total U.S. Grocery/Drug/Mass Excluding Wal-Mart
Private Label Execution
and Opportunities
Confidential & Proprietary • Copyright©2008 The Nielsen Company
Private label share varies across markets
25%
20%
Total U.S.
17.8%
SAN ANTONIO
COLUMBUS
LOUISVILLE
BUFFALO/ROCHESTER
MEMPHIS
LITTLE ROCK
DENVER
NASHVILLE
SYRACUSE
CINCINNATI
PHOENIX
INDIANAPOLIS
GRAND RAPIDS
SALT LAKE CITY/BOISE
ATLANTA
LAS VEGAS
DETROIT
JACKSONVILLE
ORLANDO
ALBANY
SEATTLE
SAN DIEGO
PORTLAND
WEST TEXAS
LOS ANGELES
DALLAS
TOTAL US
OMAHA
BALTIMORE
RALEIGH/DURHAM
CHARLOTTE
HOUSTON
RICHMOND/NORFOLK
TAMPA
SACRAMENTO
WASHINGTON D.C.
BIRMINGHAM
SAN FRANCISCO
KANSAS CITY
MIAMI
BOSTON
CLEVELAND
HARTFORD/NEW
PITTSBURGH
ST. LOUIS
PHILADELPHIA
MINNEAPOLIS
CHICAGO
NEW ORL/MOBILE
OKLAHOMA
DES MOINES
MILWAUKEE
NEW YORK
OAHU
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Page 44
Private Label in the U.S.
San Antonio
25.8%
30%
15%
10%
5%
0%
Source: Nielsen Strategic Planner, Grocery Channel, 52 Weeks Ending 9/6/08
Topco’s “Full Circle” Line
• Private Label Brand Focused on
Organic & Natural
• Available at Several Major
Retailers
• 500 Products in 50 Categories
• Includes Vitamins, Mineral &
Supplements
Private Label in the U.S.
Page 45
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Tesco’s Fresh & Easy (2.0)
• 70% of sales from private label
• On 9/10, announced 200 new PL products by the end of 2008
• “All Fresh & Easy own-brand products contain no artificial colors or
flavors, no added trans fats, and only use preservatives when
absolutely necessary.”
• Survey: “Over 80% of customers cite Fresh & Easy’s own-brand
products as one of the main reasons they shop at the stores”
• 83 Stores in Southern California, Arizona, & Nevada
• Average 3,000 SKU’s Per Store
• Average Store Size: 10,000 Square Feet
• New “warmer” format rolled out in July
Private Label in the U.S.
Page 46
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
New Walgreens site
dedicated to their private
label: www.WBrand.com
Private Label in the U.S.
Page 47
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New Milk Containers
• At Costco and Sam’s Club
• Flat Tops
• No Crates or Racks
• Uses Less Space
• Hard to Pour???
Private Label in the U.S.
Page 48
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How many of Wal-Mart’s
own private label brands
can you name?
Private Label in the U.S.
Page 49
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Wal-Mart has many private label brands
across a wide range of categories
Food/Bev/
HBC Brands
(not available online)
Non-Food
Apparel
•
•
•
•
•
•
•
•
Great Value – Food & Beverage
Sam’s Choice – Premium Grocery
Equate – HBC
Ol’ Roy – Dog Food
Special Kitty – Cat Food
Sunny Meadow – Eggs
Spring Valley – Vitamins
Maxximum Nutrition – Premium Pet Food
•
•
•
•
•
•
•
•
•
Ever Active – Batteries
Durabrand – Electronics
HomeTrends – Furniture & Appliances
Kid Connection – Toys
Mainstays – Home Fashion
Ozark Trail – Outdoor Equipment
Popular Mechanics – Tools
SuperTech - Automotive
White Cloud – Toilet Tissue & Diapers
•
•
•
•
George
Faded Glory
White Stag
Mary Kate & Ashley
Private Label in the U.S.
•
•
•
•
This list will continue
to expand with new
Wal-Mart formats.
•
•
•
•
•
•
•
•
Canopy - Furniture
Get it Together – Furniture
Hometrends – Home Products
Everstart – Car Batteries
Holiday Time – Seasonal Items
ilo – Electronics
ReliOn – Medical Test Kits
SuperTech – Motor Oil
Metro 7
No Boundaries (or NoBo)
Simply Basic
Athletic Works
• Life – Underwear
• Puritan
• Simply Basic
Page 50
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
In which categories does Wal-Mart private label
out-perform the grocery channel?
Wal-Mart PL share can be a
benchmark for other retailers.
PL Sugar/Sugar Substitutes
PL Vitamins
PL Soft Drinks-Non Carb
PL Snacks/Spreads/Dip-Dairy
PL Unprep Meat/Seafood-Frz
PL Pasta
PL Pain Remedies
PL Seafood-Canned
PL Shortening/Oil
PL Vegetables & Grains-Dry
PL Milk
Share of Category
Grocery
Wal-Mart
Channel
64.7%
34.4%
25.8%
28.3%
56.2%
34.2%
31.1%
21.6%
41.5%
40.2%
71.5%
43.6%
16.0%
8.5%
14.4%
43.4%
22.1%
19.9%
10.6%
31.2%
30.1%
61.6%
Share
Gap
21%
18%
17%
14%
13%
12%
11%
11%
10%
10%
10%
Source: Nielsen Wal-Mart Channel and Strategic Planner, 52 Weeks Ending 8/9/08
Private Label in the U.S.
Page 51
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Marketside – Wal-Mart’s Newest Banner
• Scheduled to open soon
• First 4 Locations Near Phoenix, AZ
– 7561 E. Baseline Road, Mesa
– 910 E. Elliott Road, Gilbert
– 950 N. McQueen Road, Chandler
– 838 W. Elliott Road, Tempe
• 15,000-20,000 Square Feet of Selling Space
– Half the Size of a Neighborhood Market
This new banner allows Wal-Mart
to attract upscale shoppers
without the Wal-Mart name or
“Big Box” image.
http://www.marketside.com
Private Label in the U.S.
Page 52
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
In the convenience channel private label is
under-developed in several key categories
PL $ Share of Category
Category
C-Store
FDMxWM
PL Carbonated Beverages
0.5%
5.7%
PL Snacks
1.0%
7.2%
PL Juices Drinks-Shelf Stable
0.5%
12.2%
PL Candy
0.8%
4.7%
PL Bottled Water
6.6%
22.4%
PL Milk
15.9%
59.9%
PL Tea
6.2%
5.3%
PL Coffee
0.2%
1.2%
PL Frozen Novelties
0.8%
15.9%
PL Nuts
1.4%
30.5%
Source: Nielsen Convenience Track and Strategic Planner, Total US, 52 Weeks Ending 9/6/08
Private Label in the U.S.
Page 53
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Private Label as an Exclusive Destination
Private Label in the U.S.
Page 54
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How can traditional brands compete?
• New Sizes / Packaging
–Example: Dean Milk Chugs
–Avoid direct price comparison
–Odd ounces or metric sizes
–Value sizes are environmentally friendly
• New Perceived Value / Labeling
–“New and Improved” - 1970’s strategy
–Bonus Packs – for price transitions
–Health & wellness claims
–Local ties (packing, farms, offices)
• Avoid “Cheapening” Your Brands
–Reducing package size may be risky
–Cheaper ingredients may degrade brand equity
Private Label in the U.S.
Page 55
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Nielsen Store Brand Solutions
A new solution for
retailers to develop
their store brands
using a wide range of
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For more information,
talk with your Nielsen
representative or
contact Lisa Rider at
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Private Label in the U.S.
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Page 56
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Some Key Take-Aways:
• Private label dollar sales are on fire
– Up $7.4 Billion
• PL dollar growth is driven more by higher prices than
switching from brands
– Although recent months show higher PL units too
• Explosive growth of organics is leveling off
– Organics are still up 23% vs. previous 52 weeks
– PL is under-developed for many health & wellness claims
• The role of private label is changing
– No longer just a cheap alternative to brands
• Opportunities exist for those who understand where
private label is large, growing, or under-developed
Private Label in the U.S.
Page 57
Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Thank You
Any Questions?
Confidential & Proprietary • Copyright©2008 The Nielsen Company