RESOURCES - WHY PRIVATE BRANDS
The Old Innovation Model Is Broken.
Private Brands Are the Fix.
For decades, new products reached grocery shelves one way: a big CPG company decided to make them. That system is failing, and the data proves it:
Shoppers have moved faster than the giants can follow
Emerging brands can’t survive grocery economics
Shelf space is too scarce to wait on.
Private brands are the only channel positioned to close the gap. Here is the evidence.
THE INNOVATION CYCLE PROBLEM
Big CPG Takes Years. The Market Moves in Months.
Inside a large CPG company, a new product idea enters a stage-gate process built for a slower era. Committees review it. Quarterly earnings pressure it. Risk aversion shrinks it. By the time it reaches a shelf, the trend it was chasing has often moved on.
12–18 mo
The typical big CPG development cycle, and often longer. McKinsey found that even a simple line extension takes about 13 months on average to reach the market.
McKinsey
35%
Share of global CPG launches in early 2024 that were actually new products rather than line extensions or minor tweaks. The lowest level of genuine innovation Mintel has recorded since it began tracking in 1996. In the U.S. it was just 29%.
Mintel
3 of 4
New CPG product initiatives fail outright, per McKinsey, even as one third of CPG executives call innovation their number one growth lever.
McKinsey
8 → 2
In 2002, eight CPG companies ranked among the world’s 50 most valuable brands. By 2022, only two remained, according to McKinsey. Fail to innovate and you fail to stay relevant.
McKinsey
The result is an industry that knows innovation is critical but cannot execute it at the speed shoppers demand.
THE SHELF SPACE SQUEEZE
Shelf Space Is Finite. Every SKU Has to Earn Its Keep.
A grocery store cannot grow its shelves. Every new product must displace something else, and the cost of winning a slot is steep: slotting fees, promotion commitments, and proof-of-velocity a brand new product can’t yet show. Distributors favor what already
moves.
The system is designed to defend yesterday’s assortment, not discover tomorrow’s.
For the retailer, that scarcity is actually leverage. The one player who never pays for shelf space is the one who owns the shelf. Retailers can direct their most valuable real estate to products built for their shoppers, on their margins, under their brand.
EMERGING BRANDS CAN'T CARRY THE LOAD
Upstart Brands: Winning Share, Losing Ground.
If big CPG has stopped innovating, aren’t startups the answer? They’re certainly trying. Between 2016 and 2019, upstart food and beverage brands under $150 million in revenue captured 50% of the category’s value growth despite holding only 11% of market share, per McKinsey. And between 2016 and 2020, only 25% of CPG growth came from the top leading brands, while 45% came from small and mid-sized brands and a full 30% came from private brands.
But most emerging brands die on the vine under grocery economics. Slotting fees, thin margins, promotional demands, and distribution minimums crush companies before their products ever get a fair chance with shoppers. The innovation is real. The path to the shelf is not.
That leaves only one channel with the shopper trust, the shelf control, and the economics to bring real innovation to market at scale: the retailer’s own private brand.
WHY PRIVATE BRANDS WIN
The Data: Private Brands Are Having Their Moment.
$282.8B
U.S. store brand sales in 2025, up 3.3%, nearly three times the growth rate of national brands.
PLMA / Circana
23.8%
Private brand unit share in the first half of 2026, an all-time high, even as national brand units declined.
PLMA / Circana
80%+
U.S. consumers who told McKinsey in late 2024 that private brand food quality is equal to or better than national brands. More than 80% say the same about value. The stigma is gone.
McKinsey
97%
Grocers who expect to increase private brand innovation investment over the next two to three years, and 92% expect private brand profitability to rise over the same period.
McKinsey / SoG North American 2026
~1 in 3
Consumers who expect to buy more private brand products in the next year.
NIQ
25–30%
Where analysts at RaboResearch project U.S. private brand market share will land within the next decade, approaching levels long seen in Europe.
RaboResearch
55%
Food retail executives who say health and well-being products are a major growth opportunity for their private brands.
FMI
Read those numbers together and the story is clear. Shoppers now trust store brands, retailers are investing behind them, and the fastest growing opportunity inside private brand is wellness. Because retailers control the shelf, they can test, launch, and iterate in months, moving at a speed no legacy stage-gate process can match.
THE TAKEAWAY
Retailers Don’t Have to Wait for Big CPG Anymore.
The old model asked retailers to wait for national brands to define the next wellness aisle. The new model puts the retailer in charge: exclusive, science backed products, built for their shoppers, launched in about 180 days, with the margin and the loyalty staying in-store.
THAT is what Step Change was built to deliver.
Sources: McKinsey & Company (Rescuing the Decade; Winning with Commercial Excellence; A Turning Point for Private Brands; State of Grocery North America 2026), Mintel (The Role of Innovation in the Future of the CPG Industry), PLMA/Circana 2025 and H1 2026 data, NielsenIQ Global Private Label Outlook, FMI Power of Private Brands, RaboResearch via FoodNavigator USA.