Key Takeaways
- •U.S. private label sales reached $330 billion in 2025, representing 24% of units sold and 23% of dollar sales in the market measured by Circana.
- •Private label adoption now crosses income levels, with higher-income households buying store brands more frequently rather than treating them only as budget substitutes.
- •Retailers are developing private labels as differentiated brands with distinct products, positioning, packaging, and customer identities.
- •Private label growth is not uniform. Food and beverage, club retail, refrigerated products, and beverages are producing some of the strongest momentum.
- •CPG companies need to decide whether private label represents a competitive threat, a manufacturing opportunity, or a strategic growth path within specific retailers and categories.
Quick Links
- Why Private Label Growth Matters Now
- Trend 1: Private Label Has Moved Beyond the Budget Shopper
- Trend 2: Store Brands Are Becoming Destination Brands
- Trend 3: Retailers Are Building Unified Brand Ecosystems
- Trend 4: Growth Is Concentrating in Specific Channels and Categories
- What Private Label Growth Means for CPG Companies
- People Also Ask
- Frequently Asked Questions
Why Private Label Growth Matters Now
Private label is no longer a secondary assortment of generic alternatives placed beside the brands shoppers actually want.
According to Circana's 2026 private label research, U.S. private label sales reached $330 billion in 2025. Store brands represented 24% of units sold and 23% of dollar sales across the market included in Circana's analysis.
Food and beverage private labels captured a 24% value share within their aisles. Club retailers accounted for nearly half of private brand growth.
Those numbers point to a larger change in shopper behavior. Consumers are no longer choosing private label only when they cannot afford the national brand. They are increasingly choosing it because the product fits their tastes, dietary needs, identity, or perception of value.
Retailers have responded by treating private label as a strategic growth engine. They are investing in trend-driven products, distinct brand identities, more sophisticated packaging, premium tiers, and exclusive assortments that shoppers cannot find elsewhere.
For retailers, private label can increase differentiation and loyalty while creating greater control over assortment and economics. For national brands, private label introduces a more credible competitor. For manufacturers, it creates a potential growth channel with different commercial, operational, and relationship requirements.
Trend 1: Private Label Has Moved Beyond the Budget Shopper
Price remains an important reason shoppers consider private label, but income no longer predicts adoption as clearly as it once did.
An Alvarez & Marsal consumer survey reported by Grocery Dive found that more than 82% of shoppers with household incomes above $100,000 had increased how often they purchased private label products. Just over half of respondents in that income group said they bought private label groceries very often, compared with 42% of lower-income respondents.
That is not traditional trade-down behavior. It is a reassessment of what makes a product worth paying more for.
Higher-income consumers may still spend more overall, but they are increasingly selective about where the national brand premium feels justified. If the store brand delivers comparable quality, better ingredients, more relevant features, or a stronger price-value equation, brand familiarity alone may not be enough to protect the sale.
This does not mean shoppers have stopped caring about brands. It means private label has become one of the brands they consider.
National brands therefore need a clearer answer to a difficult question: What value does this product provide that the retailer's own brand cannot easily reproduce?
Q: Is private label growth primarily being driven by inflation?
A: No. Economic pressure accelerated trial, but continued adoption increasingly depends on product quality, relevance, availability, and trust. Price may earn the first purchase, but the product experience determines whether the shopper returns.
Trend 2: Store Brands Are Becoming Destination Brands
The old private label model followed the national brand. The new model often starts with an unmet shopper need, emerging trend, or assortment gap.
Walmart's new women's fashion brand Scenario illustrates the shift. The 280-piece collection extends across apparel, shoes, jewelry, handbags, and accessories, with a defined modern bohemian identity and most products priced below $25.
Scenario is not positioned as the cheaper version of another label. It is designed as a coherent brand for a specific customer and aesthetic.
Walmart has applied a similar philosophy to food through bettergoods, which focuses on chef-inspired foods, plant-based options, dietary lifestyles, and accessible culinary experiences. The point is not simply to undercut national brands. It is to give customers a reason to visit Walmart for products they cannot purchase somewhere else.
This changes the competitive standard for private label. Successful retailer-owned brands increasingly require:
- A defined customer and occasion.
- A distinct reason to exist.
- Products that respond to trends or unmet needs.
- Packaging that communicates quality and relevance.
- Pricing that reinforces value without making low price the entire identity.
- An innovation pipeline that keeps the assortment current.
Private label is becoming less about substitution and more about differentiation.
Trend 3: Retailers Are Building Unified Brand Ecosystems
As retailers invest in private label, they also want shoppers to recognize who deserves credit for the experience.
More than 90% of ALDI's products are private label, but the retailer found that shoppers did not always connect individual brands with ALDI. In response, ALDI announced its largest packaging refresh to date.
ALDI-exclusive products will either carry the ALDI name or an “an ALDI Original” endorsement. Established brands such as Clancy's, Simply Nature, and Specially Selected will retain their identities while becoming more visibly connected to the retailer.
This is more than a packaging update. It is a brand architecture decision.
The endorsement transfers trust between the retailer and its products. A positive experience with one ALDI Original can strengthen confidence in another product elsewhere in the store. Over time, the retailer's full private label portfolio can function as a connected ecosystem rather than a collection of unrelated labels.
Retailers are effectively turning the store itself into the master brand. For manufacturers, that raises the standard. The product must deliver on its individual promise while also reinforcing the retailer's broader value proposition.
Trend 4: Growth Is Concentrating in Specific Channels and Categories
The headline numbers are strong, but they do not mean every retailer, category, or private label proposition will grow equally.
Circana reported that club retail accounted for 47% of private brand growth, while mass retailers and grocery contributed another 25% and 21%, respectively. Food and beverage private labels held a 24% value share, but nonfood private labels held a smaller 18% dollar share.
Recent category momentum has also been particularly strong in beverages and refrigerated products.
That matters because “pursue private label” is not a strategy. A brand or manufacturer still needs to identify:
- The retailer where the opportunity exists.
- The category or subcategory with meaningful white space.
- The shopper need the assortment does not currently meet.
- The retailer's desired price and margin architecture.
- The operational capabilities required to deliver consistently.
- The reason the retailer should select this product instead of another supplier's.
Club retail adds another layer of complexity. A private label opportunity at Sam's Club may require different pack sizes, price architecture, inventory commitments, product economics, and supply-chain capabilities than an equivalent opportunity in grocery or mass retail.
Private label growth creates more opportunities, but it also creates more competition for those opportunities.
Q: Does strong private label growth mean every manufacturer should enter the market?
A: No. Private label can produce meaningful volume, but it can also require compressed margins, retailer-specific development, significant inventory commitments, and operational flexibility. The opportunity must fit the manufacturer's economics and capabilities.
What Private Label Growth Means for CPG Companies
Private label growth affects different CPG companies in different ways.
For National Brands
Private label should be treated as a strategic competitor, not simply a lower-priced product.
Brands need to identify where their differentiation is defensible and where it is vulnerable. Innovation, intellectual property, product performance, emotional relevance, community, convenience, or distinctive ingredients may support a premium. Familiarity alone is becoming a weaker defense.
The response should not automatically be more promotions. Frequent discounting can narrow the price gap temporarily while weakening the premium position the brand needs to protect.
For Private Label Manufacturers
The commercial pitch must go beyond manufacturing capacity.
Retailers increasingly want partners that understand the category, customer, competitive assortment, innovation pipeline, packaging requirements, margin targets, and operational consequences of the program.
The strongest supplier is not always the company that can produce the item at the lowest cost. It is often the company that can help the retailer build a more relevant, differentiated, and reliable private label business.
For Brands Considering a Hybrid Strategy
A company may operate its own brands while manufacturing private label products for retailers. That can increase facility utilization, revenue, retailer access, and category knowledge.
It can also create channel conflict, capacity constraints, intellectual-property questions, and tension between branded and retailer-owned priorities. The company needs clear boundaries around product differentiation, formulas, pricing, capacity allocation, retailer exclusivity, and the information shared across the business.
A private label opportunity can be large and still be wrong for the business. The decision should be based on sustainable economics and retailer fit, not projected revenue alone.
People Also Ask
What is driving private label growth in the United States?
Private label growth is being driven by value, improving product quality, retailer investment, higher-income adoption, exclusive assortments, and stronger brand identities. Economic pressure encouraged trial, but innovation and trust are helping convert that trial into repeat purchasing.
Are private label products the same as generic products?
No. Generic products usually compete primarily on price and basic function. Modern private labels may have distinct positioning, packaging, product innovation, premium tiers, and identities that compete directly with national brands.
Why do retailers invest in private label?
Private label can help retailers differentiate their assortments, improve customer loyalty, respond to trends, control product positioning, and influence category economics. Exclusive products also give shoppers a reason to return to that retailer.
Is private label more important in club retail?
Club retail is currently a major source of private label growth. Circana reported that club channels accounted for nearly half of recent U.S. private brand growth, but succeeding in club requires the right pack architecture, economics, inventory capacity, and member value proposition.
Frequently Asked Questions
What are the most important private label trends for CPG companies?
The most important private label trends include adoption across income levels, premiumization, retailer-owned brand ecosystems, exclusive innovation, and concentrated growth in club, food and beverage, refrigerated, and beverage categories.
How large is the U.S. private label market?
Circana reported that U.S. private label sales reached $330 billion in 2025. Private label represented 24% of units and 23% of dollar sales across the market measured in its analysis.
How should national brands respond to private label growth?
National brands should identify where their price premium is genuinely supported by product performance, innovation, emotional relevance, convenience, or trust. They should avoid relying only on familiarity or promotions to defend market share.
What makes a strong private label strategy?
A strong private label strategy begins with a specific retailer, customer need, category opportunity, and economic model. It also accounts for product differentiation, brand architecture, innovation, supply chain, compliance, replenishment, and long-term assortment development.
What should a manufacturer consider before accepting a private label opportunity?
Manufacturers should evaluate margin, capacity, retailer requirements, forecast risk, packaging investment, exclusivity, intellectual property, operational complexity, and potential conflicts with their branded portfolio. Large projected volume does not automatically make the opportunity profitable or strategically sound.
Private Label Growth Requires a Retailer-Specific Strategy
Private label is rising because it now delivers more than a lower price. Retailers are using owned brands to introduce trends, build loyalty, differentiate their assortments, and serve customer needs that national brands may have overlooked.
That creates meaningful opportunity for CPG manufacturers, but authorization is only the beginning. Sustainable private label growth still depends on the right retailer fit, product strategy, economics, operations, and execution. It also relies on having a retail commerce partner who can help you navigate private label on the individual retailer level.
New Nexus Group brings strategic depth across private label, Walmart, Sam's Club, category management, eCommerce, analytics, and retail execution. If you are evaluating where private label fits within your growth strategy, start a conversation with us.