How Food Retailers Can Build Their Brands with Healthier Own-Label Ranges


The perception or image of private-label brands has evolved — from being seen as a cheaper or lower-quality alternative to now being viewed as credible products, even outperforming national brands. One in four products sold in the U.S. is now private-label, and a new high for private-label brands was reached in 2022, with sales across retail channels reaching $228.6 billion.

And they’re continuing to grow in popularity – in the first three months of 2023, private labels saw a 10.3% increase in sales, almost twice the gain of national brands. With this growth, more and more private-label brands are diversifying and expanding their portfolios.

A particular area of focus is within the health and wellness sector, with around 50% of consumers now saying that wellness is a top priority in their lives. Everyone has their own perception of wellness and makes food choices according to their individual goals and desires. Recently, many have committed to clean eating and, as a result, the demand for organic food has more than doubled over the last 10 years, with sales reaching $62 billion in 2020.

People are also adopting new diets: plant-based eating has increased, as well as diet trends such as Keto, Paleo, Mediterranean and Whole30. And with these trends come different opportunities for private-label brands. Some are already starting to offer products that accommodate certain diets, such as Kirkland Signature’s Keto-certified snack mix. Other private-label brands include mentions, and some have symbols, signalling these diet trends on their packaging. However, there are other, more impactful steps brands can take to grow their market share across the healthy eating and wellness sector.


The Opportunity for Healthy Private-Label Ranges

While we have seen the offerings of private-label brands evolve, most need to catch up from a branding and marketing perspective. Financial concerns are front of mind for many shoppers and brands are acknowledging this through their own-label ranges.

However, low-cost cues no longer need to be the center of gravity for private-label food brands. People now know that private label offers more competitive pricing, so brands no longer have to only adopt white or neutral packaging to signal value. It fails to catch the eye of shoppers, and prompts them to focus solely on the price of the product.

This contrasts with what we are seeing in other markets, like the UK, where there is boldness and style to their own-label ranges. Marks and Spencer’s is a great example of a company that knows how to create powerful own-label brands. For example, its plant-based private-label brand, Plant Kitchen, has distinctive branding and packaging that stays in line with the high-quality look of the brand, still at an own-label price point. It clearly tells a story and, in many cases, is even more considered than its name-brand competitors.

U.S. food retailers are beginning to make progress within this area. Target has stepped up with its private-label food brand Good and Gather. Its decision to invest and double down on its brand, folding in Archer Farms and Simply Balanced, created a bigger, more formidable opponent to the national brands. And importantly, this strategy clearly communicates Target’s position on healthier foods.

365 by Whole Foods is another own-label brand that has committed to being good for the environment and good for customers. Since being acquired by Amazon, the brand has increased its list of banned ingredients, which includes high-fructose corn syrup and certain meats containing antibiotics, as well as other enhanced products.

As the popularity and proliferation of healthier options grows, there are still opportunities for retailers within this area. Retailers should be having fun with their healthy private-label ranges and break out of the standard category conventions.

They need to take a lesson from some of the newer healthy food brands. High-protein, low-carb brand Magic Spoon is a great example. It created a colorful, illustration-led brand that feels like a modern version of children’s cereal and is distinctive, while at the same time the nutritional value of its products is clear and recognizable. And what a success it has been, going from an online D2C brand to being carried at over 6,000 stores.

National Brands have Created Healthy Competition

When it came to healthier foods, or those centered around wellness, it used to be the smaller, independent brands that were biting hard at the heels of private-label brands within the same category. However, now the larger CPG companies have entered the game to deliver exactly what consumers are looking for.

Who knew such a strategy would work for them? Many have expedited this by means of the acquisition of respected brands – General Mills bought organic food brand Cascadian Farm as well as all-natural brand Annie’s, Mars acquired Kind, and PepsiCo bought baked fruit and vegetable snacks brand, Bare.

As national and global brands increase their healthy offering, own-label brands need to step up – through innovation and taking the lead on trends instead of following, and making marketing and branding more of a priority to continue building credibility, stand out and ultimately, lead.

Delivering Healthy Meals

My own, recent move in my wellness journey has been joining a meal delivery service. BistroMD, a healthy prepared meal delivery service, has always served me well in the past, but there are many newer brands that have emerged such as Factor, Trifecta Nutrition or Marley Spoon, which delivers meal kits that can be prepared in 30-minute recipes. And others are catering to healthy eating trends, such as Green Chef, which provides paleo and keto options, or Sakara Life, a plant-based healthy and organic meal delivery service.

It is just a matter of time before the national brand parents start investing in this area. If retailers implement just one new element to their healthy own-label ranges in 2024, they should consider adding one of the many meal delivery companies to their portfolio, especially since many have the advantage of having kitchens at their facilities.

Retailers need to stay on top of the latest health and wellness trends, make moves to lead rather than follow and, at the same time, move away from category clichés. If they don’t, they will miss their chance, others will step in for them, and the opportunity in healthy, wellness-centered foods will pass them by.

As President – USA, Jenn Szekely leads Coley Porter Bell’s North American business and select clients. She brings more than 20 years of B2C and B2B branding and marketing experience across a variety of industries — from retail to rockets. Szekely is passionate about the intersection of brand and business strategy and the power of brands to drive growth and employee engagement as well as the role of brand architecture and brand governance.

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