#173 - Global Insights: The Rise of CPG Private Brands Across Regions

Globally, licensing is a $365 billion business. The U.S. comprises about 60% of the market. Kristen McLean, senior executive director, The Circana Entertainment Knowledge Group, takes listeners into the world of licensing. Hear insight into the elements of successful licensing deals and what to consider when partnering with another brand. Highlights: There are four main types of licensing: character, personality or lifestyle, co-branded, and limited-time offer (LTO). 11% of licensing involves food, both CPG and foodservice. Successful licensing should include brands that overlap in appeal, but also work to expand the audience for both brands. Before diving into licensing, validation is critical. Consumer research can help ensure a licensing idea resonates with the target audience.

As a share of the total CPG/FMCG market, private brands vary across major global regions. In the EU, private labels account for nearly 39% of total market value and 47% of unit sales, while in the U.S., they represent 22% of dollar sales and 24% of unit sales. Sally Lyons Wyatt and Ananda Roy talk about retailer investments for private brands, including being category-focused, consumer-obsessed, innovative and of high quality.  Highlights include:  Successful retailers treat private labels like brands, cross-promoting them with name brand products and partnering with notable chefs on product development.  In EMEA, private brands have pulled back price promotional efforts and instead are focusing on promoting premium quality at a competitive price to name brands. While the U.S. lags other global regions in overall private label share, some categories, notably in the fresh perimeter departments, have a high share of total CPG sales.  The rise of the term “zero consumer” in Europe describes consumers who seek better value but show zero loyalty to any retailer or established brand. 

Inspired by their recent Top Trends in Fresh webinar, Jonna Parker, team lead, Circana’s Fresh Foods group, and Kelly Krumholz, perimeter client insights consultant, provide a “refresh” on trends and opportunities impacting fresh grocery departments. While opportunities for growth continue to take root (GLP-1s, we’re talking about you!), headwinds – including being out-marketed by center store – temper growth. Tune in to learn more.  Highlights: Well over half – 56% – of all trips to retail stores for food and beverage are quick trips, which usually involve only one or two departments.  Health-minded consumers account for about one-third of overall food and beverage spending. Fresh departments, especially produce and deli, are crucial for consumers who prioritize healthier eating and transparency in food sourcing. Fresh foods could benefit from suggestive selling and marketing – especially via social channels – based on consumer motivations and occasions. Fresh departments should capitalize on weekend dinners, which tend to include more scratch cooking.

Dive into the cutting-edge innovations and trends from CES 2025 with Circana’s tech analysts Paul Gagnon, Ben Arnold, and Mike Crosby. This episode explores the transformative impact of artificial intelligence and more on consumer and B2B electronics, the evolution of smart home technology, and the future of wearable devices. Technology is reshaping not just consumer experiences, but also manufacturing, go-to-market strategies, and retail.  Key Highlights: AI is being incorporated into everyday products like smartphones, PCs, and TVs, enhancing the user experience through features like picture and sound quality optimization. But one watchout is that innovation needs to remain focused on tangible benefits for the end-user. Another pain point is managing consumer concerns with privacy.  Smart home devices, including smart doorbells and security cameras with AI capabilities, appliances and robotic vacuums are seeing enhanced functionality.  The next generation of smart glasses will drive new use cases and applications in personal health and augmented reality.  Retailers have a significant influence on the development and go-to-market strategies of tech products, particularly in the TV industry.

The impact of GLP-1 (glucagon-like peptide 1) usage for weight loss on the CPG food and beverage, nonfood, and other industries is just beginning. It’s going to influence product innovation, store assortments, consumer engagement, and more. Sally Lyons Wyatt discusses groundbreaking research on GLP-1 use for weight loss, including how users shift their purchase habits while using the medication and after they stop taking it.  GLP-1 users generally purchase more than nonusers, with notable shifts in purchases among weight loss users. For example, categories like gum and breath mints help with a side effect of bad breath, while an uptick in tea purchases is tied to soothing an upset stomach. Categories such as frozen foods decreased in sales during usage of GLP-1s. Sales of recommended foods, including vegetables, eggs, and nuts, increased. The ripple effects of GLP-1 usage go far beyond CPG to include wearable technologies such as fitness trackers, apparel, beauty products, beverageware, and more.

Carbonated soft drinks and bottled water are the universally preferred beverages across generations. From there, nuances emerge that shed light on the life stage priorities of different cohorts. Similarly, differences in product choices are seen by household income level and even ethnicity. Tatiana Lopez Aranzazu, consumer and shopper insights consultant at Circana, discusses differences across demographic cohorts and uncovers opportunities for manufacturers and retailers.  Highlights:  Energy drinks are popular among most generations. But they are less relevant for boomers, who prioritize probiotic and low-sugar dairy drinks.  Functional beverages, particularly those delivering energy, weight control, and better-for-you attributes, are growing in popularity.  High-income households prefer beverages with protein and probiotic claims. Low-income households lean toward energy drinks.  Consumers are most likely to shop the grocery channel for most of the top beverage attributes. But mass and supercenters lead for immune defense claims, and club stores are the top channel for protein claims. 

While hydration is still key, consumers want more from their beverages. Sally Lyons Wyatt, Circana’s global executive vice president and chief advisor, consumer goods and foodservice insights, shares extensive beverage research on out-of-home and in-home trends across tap water, morning beverages, cocktails, and satiety beverages.  Highlights Consumers seek more personalization than ever, from flavoring tap water to interesting portable beverage containers. Marketers can see what consumers are turning to by watching book sales. Hint: Books on body cleansing and detoxing are trending.  In-home and out-of-home beverage trends are shifting. Consumers purchase portable beverage containers for out-of-home convenience. But they’re also purchasing specialty coffee makers, juicers, and smoothie makers to offset higher prices at foodservice.  Beverages deliver varying levels of nutrition, indulgence, satiety, and entertainment — with and without alcohol. The ripple effect of beverages goes well beyond what we’re drinking to how we’re consuming and where. Opportunities exist for marketers who consider new occasion moments, especially surrounding sports. 

Despite inflation, consumers are optimistic about their ability to spend a little more on gifts, foods, and beverages for upcoming holiday occasions. Sally Lyons Wyatt, Circana’s global executive vice president and chief advisor, consumer goods and foodservice insights, and Marshal Cohen, Circana’s chief retail officer, share their insights and observations for what’s in store (literally!) this holiday season.  Highlights:  Inflation has eased, but consumers still anticipate paying a little more for holiday groceries. Similarly, consumers expect to spend an average of 2% more on holiday gifts this year versus 2023.  Optimism is wrapped in practicality this year, with consumers willing to pay for needed or practical items. But they’ll also spend more to elevate experiences. Notably, consumers report they’re more likely to make impulse purchases and self-gift this year.  Retailers are ready for a positive gifting season. Black Friday is back, complete with doorbusters and retailer exclusives. And shoppers can expect a better in-store experience with deals and gift inspiration.  Shoppers of CPG and gen merch are focused on value, and retailers of all stripes will work to frame their offerings in terms of quality, price, and relevance to the shopper. 

For more than 30 years, Circana has conducted extensive audits of the food items found in America’s kitchens, from spice cabinets and pantries to refrigerators and freezers. Results from the 2024 audit reveal our kitchens have fewer items, pointing to our growing desire for convenience. Darren Seifer, industry advisor, consumer goods & foodservice insights at Circana, shares observations on changing behaviors and opportunities to meet consumer needs.  Highlights:  Consumers are keeping around 140 items in their kitchen, down from 160 in 2020.  There’s been an uptick in heat-and-eat solutions. Kitchen appliances such as air fryers and pod coffee makers are responding to the need for speed.  Conversely, there’s been a decline in food appliances like deep fryers or coffee grinders.  Manufacturers of CPG items and appliance makers have an opportunity to support the success of meals, with proper temperature cooking, simplified recipes, and products that deliver flavor and convenience. 

The outlook for fall and winter holidays is bright, even for CPG items experiencing persistent inflation. Consumers are willing to spend a little more to make the holidays special, but it’s up to retailers to facilitate this. Circana’s Jonna Parker and 2010 Analytics’ Anne-Marie Roerink discuss supporting holiday traditions and encouraging the adoption of new seasonal flavors. Highlights When holidays fall during the week, such as Halloween 2024 landing on a Thursday, retailers should encourage consumers to stretch the celebrations.  Provide ideas for full-on parties and quick, fun meals to feed kids before trick-or-treating.  Start holiday promotions early to encourage consumers to come back for a second or third purchase. Retailers can add to the excitement by playing up seasonal flavors beyond pumpkin and mint, such as pecan, cinnamon, maple, and more.  Beyond holidays, retailers should focus on special occasions and promote affordability and inspiration for leftovers, especially proteins.