Private label premiumisation – overview
- Private label growth accelerates as retailers invest in premiumisation
- Consumers increasingly view private label as credible branded alternatives
- Fifty-three percent buy more private label products than ever
- Snacking, fresh food, and beverages lead private label growth
- Premium private label intensifies competition for established food brands
Private label is gaining strength in food and beverage at a rate not seen in previous decades, and economic pressures aren’t the only catalyst for change.
The reputation of private label products has shifted significantly, as retailers invest in product innovation, premium ingredients and sophisticated branding, moving them beyond the traditional value-for-money positioning and into the premium space.
Premiumisation of private label
“Private label has evolved from being primarily a value-based alternative into a credible brand choice,” says Lauren Fernandes, VP of global content thought leadership at marketing research firm NIQ.
This evolution has not only been driven by consumers seeking affordability, but also by retailers’ efforts to elevate the quality, innovation and appeal of their own-label offerings. As a result, private label is increasingly competing on attributes traditionally associated with branded products, including taste, provenance, sustainability and premium positioning.
“Premium private labels compete with mainstream brands by offering consumers strong value without sacrificing quality,” says Fernandes.
Consequently, premium private-label products are uniquely positioned to attract both consumers trading up from mainstream products and those seeking premium experiences at a more attractive price point.
The growing success of premium own-label ranges highlights just how far consumer perceptions have shifted. In many categories, premium private label products are no longer viewed as substitutes for brands, but as sought-after choices.
Destination brands
“As retailers continue investing in product development and differentiation, premium private label is increasingly competing as a brand in its own right, helping drive stronger consumer adoption and loyalty,” says Fernandes.
And, it’s not just long-established premium private-label products gaining traction, new lines are being quickly adopted too. The success of ranges such as Marks & Spencer Collection, Waitrose No.1, Carrefour’s Reflets de France and Migros’ Sélection ranges illustrates this.
Once positioned as premium alternatives within retailers’ own portfolios, they’ve evolved into destination brands, often sitting alongside category leaders.
Their popularity demonstrates that shoppers are increasingly prepared to trust retailers to deliver indulgence, quality and innovation.
“Retailers have tested, iterated, developed, and marketed next-level private-label brands that are capturing the eyes and wallets of consumers.” says Fernandes.
Ending private-label stigma
“The stigma once associated with private label has largely disappeared,” says Fernandes. “Consumers today increasingly view private labels as legitimate purchase decisions rather than budget substitutes.”
In fact, 53% of global consumers say they’re buying more private-label products than ever before. That’s a powerful development and shows no signs of slowing, with many global consumers now viewing private labels as good value for money (69%), and a good alternative to name brands (68%).
Most importantly, 60% of global consumers say they’d buy more private-label products if a larger variety were available.
In other words, says Fernandes, “demand is high and ripe for further growth.”
Successful private-label sectors
While private label’s growth is industry wide, some sectors are proving more successful than others.
According to NIQ, global year-on-year sales increases have been strongest in snacking (+5.9%), fresh food (+5.0%), and beverages (+4.9%), underlining the growing appeal of own-label products across everyday staples and more indulgent categories.
The premiumisation opportunity is especially apparent in categories where consumers are willing to trade up, with data suggesting fresh food, and health and wellness, ranking among the categories most likely to attract premium spending.
But the rise of premium private label isn’t good news for everyone.
Branded challenge
The rise of premium private label is creating inevitable challenges for brands who no longer dominate supermarket aisles.
As retailers strengthen their own-label propositions, established brands face increasing pressure to justify premium pricing through continuous innovation, distinctive positioning and stronger consumer engagement.
And, in categories where quality perceptions between brands and private label are narrowing, competition is becoming increasingly intense.
What’s more, retailers hold a significant advantage over brands because they control the shopping environment itself. By determining product placement, shelf positioning and in-store visibility, retailers can give their own-label ranges prime locations, maximising consumer attention.
Premium private-label products, in particular, are increasingly being placed at eye level, featured in dedicated premium sections and highlighted through in-store marketing, helping to reinforce their quality credentials and elevate their perceived value.
This means retailers are not only shaping purchasing decisions but also actively influencing how shoppers perceive and engage with private label.
Private label vs brands
As consumer perceptions continue to evolve, the growth potential for private label remains strong. With more shoppers viewing retailer-owned products as credible, high-quality alternatives to brands, and many expressing a desire for greater choice, the category appears well positioned for further expansion.
For brands, however, the rise of private label, especially premium private label, presents a growing challenge. As the gap in quality, innovation and shopper appeal continues to narrow, brands will need to work harder to differentiate themselves and justify premium price points.
What is increasingly apparent is that private label is no longer competing solely on price. It’s competing on brand strength, forcing manufacturers and retailers to rethink how they win consumer loyalty.
