Innovation Spotlight - 5 Learnings from the 2023 PLMA Conference

This year's PLMA conference was held in Donald E. Stephens Convention Center Chicago and featured exhibitors in Food, Beverage, kitchenware and Home & health. Private Label is rapidly expanding into a $230 billion market, diversifying into numerous new categories - spreading across various channels and virtual platforms, transforming into a potent retail instrument. This progression is boosting customer loyalty and notably fortifying the financial outcomes for businesses. Last year, store brands contributed to almost 30% of the total new revenue in the U.S. retail sector and primary reasons shoppers consistently choose store brands are their quality, innovation, and value proposition.

Here are 5 key takeaways from this years PLMA conference:

Bigger & Better - This year's show is 20% bigger than last, adding 435 booths, for a record total of 2,750, per PLMA. Non-food exhibitors grew by 40%. Anthony Aloia of PLMA labels this growth 'phenomenal', reflecting the private label industry's rise to $230 billion and post-pandemic trends.

Category Expansion - In a strategic move, PLMA has expanded the show's scope, introducing new sections. This year, there were dedicated areas for kitchenware/houseware, wine/spirits, and beauty/cosmetics. 

Going Global - Aloia notes that this year, 45% of exhibitors are international suppliers, organized into country pavilions. Notably, Eastern European and Australian companies are upping their presence to diversify their trading partners. Also interesting to note new participants from Columbia, Peru, Chile, and Brazil.

New Products - This year's show highlighted 400-600 newly launched products in the New Product Expo, carefully chosen by the PLMA committee. Additionally, a unique aspect of this year's PLMA show is the "idea supermarket" section featuring gondola displays presenting a variety of retailer private label programs from across the globe in order to give buyers a glimpse into what their competitors are doing.

Foodservice Insights - Ken Harris, Managing Partner at Cadent Consulting Group mentioned 3 key insights focused on consumers, retailers, and environment:

1) Shoppers are increasingly favorable towards private label and this trend will only continue.
2) Manufacturers will need to thoughtfully co-develop retail media programs and insist on post-mortems
3) Sustainability, Labor, AI - these issues converge on retailers and manufacturers will need to lead or be left behind.

Key Takeaways

The current economic landscape, marked by rising food costs and increased consumer debt, is pushing private label growth at a record pace. Within grocery, private-label foods and beverages have expanded to a 20.6% share of U.S. grocery dollars from 18.7% before the pandemic, the market research firm Circana recently told the New York Times. Given the rise in private label, FMCG players must increasingly focus on in-house innovation and differentiation, showcasing their key benefits, attributes and value to consumers. In the foodservice space, as we witness an increasing number of Quick Service Restaurant (QSR) franchisees facing financial challenges, as highlighted in a recent report from Fast Company, may lead to a strategic pivot away from higher-priced branded products towards more cost-effective, unbranded private label alternatives (e.g. condiments and other offerings) through affordable distributor brands. 

The 2023 PLMA conference highlighted the private label sector is not just growing, it's thriving and innovating in ways that resonate deeply with consumers and retailers alike. From the expansion of the show itself to the global embrace of diverse markets and the spotlight on new, exciting products, the conference has set a new benchmark in the retail industry. These developments, coupled with insightful observations from industry leaders, underscore the dynamic evolution of private labels and their increasingly pivotal role in shaping consumer preferences and the future of retail.