Private Label is Rising. Here’s How Your CPG Food Brand Can Rise Above It.

When you walk down the freezer aisle of your local supermarket and reach for a bag of french fries, what guides your hand? The comfort of the familiar brand you’ve trusted for years, or the retailer’s private label option that’s $2 cheaper with surprisingly similar packaging? For millions of shoppers, that calculation is shifting — and the implications for CPG food marketers are profound.

Over the last decade, private label brands have transformed from basic alternatives with generic packaging into sophisticated brand portfolios that command consumer loyalty — and an increasing percentage of category-level market share. As inflation squeezes household budgets and retailers invest more heavily in their own brands, CPG marketers face a critical strategic question: How do you compete when competitively priced private labels become household names? 

The answer isn’t found in short-term pricing strategies or promotional tactics. It lies in reclaiming the brand-level emotional territory that is too often surrendered to rational product-level decision-making at the shelf. 

The rise of private labels calls for a return to brand-level marketing fundamentals. To stay ahead of increasingly sophisticated private label brands, you must close the gap between brand relevance and product relevance, evaluate whether your value proposition truly distinguishes your brand (not just your category), and rebalance your marketing investment to build lasting brand affinity that private labels can’t easily replicate. Here’s how. 

Understanding the Private Label Landscape

The trend toward private label “brandification” isn’t new, but it accelerated dramatically during the pandemic as a practical response to market chaos. With numerous supply chain disruptions resulting in empty shelves, retailers wanted greater control over product availability. Private label proliferation hasn’t slowed in the wake of the pandemic. Instead, retailers are continuing to lean in, investing in private labels as a deliberate strategic initiative.

Today’s store brands represent far more than a margin play (though they certainly deliver higher profits to retailers). Chains like Target, Walmart, and Kroger have built sophisticated private label portfolios that compete across price points. Walmart’s Great Value brand delivers on price, while Target’s brands emphasize design and playful innovation. Meanwhile, Kroger’s Simple Truth and Private Selection labels target different consumer segments with distinct value propositions.

For retailers, private labels offer multiple advantages: direct control over pricing and margins, reduced dependency on national brands, prime shelf placement, and the ability to leverage their own digital properties to promote products. 

This shift fundamentally changes the competitive landscape for CPG brands, who now must negotiate with retailers that simultaneously serve as customers and competitors.

Why Consumers Choose Private Label

While economic pressures certainly contribute to private label growth, the shift goes beyond simple price sensitivity. Today’s consumers perceive less risk in trying store-brand food products than they once did. The quality gap — both real and perceived — has narrowed significantly. 

On top of that, as private labels successfully blossom into full-fledged brands, they’re winning a growing measure of affinity and loyalty among target consumers. When private labels cross into “brand” territory, they are no longer just cheap alternatives to “real” brands. 

It’s worth noting that not all food categories are equally vulnerable to private labels. Products considered “everyday staples” or “enhancement items” face the greatest threat. These include freezer aisle items (like french fries and ice cream), as well as supplementary ingredients that enhance meals but aren’t the core component, such as salad toppings or smoothie add-ins. In these categories, consumers are less likely to align with a specific brand and instead make more rational purchasing decisions based on price, functionality, and basic quality markers.

By contrast, CPG food brands that have established both product relevance (“this product is worth choosing”) and brand relevance (“this brand is meant for me”) maintain much stronger loyalty. Consider how many shoppers refuse to substitute Oreos with a store-brand alternative — even when it comes from a store brand that excels in other categories. The emotional connection to these iconic brands overrides rational product-level considerations.

Why Closing the Brand-Product Relevance Gap is Key

For CPG food marketers, success against private label competition requires closing the gap between brand affinity and product relevance. 

That’s because brand-level decision-making is emotional, while product-level decision making is more rational. The emotional response a particular brand elicits impacts the degree to which consumers allow brand allegiance to override rational decision-making as they compare products in their grocery store aisles. The stronger and more positive a brand’s emotional resonance, the more loyal consumers will be regardless of product-level specifications. It’s why so many people willingly pay a premium for Oreos rather than buying more competitively priced store brand chocolate sandwich cookies. 

Some CPG food brands try to beat private labels by winning product-level skirmishes. But private labels are actively investing in their brands. To stay relevant in the long term, you must do the same.

Rebalancing Brand Building with Performance Marketing

Over time, many brand marketers have shifted their focus from brand building to performance-driven, lower-funnel tactics. This shift wasn’t necessarily by choice. Stakeholder pressure, retail media networks, and the allure of immediate, measurable results all pushed marketing dollars toward short-term activation.

But there’s a fundamental difference between these approaches:

• Brand building generates sustained future demand by priming people to connect with your brand emotionally so that when they’re in the market, they’ll seek out your products at full price.
• Performance marketing optimizes short-term revenue through click-based attribution, often at the expense of long-term brand health.

When marketers over-index on performance tactics, they surrender the emotional territory that protects brands from private label encroachment. Without sufficient brand building, consumers make purely rational decisions at the shelf — exactly where private label has the advantage.

Priming the Pump for Long-Term Success

CPG brands must recommit to brand-building strategies that create meaningful differentiation retailers cannot easily replicate. This doesn’t mean abandoning performance marketing — both approaches are necessary — but it does require rebalancing your investment.

Ask yourself these strategic questions:

• Are you investing in creating emotional connections with consumers before they reach the shelf?
• Is your value proposition believable and ownable? Does it truly distinguish your brand, or does it just sell the category?
• Have you identified what makes your product “worth choosing” beyond price and basic quality?
• Are you telling a story that resonates with your target audience’s identity and aspirations?

The most successful CPG brands don’t view private label as a price war to be won. Instead, they recognize it as a strategic challenge that requires more deliberate brand-building and clearer differentiation.

In a market where retailers continue investing in their own brands, the strongest defense is a brand that consumers actively seek out — one they feel connected to emotionally, not just rationally. By closing the gap between brand relevance and product relevance, you can position your brand to thrive even as private label continues its inexorable rise.