GROCERY INDUSTRY, PRIVATE
BRANDS AND ITS EVOLUTION
Joe McKie, Vice President, Private Brands
Food Marketing Institute
AGENDA
1. Provide a brief description of FMI
2. Share FMI’s private brands efforts
3. Give a high-level view of the evolution
of our industry and private brands
4. Demonstrate what’s next for private
brands
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THE ASSOCIATION
FMI conducts programs in
public affairs, food safety,
research, education and
industry relations on behalf
of its nearly 1,250 food retail
and wholesale member
companies in the U.S. and
around the world.
More than
25,000
retail food
stores
Regional
firms
$650
billion
330
associate members
that include retail
supplier
partners
combined annual
sales volume
260
Independent
operations
companies from
more than
65
countries
FMI Members Include…
Multi-store
chains
Nearly
22,000
pharmacies
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FMI SERVES AS THE
VOICE OF FOOD RETAIL
Information
Services and
Business
Intelligence
Government
Relations
Advocacy
Health and
Wellness
Promotion
Industry
Attractiveness
and
Awareness
Industry
Networking
and
Collaboration
Communications
Resources
and Support
Food
Safety and
Defense
Industry and
Consumer
Research
Educational
Conferences
and
eLearning
Platforms
Social,
Environmental
and
Sustainability
Advancement
Private
Brands
FMI
Foundation
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TOTAL STORE COLLABORATION
Asset Protection
Fresh Foods
Engagement in the areas
of loss prevention, risk
management, workplace
safety, crisis
management,
technology, and overall
asset protection
Emphasis on perishables
and offer center-store
assortments that differ
from those of traditional
retailers—especially in
the areas of ethnic,
natural and organic
Private Brands
Global forum to
exchange ideas and
information on future
trends, current
techniques and best
practices to strengthen
the performance of the
Private Brands industry
Supply Chain
Technology
Focus on logistics,
transportation,
distribution, warehousing,
supply & demand
planning, forecasting,
purchasing and
technology across the
entire supply chain
Approaches to mobility,
payments, data security,
cloud computing, in-store
innovation and social
commerce
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FMI PRIVATE BRANDS GROUP
•Provides leadership and advocacy
•Supports a global forum to exchange ideas – knowledge
and education
•Promotes collaboration on non-competitive industry issues
•Acts as a platform, supporting strategic versus
transactional collaboration between retailer brand owners,
suppliers and trading partners
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GROCERY INDUSTRY AND ITS
EVOLUTION
The Evolution
Of Terminology
Private Brands
Generic
Private Label
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GROCERY INDUSTRY AND ITS
EVOLUTION
Today’s Food Retail Landscape Suggests: Competition for
wallet is broader and more aggressive
77%
growth in
capacity
1995-2012
38%
growth in
sales
Source: Food Retailing 2013: Tomorrow's Trends Delivered Today
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GROCERY INDUSTRY AND ITS
EVOLUTION
Today’s Food Retail Landscape Suggests: Consumers
are in charge today
Shoppers adopted new “value seeking” habits during
the recession, many of which they plan to maintain:
• 64 percent of customers indicated they’ve always been
comfortable with private brands.
• 78 percent of those surveyed said they will buy private brands
moving forward.
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Source: U.S. Grocery Shopper Trends 2012
GROCERY INDUSTRY AND ITS
EVOLUTION
Today’s Food Retail Landscape Suggests: Communications to
consumers is more complex, yet more personal
Out of 1,500 Shoppers:
• 68 percent said their smartphone is likely to become an integral part of their
shopping experience
• 38 percent have used it in the last month to compare prices while shopping
• 32 percent reported reading online product reviews
• 22 percent said they used their smartphone to purchase products
Source: Booz & Company 2013 Consumer Trends Survey;
Booz & Company analysis; Nielsen analysis 10
GROCERY INDUSTRY AND ITS
EVOLUTION
Today’s Food Retail Landscape Suggests: Brands that connect
emotionally, providing relevant solutions to customers, will win
Private Brands can make and
are making that connection…
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GROWTH AND ACCEPTANCE OF
PRIVATE BRANDS
Over the past 5
years, Private
Brand sales are
up 21% and CPG
brands are up
only 3%
50% of
consumers say
they are more
aware of PB
today than they
were a year ago
38% of
consumers say
Private Brands
are better
8 out of 10
consumers say
Private Brands
are equal or
better than CPG
brands
1/3 of
consumers say
they are buying
more PB than a
year ago
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Sources: Nielsen/PLMA , GfK/Roper, Ralcorp, Supermarket News
TRENDS AND CRITICAL ISSUES
Process is Critical
Evolve Private
Brands as a
Differentiating
Strategy Regardless of
Format
Engage your
Associates
Innovate to be
Different,
Better &
Relevant
Ensure Food
Safety is a
Priority
Optimize
Supply Chain
Educate your
Consumers
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FMI’S PRIVATE BRAND RESOURCE
Contact me: 202-220-0719
jmckie@fmi.org
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