by Food Trade News Team
Private labels are having their day in the sun. In 2025 private labels moved from a discount option for stores to court thrifty shoppers to a brand & margin lever.
Private labelling has long been a tale of two cities. On one side you have a best-in-breed company like Trade Joe’s where over 80% of their products are private labelled – many of which are unique, seasonal, and often carry premium prices.
On the other side you have middle market giants like Kroger and Albertsons which report anywhere from 25%- 28% of sales volumes as private label. Private label products are often produced by a third-party manufacturer – although some are made by in-house grocery divisions – and sold alongside national CPG products.
It gives the retailer control over the branding, packaging and pricing without having to manage manufacturing. Without paying for advertising costs, grocery stores can offer these private label products as low cost options and keep margins high.
Surveys would list private labels traditionally as cheap, low-frills, unremarkable, and aesthetically bland. 2025 is the year this formula truly became upended.
This change is in part because of the economic challenges facing consumers today, and because of the fastest growing grocery store in the country: Aldi. Taken together they are changing consumer behavior.
Swifty’s recent “True Cost of a Grocery Shop” revealed that a whopping 68% of consumers report that they struggle with the cost of groceries. Moreover, 38% said that they would switch brands if a promotion helps them save.
That’s a hard thing to hear for brand champions.
Aldi announced earlier this fall that it would launch its first-ever namesake brand and product label refresh. Packaged as a customer response – and not the result of their ongoing packing litigation with Mondelez – the refresh looks to rebrand their entire private label line and is expected to take years.
Aldi markets that over 90% of its products are private label. It’s part in how they are able to compete heavily as a discount grocer and part of their exceptional 2025 growth story. Aldi has over 2600 stores in the U.S. – projected to open 225 this year alone – and aggressively plans to reach 3,200 by 2028.
Aldi’s core use of private labels like Trader Joe’s, enables these retailers to grow even as other retailers suffer. Placer.ai reported that Aldi saw its store visits increase by 7.1% and Trader Joes by 11.9%.
When you consider that most national consumer product goods have gross margins around 26% and a private label gives you the option for 30% to 40% margins, the benefits become clear.
But the story doesn’t end there. In our reporting we’ve discovered that there are companies that have used private label goods not as the cheapest option on the shelf, but the priciest. The editors at Food World and Food Trade News felt it was important enough to create a report on this topic.
