Rising inflation is driving significant shifts in consumer behavior. One of the most notable trends in the Consumer Packaged Goods (CPG) industry is the increasing preference for private-label products over mainstream brands. This shift is not merely due to the lower prices of private-label goods but also because consumers perceive greater value in terms of packaging sizes and the quantity they receive for their dollar. 

Understanding the Shift in Consumer Interest to Private Label 

Value Beyond Price 

While cost savings are a primary factor, consumers are increasingly valuing the pack sizes and overall quantity offered by private-label brands. The perceived value—how much product they get for their money—is a crucial element in this trade-off. This indicates a deeper level of decision-making where consumers assess not just the price but the overall value proposition of products.  

One thing to note is that consumer purchasing habits have shifted toward healthier options compared to previous generations. A Food Business News article states that “as a result, consumers have turned their attention to fresh produce and products with functional benefits.”  

Economic Pressures 

The relentless rise of inflation has significantly tightened household budgets. Traditional grocery items, once staples in the weekly cart, are being scrutinized and often discarded in favor of more budget-friendly alternatives. This trend is causing mainstream brands to lose their foothold as consumers search for ways to stretch their dollars further – by switching to private-label products. 

Competitive Pricing 

Large grocers and retailers like Target, Amazon, Walgreens, and Walmart are proactively addressing this shift by being the first to reduce prices to stay competitive. These reductions are in response to seeing value-shoppers reduce their basket sizes in-store. This move is not just about retaining cost-conscious consumers but also about preserving market share in an increasingly price-sensitive environment. 


 Compounding the issue is the phenomenon of shrinkflation, where products become smaller while prices remain the same or even increase. This subtle change erodes consumer trust and drives them further towards private labels, which are often seen as more transparent and offering better value.  

Implications for Shoppers and CPG Brands 

The impacts on shoppers are multifaceted. On one hand, they benefit from lower prices and greater perceived value with private label products. On the other hand, the constant need to adapt to price changes and shrinking product sizes can lead to frustration and distrust in traditional brands. 

For CPG brands, these shifts present both challenges and opportunities. The key questions are: 

  • How will these changes impact shopper behavior in the long run? 
  • What strategies can CPG brands adopt to regain consumer trust and preference? 

Challenge: Grocers and retailers need to keep a pulse on ever-changing shopper sentiments and frustrations while evaluating unmet needs to better align product innovations with demand. 

The Role of Market Research in Navigating Economic Turbulence 

Given these dynamics, it is important for CPG brands to stay connected with their customers and deeply understand their evolving preferences and pain points. This is where a robust market research platform becomes indispensable. Insight communities and other advanced research tools enable brands to: 

  • Monitor Consumer Trends: Stay ahead of market shifts by continuously tracking consumer behavior and sentiment. This real-time insight helps brands adjust their strategies promptly to meet changing demands. 
  • Innovate and Adapt: Use data-driven insights to innovate product offerings and marketing strategies. Understanding the nuanced reasons behind the shift to private labels can help brands re-position their products more effectively. 
  • Enhance Value Proposition: Develop a compelling value proposition that goes beyond price. By leveraging insights from market research efforts, brands can offer value that resonates with the current economic climate, such as larger pack sizes, bundling offers, or products with added functional health benefits – like items fortified with vitamins, probiotics, or other health-enhancing ingredients, catering to the growing consumer interest in wellness and health. 
  • Build Trust: Engage directly with consumers to rebuild trust eroded by shrinkflation and price hikes. Transparent communication and customer-centric initiatives can help restore brand loyalty. 

In conclusion, the rise of private-label products amidst inflationary pressures is a significant trend that CPG brands cannot afford to ignore. With the right market research tools, brands can gain the insights needed to navigate these challenges and innovate for future growth. Understanding and adapting to consumer needs in these turbulent times will not only help brands survive but also thrive in the long term. 

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