<p style="text-align:center;"><em>Private brands in the grocery industry are experiencing significant growth, evolving from budget alternatives to strategic assets that drive customer loyalty and distinguish retailers. </em></p><img src="https://www.fmi.org/images/default-source/blog-images/power-of-private-brands-2025-industry-sm.tmb-large-350-.jpg?Culture=en&sfvrsn=822edc11_2" style="float:right;margin-top:10px;margin-bottom:10px;margin-left:15px;" class="-align-right" alt="Man in a grocery store." sf-size="100" /><p>By: Tom Cosgrove, Director, Industry Relations, FMI</p><p>As the grocery industry changes, private brands have moved beyond being just a budget-friendly option — they’re now a key driver of customer loyalty and a way for retailers to stand out. Private Brands have seen lots of growth in recent years and there are plenty of reasons for optimism due to powerful innovation and positive consumer response. </p><p>I was pleased to see executives showing more confidence based on their feedback for FMI’s latest <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-private-brands-2025-industry">Power of Private Brands</a> industry research.</p><p>Almost half of retailer respondents in this year’s survey said they are well along in leveraging private brands as a differentiator, up from slightly more than a third last year. Retailers were asked, "How far along are you in private brand development as a key point of differentiation for your shoppers?" A notably larger share — 47% compared to 36% last year — said they are well along in development.</p><p>It’s good to see private brand executives relaying more confidence, so I dug deeper into the research findings to learn more about the reasons and identify any possible clouds on the horizon.</p><h5>Bullish Share Outlook</h5><p>The retailers’ confidence lines up with their upbeat business plans. They anticipate further building momentum in private brand dollar share in the coming two years. Their goal for this activity is to reach a share average of 25.6%. </p><h5>Plans to Increase Investments </h5><p>Eighty-six percent of the industry, including retailers and manufacturers, plans to moderately or significantly increase private brand investments in the next two years. The reason for the strong commitment is clear. Almost all industry respondents in this year’s survey said private brands are extremely or very important to their organizations. </p><h5>Pursuing Growth Strategies</h5><p>Private brand organizations are taking additional steps to help ensure the momentum continues. </p><ul><li><strong>Building online assortments: </strong>Retailers are advancing their share of private brand items available online, which grew to about 85% in this year’s findings.</li><li><strong>Leveraging a range of promotions: </strong>Retailers are tapping into in-store and online promotional strategies that run the gamut from traditional to emerging approaches.</li><li><strong>Enhancing shopper loyalty: </strong>Companies are emphasizing both in-store and online marketing to meet shoppers where they are.</li></ul><h5>A Few Clouds on the Horizon </h5><p>Positive momentum is not guaranteed because the industry isn’t in control of many factors. For example, the industry needs to keep enhancing private brand supply capabilities and finding new sources in the face of uncertainties that include shifting trade policies. </p><p>The industry also needs to improve trading partner alignment. This year’s research found private brand retailers and manufacturers relatively far apart on perspectives about the importance of innovation and the current levels of innovation in the industry. </p><p>Companies also need to press ahead on providing value and improving their understanding of how shoppers are defining value beyond just price. </p><h5>Making Progress on Private Brand Journeys </h5><p>I hope you will download and read <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-private-brands-2025-industry">the industry private brands report</a> to get more insights. This report follows on a <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-private-brands-2025-consumer-trends">consumer-focused FMI private brands report</a> unveiled earlier this year. </p><p>FMI’s ongoing research will continue to shed light on industry strategies and consumer insights, so that retailers and suppliers have robust resources to help drive progress in their private brands journeys. </p><p><a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-private-brands-2025-industry" class="button">Download the Report</a></p>
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