A new SPINS study found that private label sales climbed to more than $251 billion this year.
Researchers said Gen Z and Millennials drove 81% of that growth. While they represent the majority of households, their contribution was disproportionately high, the study found.
Gen Z shoppers are gravitating toward private labels in the refrigerated and beverage categories, while Millennials are especially strong purchasers in frozen foods.
Researchers also found that higher-income shoppers are among the fastest adopters, signaling that private labels are increasingly viewed as quality options rather than compromises.
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The study found that private labels are gaining popularity not only because of lower prices, but also because of their quality, health-focused ingredients and unique product offerings.
Researchers added that shoppers now expect private labels to keep pace with emerging trends and focus on the areas they care about most.
Those areas include intentional eating, nutrient density and global flavor exploration.
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Retailers are reportedly using three common approaches to innovate effectively.
Retailers such as Aldi, Walmart and Kroger are removing certain ingredients and expanding protein-focused offerings. Others, including Erewhon and Sprouts, are identifying trends early and bringing emerging products to market.
Limited-time offerings were also highlighted as an effective way to create urgency and drive repeat visits. The study identified Trader Joe's as a leading example of that strategy.
