NielsenIQ (NIQ) has released its latest report, Finding Harmony on the Shelf: 2025 Global Outlook on Private Label & Branded Products, providing valuable insights into global consumer preferences and the driving forces behind the growing demand for private labels and branded products. This report highlights essential trends for retailers and Consumer Packaged Goods (CPG) manufacturers to understand and adapt to in order to navigate the increasingly competitive retail environment.

Trends Shaping Consumer Preferences

Private Label Growth and Changing Perceptions

The report reveals that 53% of global consumers are purchasing more private label products, driven by a shift in consumer perceptions about the quality and value of these alternatives to branded products. Notably, 68% of respondents now see private labels as a good alternative to branded products, and 69% believe private labels offer good value. This marks a significant shift from past stigmas, making private labels a compelling choice for cost-conscious consumers.

Resurgence of Top Global Brands

While private labels are growing, the top 10 global brands also saw a resurgence in sales momentum in 2024, proving that both private label and branded products have strong potential in today's market. The top global brands experienced a 4.8% increase in sales, slightly outpacing private labels, which saw a 4.3% increase year-on-year.

Regional Differences

Consumer preferences are regionally diverse. For example, consumers in Egypt are more likely to prefer private labels, while those in South Korea are less likely to view private labels as acceptable substitutes for branded products. These regional nuances underscore the importance of tailored strategies for both private label and branded goods.

Strategies for Growth: Harmonizing Private Label & Branded Products

Private Label Strategies for Success

• Brand Halo Effect: Proximity to well-known brands can enhance the appeal of private labels. Consumers tend to trust private labels more when they perceive them as high-quality, which can boost sales.

• Price Anchoring: Branded products often carry a 26% premium over private labels, which can motivate consumers to opt for the value-driven choice of private labels, particularly when they offer comparable quality.

Branded Products Strategies for Success

• Increased Footfall: Many consumers trust brands more when they are associated with reputable retailers. NIQ data shows that top retailers in the UK have successfully driven growth in both branded and private label products.

• Market Expansion: In specific categories like fresh coffee and buffets, private labels have accounted for significant growth. These opportunities can be leveraged by large brands to expand their market presence, focusing on areas where private labels are increasing category adoption.

Insights for Retailers and Manufacturers

• Collaboration for Growth: Both manufacturers and retailers must find creative ways to collaborate, aligning their efforts to capture the shifting consumer attention. Working together on co-promotion strategies can drive overall category growth and expand consumer bases for both private label and branded products.

• Consumer Sentiment: Positive consumer sentiment, particularly the growing appreciation of private labels as high-quality, affordable alternatives, positions the retail sector for significant opportunities. Retailers are encouraged to strike a balance between premium-branded products and private labels to optimize their product offerings and meet evolving consumer demands.

The NielsenIQ report underscores the importance of adaptation and collaboration for both retailers and manufacturers in the face of evolving consumer preferences. As global consumers continue to evolve their shopping habits and navigate economic uncertainties, the ability to offer a diverse mix of high-quality private label and branded products will be key to capturing consumer attention and driving sales. The outlook for both product categories remains strong, provided that stakeholders embrace innovation and strategically position their offerings to meet the demands of a rapidly changing retail landscape.