Delivering "Value" with Values

According to recent reporting in the Wall Street Journal, “U.S. consumers now spend more of their income on food than they have in decades,” and these pressures are pushing shoppers to scrutinize and evaluate their shopping choices in new ways.

In this new environment, more than half of retailers expect private-label goods to be their top driver of growth this year, according to a survey by NIQ, or NielsenIQ. (NIQ) This increase in shoppers exploring private labels presents a significant opportunity for retailers and suppliers. Seizing that opportunity will require a deeper understanding of what consumers are looking for when they evaluate private label products - and we are learning that it goes well beyond a low price tag. In fact, the key elements of value run much deeper, encompassing things such as trust, quality, sustainability, and convenience.

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Quality Means Trust

At the core of any conversation about value is quality, which is a critical driver of consumer behavior in CPG. According to Mintel, quality means far more than just good ingredients. It is about brand trust, product reliability, and delivering on elevated priorities such as sustainability.

The implications of this for retailers and manufacturers are enormous. It means that customer perception of a product’s quality is directly linked to things such as the retailer’s reputation on environmental and labor issues as a whole and the reliability of its supply chain (empty shelves in one part of the store might compromise the brand reputation of a private label product in a different department). Suppliers and retailers working together to ensure consistent supply, audit complete supply chains, and jointly develop sustainability goals is as important as suppliers sourcing high-quality ingredients and achieving economies of scale on core packaging components. It all matters when it comes to perceived quality as a driver of value.

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The Growing Importance of Sustainability

Over the past year, consumers have faced mounting challenges, from global conflicts and political unrest to ongoing inflation, but sustainability remains a major concern. As climate anxiety grows, with 60% of consumers reporting increased worry in the past two years, environmental issues now rival concerns about rising living costs, political instability, and personal finances, making sustainability a central aspect of modern values.

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Mintel’s research points out that five of the fastest-growing product claims across CPG are related to sustainability. Consumers are increasingly motivated by products that not only meet their personal needs but also align with their environmental and social values. Whether it's reducing plastic waste, supporting regenerative farming, or lowering carbon emissions, sustainability has become a non-negotiable for many shoppers.

This trend is reflected in the rise of private label brands that are not only affordable but also lead the charge in sustainable practices. Sustainability in CPG is more than just a selling point; it's now a key driver of perceived value.

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Convenience Matters

According to Mintel, for 42% of adults, convenience is more important than price. Consumers are increasingly seeking products that save them time and effort, which, in many cases, is just as valuable as saving money.

The specifics of convenience vary across CPG products, but some common themes emerge: ease of purchase, reducing steps in preparation, and providing an “out-of-home” experience in the home. Whether it’s developing ready-to-eat meals or engaging with suppliers to streamline the packaging of existing products, retailers have an opportunity to deliver value by making life easier for consumers.

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Value with Values at FedUp Foods

At FedUp Foods, we understand that value in private label manufacturing is about more than just maintaining low prices. It’s about connecting and delivering true value in a way that resonates with what consumers care about, whether that’s quality, function, sustainability, or convenience.

We are committed to sustainability and resilience in the face of environmental challenges and supply chain disruptions, which is why we work closely with our supply chain partners to optimize our products and processes to deliver the best possible value. From dual sourcing key ingredients to optimizing logistics for quicker, greener transit, and forging partnerships with regenerative suppliers like Teatulia and Global Organics, we’re committed to delivering exceptional value. Our Environmental Purchasing Policy prioritizes those who meet robust third-party social and environmental criteria, not just because this is what consumers crave, but because this philosophy is ingrained in our company DNA.

Our efforts also include land restoration and biodiversity preservation. We’re proud to compost spent tea leaves and through changes to our manufacturing process have prevented over 640 plastic filters from ending up in landfills this year alone. Our partnership with One Tree Planted has planted 1 tree every hour for the last two years (a number that we will exceed in 2025 and beyond).

In addition to formula development and packaging improvements, we’ve strengthened our supply chain through our 2023 Supplier Summit, ensuring resilience and regeneration. We’ve even expanded our bottle sizes without raising prices, standing against the shrinkflation trend.

At FedUp Foods, we understand that consumers want brands that align with their values. That’s why we’ve invested in regenerative farming, reduced our carbon footprint, and are mindful of every environmental impact. For us, making a great-tasting product at a fair price is as important as our commitment to sustainability. Through our purpose-driven approach, we are making a meaningful impact on the environment, society, and the accessibility of health-conscious beverages; contributing to solutions that will benefit future generations.

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Conclusion

The idea of value in CPG is evolving. It’s no longer just about low prices no matter the non-financial costs; it’s about choosing products that align with your budget AND your values, meet your quality expectations, and fit seamlessly into your life. Private label products are rising to this challenge, offering affordable alternatives and high-quality, sustainable options that deliver real value. At FedUp Foods, we’re proud to be part of this shift, helping redefine what value means for today’s consumers.

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SOURCES

Bain & Company.
"Ten Takeaways From Our 2024 Sustainability Survey of Consumers." Bain & Company, 2024. Link

Bain & Company.
"What Do Consumers Really Want: CEO Sustainability Guide 2024." Bain & Company, 2024. Link

Labor Department.
"Consumer Price Index Summary, July 2024." U.S. Department of Labor, 2024.

Mintel.
"What Value Means in CPG." Mintel Reports, 2024.

NielsenIQ (NIQ).
"Branded vs. Private Label: Who Is Going to Come Out on Top?" NielsenIQ Analysis, 2024. Link

Wall Street Journal.
"Food Industry Pushes Back Against Kamala Harris's Price Gouging Plan." Wall Street Journal, 2024.

Wall Street Journal. "Food Is Taking a Bite Out of Your Income. These Consumers Are Getting Creative." Wall Street Journal, 2024.

Whole Foods Market.
Impact Report 2023. Whole Foods Market, 2023.  Link

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