Private label products have come a long way from their early reputation as plain, low-cost alternatives to national brands. Today, they represent a strategic pillar for retailers – offering differentiation, margin advantages and a way to build loyalty in an increasingly competitive grocery landscape.
As inflation and economic uncertainty continue to influence consumer behavior, private label has become more than a fallback option; it’s a deliberate choice for millions of shoppers.
But not all consumers view private label the same way. A study conducted by PDG Insights in October – which surveyed more than 1,400 U.S. shoppers and analyzed responses by race and ethnicity – offers a nuanced view of how Latinos, Black/African-American consumers and the general population (Gen Pop) perceive and purchase store brands.
The findings reveal critical insights for retailers and CPG manufacturers seeking to grow share and deepen engagement with diverse audiences.
Level playing field
When asked about their overall preference, Latinos and the general population are nearly identical in their attitudes toward private label.
About 29 percent of both Latinos and Gen Pop consumers say they generally prefer store brands over national brands. Black/African-American consumers trail significantly, at 21 percent, showing a stronger inclination toward national brands.
What is more telling is that 44 percent of Latinos and Gen Pop consumers view private label and national brands as interchangeable. This is a sign that store brands have achieved parity in perception for a significant portion of this audience.
The shift matters because it signals that private label is no longer seen as a compromise. For many shoppers, it’s another brand choice, evaluated on quality, price and trust rather than stigma.
Why consumers choose it
Across all groups, price savings remain the dominant driver of private label preference – but the story doesn’t end there.
For Latinos, price (49 percent), quality (47 percent) and promotions (42 percent) form a powerful trio of motivators. Recommendations from friends or family also play a notable role for Latinos (25 percent), more so than for Gen Pop.
By contrast, Gen Pop shoppers lean on price (58 percent) and quality (48 percent), with trust in the retailer (35 percent) ranking higher than among Latinos.
Gen Pop consumers also are significantly more likely to be influenced by product category, saying they prefer private label in some categories but not others.
Black/African-American consumers mirror this pattern, emphasizing quality and retailer trust while placing less weight on promotions.
These differences underscore a critical point: a one-size-fits-all approach to private label marketing won’t work. Retailers must tailor messaging to reflect the values and shopping behaviors of each segment.
For Latinos, that means highlighting not just affordability but also quality and cultural relevance – while leveraging promotions to drive trial.
Trust, excitement
Attitudes toward private label reveal strong positive sentiment across consumer segments. Two-thirds of both Latinos and Black/African-Americans say private label provides good value, and Gen Pop consumers show even stronger sentiment (75 percent). Consumers consistently say they trust their retailer, so they trust their private label offering.
Perhaps most encouraging for retailers is the openness to innovation. More than 60 percent of Latinos report being excited to try new private label products, signaling that this audience is receptive to new flavors, formats and experiences.
This enthusiasm creates an opportunity for retailers to position private label as a source of discovery – not just a budget-friendly alternative.
In addition, more than half of consumers wish that their retailers offered a broader assortment of private label offerings, reinforcing opportunities for growth.
Behavior shifts
The past year has seen notable shifts in private label purchasing. While one-third of Black/African-American consumers report they are buying more private label than they did last year, that increases to 37 percent of Latinos and 39 percent of Gen Pop consumers. While rising prices of national brands are a key driver of this increased purchasing for all consumers, other factors matter, too.
Consumers also state that promotions or discounts on private label products, improved quality of private label products and changes in household budget or financial situation influenced their change in behavior.
These findings highlight the importance of reinforcing positive experiences and maintaining strong promotional strategies. Retailers that deliver consistent quality and value – and make those benefits visible – will sustain momentum even as economic conditions evolve.
Discovery channels
How do consumers discover new private label products? The answer blends traditional and digital touchpoints. In-store signage and product packaging remain the top triggers, underscoring the importance of strong visual merchandising.
Social media (32 percent) and sampling (21 percent) play a bigger role for Latinos than for Gen Pop and Black/African-American consumers, pointing to the value of experiential and digital engagement.
For retailers, this means combining eye-catching shelf presence with targeted social campaigns, with in-store demos adding a notable impact. These tactics not only drive trial but also build trust and familiarity – critical for categories where consumers may be hesitant to switch from national brands.
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Sustainability, social responsibility
When asked in the study how important innovation is to maintain loyalty, 62 percent of Latinos rated it “very” or “extremely important,” on par with other groups.
But what does innovation mean to consumers? Unsurprisingly, data suggests that high quality products are most important to consumers.
However, Latino and Black/African-American consumers are looking for more. They are significantly more likely to put strong emphasis on value-driven attributes, including eco-friendly products, natural and organic ingredients and socially responsible messaging. They also emphasize sustainably and locally sourced ingredients.
These priorities outpace Gen Pop, signaling an opportunity for retailers to differentiate private label through sustainability and ethical sourcing.
In a marketplace where trust and transparency matter more than ever, these attributes can turn private label into a key point of differentiation rather than a fallback choice.
Loyalty driver
Looking ahead, most consumers plan to continue buying a mix of national and private label brands, but one in five plan to replace some national brands in the coming year.
The availability of unique or exclusive private label products influences retailer choice for about 80 percent of consumers, reinforcing private label’s role as a loyalty driver.
For retailers, this is a call to action. Private label isn’t just a margin play, it’s a strategic lever for differentiation. Exclusive offerings, cultural relevance and innovation can transform store brands from a transactional choice into a relationship-building tool.
What should retailers, CPG brands do
The data is clear: private label is no longer just a value play. It’s a strategic lever for growth, differentiation and loyalty. For retailers and CPG brands, the path forward requires intentional action.
First, invest in quality and innovation. Diverse consumers, especially Latinos and Black/African-Americans, are eager to try new private label products, but they expect high standards.
Innovation should reflect not only flavor and format but also values like sustainability, ethical sourcing and cultural relevance.
Second, tailor messaging by segment. Latinos respond strongly to promotions, social proof and quality cues. Black/African-American consumers prioritize trust and consistency. Generic campaigns won’t resonate – customization is key.
Third, expand discovery channels. In-store signage and packaging remain essential, but digital touchpoints like social media and sampling are especially effective with multicultural audiences. Retailers should integrate these tactics to drive trial and build trust.
Finally, treat private label as a loyalty engine. Exclusive offerings and culturally attuned products can deepen engagement and influence store choice. Retailers and brands that embrace this opportunity will not only grow share but also build lasting relationships with the consumers, shaping the future of grocery.
Diana Leza Sheehan, CEO of Evanston, Illinois-based PDG Insights, helps emerging brands and retailers make more effective strategic decisions. By leveraging data, she shares cost-effective consumer insights to plan retail sales narratives and brand strategies. Her 25-plus year career in the industry across sales, insight and strategy provides a unique perspective for clients.