What’s contributing to the rise of private label, and what can brands learn from its success?
The dominance of brands is under serious threat: at a global level, private label has almost half of grocery volume share (45.7 percent) and is growing in volume at double the rate of brands (1.4 percent vs 0.7 percent).
Although private label share has dropped in some European markets, as brands fight back with promotions, Europe still leads the way for private label globally in 2025. This is followed by North America, which will be the fastest-growing region. Western Europe leads private label value share at over 40 percent, driven by discounters. Meanwhile, North America has emerged as a hub for private label innovation, with dollar growth outpacing national brands.
The evolution of private labels
Private labels were once seen by shoppers as a budget-friendly option - a compromise in quality for a lower price. Now they have evolved beyond an emblem of value into an increasingly attractive, brand-equivalent choice, and a strategic cornerstone for retailers and suppliers.
What’s driving this shift? A key change is retailers treating private label products as an extension of their brand identity and a lever for gaining a competitive edge through differentiation and distinct brand experiences. There are several private-label product trends which exemplify this strategic approach.
Staying on-trend
Private label suppliers and retailers are quickly adapting to emerging consumer trends, using their agility to outpace and out-diversify established brands. Examples include seasonal products, products inspired by other cultures, limited editions, and dupes (copies of popular branded products).
They are also using customer insights to inspire their innovations, and not just via in-store data. In Portugal, Sonae MC’s retailer Continente created Co-Lab, a research and development centre where customers blind-test new items against competitors and, through their feedback, help to develop and continually improve products.
Cross-collaboration
Retailers are creating distinctive and meaningful private label experiences for shoppers by partnering with established and trending brands, ranging from celebrity chefs and famous designers to major food brands and well-known charities.
Retailers are even collaborating with other stores. Faiprice’s Xtra VivoCity store in Singapore now hosts the first Lotte Mart Express outside Korea. The store-in-store concept gives local shoppers easy access to curated Korean products and cuisine, and demonstrates how partnerships can be leveraged to penetrate international markets.
Responsible shopping
As we are also seeing in brands, increasing consumer demand is driving retailers to create or update products with enhanced environmental and health credentials.
Examples we have seen are growing collections of plant-based food options, products with functional health benefits, healthier snacks, and more eco-friendly production and packaging.
In the Netherlands, Albert Heijn introduced 15 hybrid items which blend animal and plant-based ingredients across categories from dairy to meat products. These items are intentionally priced at or below their fully animal-based equivalents to encourage adoption for improved nutritional value and reduced CO2 emissions.
Beyond food
Retailers are also expanding their private label offerings into non-food categories, tailoring products to specific consumer needs. These include items which address different life stages, premium products at more accessible price points, back-to-school items, and healthier pet treats.
On the latter category, Aldi Australia has created Julius Treatz Doggy Dessert as a lower-cost alternative to more premium branded products.
A lesson in flexibility
There are, of course, various factors feeding the growing importance of private label. A main one is economic challenges changing shopper behaviour.
But one of the major threads in the success story of private labels is retailers demonstrating the flexibility and insight to seize the initiative, react to emerging trends, and adapt to the changing needs and preferences of shoppers.
Retailers have redefined private label. Brands must adapt and transform their offer, too, if they are to stay ahead of the competition.
For more information on the factors at play within private label, IGD has created a report entitled ‘Global private label trends 2025’. The highlights of the report can be found here.
By Sneha Haria, Insight Manager at IGD
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