The Private Label Prospect

Private label price and quality can be used to draw shoppers into the deli.

Carol M. Bareuther

What do century-old Brooks Brothers suits and today’s supermarket deli have in common? Private label. First appearing in the 19th century in the clothing industry, private labels started as a way to offer consumers products with lower prices yet quality comparable to or better than name brands. The food industry followed clothing. Grocery chain A&P was the first to introduce private label by way of four private-brand teas, according to the article, “History Shows How Private Labels and Self-Preferencing Help Consumers,” published November 2022, by the Information Technology and Innovation Foundation, headquartered in Washington, DC. 

Fast forward, sales of private label products in U.S. supermarkets in 2021 were strongest in refrigerated foods at $40.4 billion, with consumers spending some $4.9 billion on prepared deli, according to Statista Inc., a New York-based online market and consumer data platform. 

What’s more, private-label deli prepared was one of the fastest growing private-label food categories in the 52 weeks ending Jan. 10, 2023, up 17.3% to $5.9 billion versus the year prior, based on IRI data as supplied by the New York-headquartered Private Label Manufacturers Association (PLMA). Private-label deli meat followed, up 10.3% to $1.7 billion and deli cheese grew 5.5% to 754.4 million.

Beyond the numbers, the availability of private labels is evident the minute you walk into the deli of the nation’s top retailers in the U.S. There’s Kroger’s Private Selection deli meats, Signature Café is Albertson’s deli foodservice brand, and Meijer’s Fresh from Meijer’s brand on rotisserie chicken, grab-and-go deli salads, dips, cheeses, pickles and more.


Private label products are those sold under a retailer’s brand, as defined by the PLMA. They are made either by large manufacturers who produce both private label and their own brands, small- to medium-sized makers who specialize in particular products or created by major retailers that have their own manufacturing plants.

“We do a lot of co-pack private label and have seen a 30% to 40% uptick in existing accounts in the past 18 months for our quality crackers and flatbreads, which are non-GMO, USDA organic, vegan and kosher-approved,” says James Anderko, vice president of sales and marketing for Venus Wafers, Inc., in Hingham, MA. 

Private label has enjoyed a one-two boost over the last three years. 

First, supply chain issues and shortages at the onset of the pandemic led many customers to buy private label, sometimes for the first time. A positive experience resulted in a buying choice that stuck. Across the supermarket, nearly all (99.7%) of U.S. households purchase store brand products, according to the Nov. 29, 2022-released report, Private Brands: Look Who’s Buying Now, by market research firms, IRI Inc. in Chicago, and the Port Washington, NY-based NPD Group, which merged last August.

Secondly, the current U.S. inflationary economy means consumers are watching their grocery spend. The Consumer Price Index (CPI) for food-at-home, i.e. purchased from a supermarket, was 12% higher in November 2022, than the same month in 2021, according to USDA Economic Research Service data, with a projected 3% to 4% CPI increase in at-home food purchases in 2023. Buying items that can be one-third percent less in price or more, yet similar or better quality than familiar brands, is a no-brainer for many. The cost savings come in the form of manufacturer’s now having to spend up to 20 cents on each dollar to advertise their own products, according to the PLMA.

“For manufacturers, selling private label streamlines the process for us,” says Ian Behm, president of Pine River Cheese Spread, in Newton, WI. “Once it’s produced and shipped, it’s out of our hands. All the promotional work, customer feedback, product damage, etc. is taken care of by the private label company.”

For consumers, Behm adds, “As the prices of groceries continue to rise, many consumers are selecting the store brand products. But that doesn’t mean they are sacrificing quality. Many grocery store chains are putting a lot of support behind their own labels. Stores are promoting their brand as the highest quality product, at the best price.” 

For deli operators, two big benefits of private label are offering a point of differentiation and loyalty to the retailer’s brand.

“Supermarket private brands offer a point of differentiation and a level of control over what they offer as their ‘value proposition’,” says Chris Carando, vice president of sales and marketing for Deli Brands of America, a Baltimore, MD-based division of Saval Foods Corp. “In a private brand, they can customize the spec and recipe to fit their needs and customer base’s demands.”

Private label brands can build consumer loyalty and pull customers into that supermarket location, Carando adds, as well as add to the retailer’s bottom line. 

Thirty-five percent of consumers frequently or always choose a retailer based on the selection of their store brand products, up 2%, from 2021, according to IRI’s Private Brands: Look Who’s Buying Now, report.

The only disadvantage is that deli operators need to provide an adequate lead time for their orders.

“In the private label space, manufacturers like us need to be flexible, nimble and efficient to deliver the requested products consistently and at an acceptable margin. Private label needs to be a true partnership between the manufacturer and the supermarket. This is a business relationship that must be earned through trust, frequent communication, service and consistency,” says Deli Brands of America’s Carando. 


Many major supermarkets as well as box stores, discount retailers and other grocers, offer almost any and every product under the store’s brand, from food to non-food. In the deli, total private brand dollar sales for deli-prepared foods, deli meat and deli cheese combined reached $8.3 billion in the year ending Jan. 10, 2023, based on IRI data as supplied by the PLMA. In other words, among these three categories, deli-prepared foods represent nearly three-fourths (70.6%) of sales, with meats less than one-quarter (20.4%), and deli cheese making up the remainder (9%.

“Retail requests for private label continues to grow, and one major reason is that deli operators seek a point of difference in the market. It could be a cool deli salad, for example, plant-based, that no one else sells. We offer 11 deli salads as well as 17 flavors of cream cheese in private label. Some retailers look for a few items, while others look for entire segments. Scoop and sell is often favored over pre-pack in private label, as it builds the retailers perceived equity with restaurant-quality foods,” says Carl Cappelli, senior vice president of sales and business development for Don’s Prepared Foods, in Schwenksville, PA.

Buffalo Chicken Salad, Maryland-Style Seafood Delight Salad and Pasta Parmesan Salad as well as Cranberry Cream Cheese, Honey Fig & Pistachio Cream Cheese, and Horseradish & Cheddar Cream Cheese are some of the distinctive flavors made by the company.

Roast beef, ham, turkey, pastrami, corned beef, salami and other core deli offerings that are equivalent in quality to the national brands are most prevalent in private label, according to Deli Brands of America’s Carando. “Supermarkets have limited shelf space in the deli cases. To justify the use of the space, private label items must be strong enough in margin, demand and quality to compete with the national brands in a way that consumers can see the value in front of them.”

Demand for ready-made entrées has increased due to the pandemic, Carando adds. As such, “portioned-prepared food products for meals-to-go or sold behind the glass will continue to grow. Supermarkets are seeing positive feedback from offering ready-to-reheat and simple ingredient proteins like meatloaf, short rib or pork loin. These offer consumers a value alternative to going out to dinner and yet another reason to visit the supermarket.”

Cheese spreads are having their moment and are becoming popular as a private label product line extension beyond blocks and shreds, says Pine River’s Behm. “Our standard award-winning flavors are the most requested – Sharp and Port Wine. We also have many requests for pimento in delis. It’s a cream cheese-based spread, which gives it a more dippable texture, and the Wisconsin Cheddar Cheese shreds give it a homemade look.”

As the labor market strengthens, grocery stores can offer more bulk options, Behm adds. “In other words, portion into containers, rather than offer pre-portioned options, and sell as weighed prices in the deli/specialty cheese sections. This has a more artisanal/handcrafted/gourmet look and can be marked at a higher price point.”

Many breads and crackers are sold in the deli. However, of note, is that private label supermarket bakery dollar sales reached $8.4 billion, up 12.3%, for the year ending Jan. 10, 2023, according to IRI report data.

“The nice balance for us is that our branded products allow us to experiment and show retailers what we can do. Then, we work with operators to create something that’s customized. For example, it may be a flatbread where the seasoning is in the dough as well as on top, providing more crunch, or using black sesame seeds or flaky salt rather than the regular,” says Venus Wafer’s Anderko.


For product categories that have multiple brand options, start to decrease the choices and offer a store brand and a couple of other brands that offer the best quality, suggests Pine River’s Behm. “This clears shelf space and makes shopping easier for the consumer.”

“Merchandising with an item that pairs well, for example, an artisanal cracker or bread from the store bakery, is always preferred. Making a serving suggestion to the shopper and making it easy for them to purchase both items at the same time, almost always results in selling more of both items,” adds Behm.

Some retailers are creating signature cheese boards in-store with private-label products such as cheese and artisan crackers, according to Venus Wafer’s Anderko.

“We always recommend promoting around an event like the Super Bowl or Oscars Party, or holiday, which grabs shoppers’ attention for these products when they are already thinking about snacks/appetizers for upcoming gatherings.”

In the end, the message of ‘value’ needs to be driven home to customers, says Deli Brands of America’s Carando. “This is more important than ever with the recent inflation in food prices. Everyone likes to save money without sacrificing quality, and store brands offer that in an accessible and familiar way. Many supermarket private label brands have already earned the respect and loyalty of the customer.”


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