Are we seeing the beginning of an upheaval when it comes to national food brands?

Over the past 30 years or so, the United States has faced its share of recessions and sharp economic cycles, with the resulting stresses on consumer budgets.

Through it all, so-called “store” and generic food brands have continued to represent only about 15% to 20% of all retail food dollar sales.

National food brands have done their part to promote themselves as the “quality” choice over store brands, as well as to promote product sales through couponing and various other attempts to beat back the “value” alternatives.

Their success has been pretty decent, all things considered … up to now. But that might be about to change.

Rabobank’s Food & Agribusiness Research and Advisory Group has just issued a report predicting that private-label food brands are poised to jump to a 25%-30% share of the market over the next ten years.

That would make the U.S. similar to what has happened in Europe, where one in three products purchased today is a retailer-branded product.

What’s behind the anticipated rise in store brands? The Rabobank report cites several contributing causes:

• Food retailers have more sales reach and sales clout than ever. It’s not just traditional supermarkets but also warehouse clubs, drugstore chains and dollar stores.

• Retailers are expanding their private-label initiatives into more than simply “low cost/high value” lines.

• Stores are putting greater marketing muscle behind their own store brands – witness Target and its Market Pantry, Archer Farms and Up & Up product families.

Nicholas Fereday of Rabobank sums it up this way:

“Retailer brands have matured from their original positioning as ‘cheap and cheerless’ generic products into a more diverse range of national brand equivalents, and more recently, highly innovative premium products … On grocery shelves around the U.S., from convenience stores to upscale supermarkets, retail brands now complete successfully and often win against national brands, earning consumer trust in terms of pricing, quality, image and value.”

What are the ways the national brands can fight back against the store-brand trend? Rabobank suggests one good approach is to develop completely new products that address unmet needs.

Otherwise, they’ll end up being on the losing end of the equation, since the marketing efforts as well as attractive pricing of the store brands will ultimately prove irresistible to the majority of consumers.