Private labels, or in-store brands, are everywhere now, and they’re a hit with cost-conscious shoppers who aren’t loyal to big-name brands.
Almost every household has purchased a private label item at the grocery store over the past year. In fact, 1 in 5 shoppers say that their primary store’s brand is very or extremely important in their decision to shop at that retailer. These shopper preferences show up in retailers’ revenue: Walmart’s Bettergoods and Target’s Dealworthy were named 2024’s fastest-growing private label food brands, with each seeing sales volume increases of over 200%.
While shelf space is still dominated by large retailers, the trend of private labels can be well-suited for entrepreneurs and small businesses that see market opportunities but might not have the capital or expertise to produce their products without manufacturing partners.
Private labeling also doesn’t suit every industry. Find out who this trend works for and how labeling experts support the growth of these new product lines.
Key Takeaways:
The term “private label” is defined as products made by third-party manufacturers sold exclusively under a retailer’s own brand or trademark. Private labels usually signal affordability, often mirroring a pricier national brand.
They also make product categories more competitive overall. Using private labels, retailers and consumers trade their product differentiation and the “category specialist” mark of approval for competitive pricing that brings in more customers. Whichever private label tier you’re building, from own products to a niche market line, the design and compliance requirements shift with it. An experienced label printing partner can help translate your positioning into a label that fits the tier you’re targeting.
Private labels can be distinguished from similar terms, like white labels, store brands, and private label lines. Essentially, it boils down to how customized the product is.
Knowing exactly what defines these terms will ensure you’re on the same page as your manufacturer and label printing expert, which will also impact pricing.
Private label vs. white label: Private label is a customized, exclusive product made by a third-party manufacturer, where the retailer controls ingredients, features, and packaging, whereas the term white label refers to generic, premade goods that are resold by multiple retailers using their own logos.
Private label vs. store brand: These terms are actually the same thing: private label is the industry or trade term, and store brand is the consumer-facing term.
Private label types all include outsourced manufacturing, with retailer control of design, packaging, and pricing:
Premium private labels are high-quality and/or specialized products that are at least as good as, or better than, the standard manufacturer brands they emulate.
Between 2021 and 2025, the premium private label industry grew 76%, according to GlobalData, which is twice the rate of growth for total private labels. These labels compete most with the brands that never built real differentiation or a premium price position, so great opportunities exist in categories where shoppers have no strong brand preference (unlike, say, Kleenex).
Because your business controls the pricing, there’s no minimum advertised price to follow or the need to worry about a competing distributor undercutting your product. Private labels dominate the cleaning products market, with distributors and service companies reporting margins 15%-40% higher than those of third-party national brands, according to Sky Blue Chemical. Protecting those margins depends on more than pricing negotiations with your manufacturer. A label partner who understands your volume and materials can help you avoid overspending on print runs or specs you don’t actually need, keeping more of that margin intact.
The consumer demand for private labels is undeniable: the private label market now accounts for nearly a quarter of the volume in major categories.
Consumers love them too. McKinsey reports that the vast majority of U.S. consumers (more than 80%) rate private-brand food quality as equal to or better than national brands, and about 90% see similar or better value. Plus, 67% of Gen Z say private label is just as good as national brands.
Still, the look and performance of your label are important levers to influence consumer trust and purchase decisions, not just price. For instance, smaller, established brands can use storytelling and enduring trust on their label to compete with cheaper, private labels that lack brand recognition. Appealing packaging is a key driver for 13% of consumers when choosing a private-label product. Hitting that appearance consistently, run after run, comes down to the materials, color matching, and finishing choices your label printer makes behind the scenes, not just the design file you hand off.
As we mentioned earlier, not all industries succeed equally with private label brand strategies. Here are the ones that do.
The top industries reaping the benefits of private labels are food and beverage; cleaning supplies; and health, beauty, and supplements.
It’s not always clear why some industries outperform with their private label brands, but here’s what we know:
Food and beverage: In the food and beverage industry, consumers have a high awareness of private brands at the primary grocery retailer; 93% say they recognize private label brands vs 89% just last year.
Cleaning supplies: Growth in this industry has been influenced by higher margins for private-label goods, with e-commerce lowering the cost of entry for new brands, and the quality gap in formulations is closing.
Health, beauty & supplements: In this booming market, private label products are meeting consumer demands more quickly with shorter supply chains, especially around personalized health, niche markets, and supplements. E-commerce and online brand building have also given niche wellness and beauty lines the ability to sell their products without major overhead costs.
Each of these industries also comes with its own labeling demands, from moisture and grease resistance for cleaning products to ingredient and nutrition compliance for food and claims substantiation for beauty and supplements, which is exactly where a knowledgeable label partner adds value.
Making the leap to actually building a private label brand might be more straightforward than you think.
Typical private branding relationships look like:
Traditionally, manufacturers retain the ownership of the underlying intellectual property, recipes, and product designs unless there is an exclusivity agreement.
Manufacturing partners directly affect the quality, and therefore the success, of your product. Your choice matters: It should tick the boxes for maintaining product quality, formulation, consistency, and sometimes regulatory compliance.
It’s wise to look for manufacturing partners with experience in your specific market segment, strong formulation capabilities, solid quality control processes, workable minimum order quantities, and the ability to support your growth over time.
Lastly, managing private label products across multiple retailers requires manufacturers who can handle complex printing and inventory processes.
Because label consistency matters as you grow, consistent branding can increase revenues by up to 23%. Scaling your private label products across multiple retailers must ensure that your product packaging is standardized, traceable, and reliable.
When choosing your label printing partner, make sure they can provide:
Private label brands are a legitimate growth strategy for small businesses ready to build margin control and brand loyalty in categories like food, cleaning, and beauty. Paired with the right manufacturing partner and a label printing expert, your private label line will earn more consumer trust from the shelf, and compete with, or even outperform, the national brands it was modeled after.