Behind the scenes of the fastest-growing category in grocery retail
How do supermarkets develop private label products?
They don’t just slap a logo on a random SKU.
Today’s private label brands are built with as much strategy, data, and innovation as the biggest A brands.
From concept to shelf, every successful private label launch follows a clear process — and understanding that process is how suppliers, retailers, and category managers stay ahead in 2025.
Here’s how it works.
✅ 8 Key Steps Supermarkets Use to Build Private Label Brands
Identify category gaps using shopper data
Define a clear product positioning
Source or develop supplier partnerships
Create packaging that matches the brand tier
Set competitive pricing and margin targets
Align the launch with retailer strategy
Promote in-store, online, and in media
Track sell-through, loyalty impact, and repeat rates
Let’s break each of these down.
1. Identify category gaps using shopper data
Private label isn’t about copying anymore. It’s about leading.
Retailers start by looking for white space:
Is there a health trend no brand owns yet?
Are prices inflated in a low-innovation category?
Are shoppers trading down — or trading up?
This data-driven approach lets supermarkets create private label SKUs that are designed to win from day one.
2. Define a clear product positioning
Every private label line must answer two questions:
What role does this play in the category?
How should shoppers perceive it?
Some private labels are value-first. Others are premium, eco-led, or wellness driven.
What matters is consistency — from price to pack to placement.
3. Source or develop supplier partnerships
Supermarkets often work with specialist manufacturers to produce their own-brand lines. But these aren’t casual relationships.
Private label suppliers must deliver:
High quality
Flexible volume
Consistent production
Retailer-specific specs
4. Create packaging that matches the brand tier
Packaging isn’t just design — it’s strategy.
Value tiers use bold, simplified visuals
Premium ranges go minimalist, matte, or artisan
Wellness SKUs lean on greens, whites, and soft textures
Retailers brief agencies or internal teams to design on-brand packaging that earns trust — fast.
5. Set competitive pricing and margin targets
Retailers aim to undercut national brands, yes — but that’s not all.
They also want strong margins and category control.
This means private labels need:
Efficient COGS
Competitive SRPs
Promo flexibility
The best-performing private labels?
They deliver value and profit.
6. Align the launch with retailer strategy
Private label products don’t launch in isolation.
They’re planned into:
Category resets
Seasonal campaigns
Loyalty card pushes
Store brand expansions
This integration means private label wins attention — not just shelf space.
7. Promote in-store, online, and in media
Retailers don’t just build private label — they market it.
You’ll see:
End-cap placements
Banner ads in trade media
Features in loyalty newsletters
Social media highlights
Taste test content
Private label products get A brand-level support — when they earn it.
8. Track sell-through, loyalty impact, and repeat rates
Post-launch, the work isn’t done. Retailers monitor:
Sell-through speed
Margin contribution
Basket size increase
Shopper satisfaction
Repurchase frequency
If it performs — it scales.
If it doesn’t — it’s gone.
Private label is retail’s most ruthless, data-driven game.
Final Thoughts: Private Label Isn’t Plan B Anymore. It Is the Strategy.
In 2025, retailers aren’t just building private label brands — they’re competing with the biggest FMCG giants on purpose, quality, and loyalty.
And they’re winning.
The brands that survive this shift will be the ones that treat private label like the sophisticated, multi-tiered, fast-moving strategy it has become.