With rising grocery prices driven by inflation, shoppers are turning away from big-name brands. Instead, they are choosing smaller, often regional brands that offer lower prices, as reported by Reuters.
This trend isn’t just about the cost; younger consumers are searching for brands that tell a story. They want to connect with products that feel authentic, which is something smaller brands excel at. Nick Drewe, CEO of Wethrift, highlights that this isn’t just a passing fad, but a significant change in how people engage with food brands.
Take Hellmann’s mayonnaise, a popular brand from Unilever, for example. It’s facing tough competition from smaller brands like Duke’s and Mike’s Amazing Mayo in different regions.
Many established brands, like Hellmann’s, often overlook the importance of advertising. Instead, they focus on shelf space and distribution. According to Ellis Verdi, the founder of the advertising agency DeVito/Verdi, brands should consider “mental availability.” This means that consumers should think of their products outside of traditional options. Today, mayonnaise isn’t just about Hellmann’s anymore.
Shoppers, especially younger ones, are looking for brands that resonate with them personally, not just products that their parents bought. This should be a wake-up call for legacy brands. While one small competitor may not seem like a threat, several can significantly impact market share. For instance, Duke’s market share has grown by 3 percentage points to 9%, while Hellmann’s dropped from 50.6% in 2022 to 46.7% last year.
Smaller brands create strong connections with their customers through engaging stories and targeted marketing. Sarah Jankowski, who works in user growth at Shopkick, notes that these brands not only attract niche audiences but also build a loyal community. For example, Duke’s collaborated with Girl Tribe Co. to enhance its brand identity.
And those who think loyalty programs can save legacy brands might need to reconsider. A survey by Snipp found that just 20% of consumers found these programs influential in their choices. In fact, brand loyalty might be shifting altogether. Dave Peacock, CEO of Advantage Solutions, states that “brand disloyalty is the new loyalty.” A study by Daymon revealed that 87% of shoppers are trying private brands more than ever during grocery trips.
The EY Future Consumer Index found that two-thirds of consumers believe private label brands are just as good as big-name brands, and 38% have no plans to switch back to traditional options. This shift isn’t exclusive to budget-conscious shoppers; even high-income consumers are exploring private labels for a variety of products, from groceries to cosmetics.
This changing landscape shows that consumers are ready for something new. Brands that focus on storytelling, community, and genuine connections may be the ones that thrive in this evolving market.
Check out this related article: Discover the Future of Food: Lab-Grown Produce Set to Transform UK Supermarkets by 2027
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