National brands are being overtaken in new products by private brands in 2021

According to digital marketing and media company, Catalina, the price gap has narrowed in some categories over the past 2021.

Though new product introductions plummeted across the consumer goods sector with the onset of COVID-19, private label brands have managed to rebound in several categories, while national brands have continued to decline, this according to digital marketing and media firm Catalina.

A number of categories saw strong new product growth in 2021, Catalina noted. For example, new UPCs in ready-to-eat cereals rose 66% last year after falling 48% in 2020, compared with declines in national brands of 35% in 2021 and 53% in 2020. In cookies, on the other hand, own brands gained 60% in new product launches by 2021, this after seeing new UPCs plummet 66% in 2020, while national brand cookie product launches were down 22% in 2021 following a 57% drop in 2020.

The decline in product introductions of national brands in the last year, 28.5% from 2020 to 2021, outpaced that of private labels.

Dry cat food experienced a 44% decline in new private label products in 2020, but managed to recover with a 13% increase in 2021. However, national brands had less flow into the category over the same time periods, with new UPCs declining 5% in 2020 and 8% in 2021.

In general, retailers are trying to attract shoppers who may again turn to private labels, as they did during the early days of the pandemic, when a shortage of national brands prompted the trial. I anticipate that this could be a second opportunity for those retailers to effectively demonstrate the value of private label and convert shoppers into loyal private label buyers.

Phyllis Johnson, senior director of private-brand development at Catalina.

But even as private labels bolster quality and value in key categories, amid high grocery inflation, the price differential with national brands in some categories has declined, Johnson noted, citing the tissue and paper towel segments. In 2021, the average price across all package sizes for bath tissue was $5.25, up 31% from 2019. However, versus national brands, the price advantage of private-label bath tissue declined from 45% in 2019 to 30% last year, Catalina data indicated.

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