U.S. private-label sales reached a record USD 282.8 billion in 2025, rising by more than USD 9.0 billion from the previous year, according to Sphericalinsightslion from the previous year, according to Sphericalinsights. The surge in private-label sales confirms a fundamental shift in consumer purchasing, with store brands now dominating a growing segment of the retail market. Shoppers are fundamentally altering how they fill their carts.
Traditional Consumer Packaged Goods (CPG) brands have invested decades cultivating consumer loyalty. Yet, shoppers are rapidly shifting their purchasing towards private labels. This directly challenges established brands, as their long-standing market positions now face intense competition from retailer-owned alternatives. Brand loyalty and market share are under direct threat.
The rapid expansion of private labels presents an existential threat to traditional CPG brands. They must fundamentally re-evaluate market strategies and value propositions to remain competitive. This is not a mere trend; it is dismantling brand loyalty, forcing CPGs into difficult choices: engage in price wars or pursue niche specialization.
Private label sales grew 3.3% year over year in 2025, reaching a record $283 billion, Packaging Dive reported. The 3.3% growth in private label sales outpaces the overall retail food and beverage CPG market growth of 3% in 2025. The implication is stark: established CPG brands are effectively starved of organic growth. They now compete for a shrinking slice of the pie, rather than benefiting from market expansion. The competition for a shrinking slice of the pie intensifies pressure on traditional brands to find new avenues for value.
The Unstoppable Rise of Store Brands
Private label products now command a 50% unit share across France, Germany, Italy, the Netherlands, Spain, and the United Kingdom, according to Produce Business. The 50% unit share of private label products in mature European markets demonstrates sustained market penetration. The consistent year-over-year increase in private label unit share since 2021, rising by over three percentage points, confirms a permanent shift in consumer purchasing. The consistent year-over-year increase in private label unit share suggests a future where brand loyalty, once paramount, holds diminishing sway.
Store brand products now comprise over half of CPG and FMCG units sold in Spain (59%) and the Netherlands (56%), Produce Business reports. The market saturation of store brand products in Spain and the Netherlands confirms private labels as a permanent fixture, not a fleeting trend. Given this European precedent, the U.S. market's record $283 billion in sales is not a peak. It is merely an early indicator of an inevitable future where store brands dominate consumer baskets. Traditional brand loyalty is rapidly becoming a depreciating asset for major CPG players.
Traditional Brands Under Siege
Hormel Foods lowered its full-year sales forecast on August 27, 2026, citing softer consumer demand and sustained pressure on its retail business, Sphericalinsights reported. Hormel Foods' lowered sales forecast directly links private label growth to the financial struggles of established CPG brands. Hormel's experience exemplifies how individual brands face declining demand, even as the broader CPG market shows some growth.
Major CPG players are already feeling this financial strain. The situation forces these brands into a difficult position: compete solely on price, a losing battle against private labels, or innovate to find new avenues for differentiation.
A New Retail Reality
The private label share across 17 European countries reached 38.8% based on MAT W52 2025, according to plmainternational. Switzerland leads with a 52.4% private label share, representing over €14 billion, while Spain recorded the strongest growth at +1.0%pnt. The broad and accelerating expansion of private labels across diverse European markets confirms a powerful global trend. It suggests that even in mature markets, private labels continue to gain ground, indicating a persistent shift rather than a plateau.
Despite the overwhelming surge of private labels, smaller CPG brands ($100M-$500M in sales) are finding significant success through innovation. New items accounted for 19% of their sales in 2025, Packaging Dive stated. The 19% of sales from new items for smaller CPG brands sharply contrasts with the broader market, where the share of dollar sales from new CPG items only slightly increased from 5% to 6% year-over-year in 2025. The success of smaller CPG brands suggests that agility and focused innovation offer a viable path for some CPGs to resist private label encroachment.
The success for agile, mid-sized brands reveals a distinct competitive landscape compared to large incumbents. The market shift compels CPGs to innovate and differentiate, while simultaneously granting retailers unprecedented power. The market shift compelling CPGs to innovate and granting retailers unprecedented power fundamentally alters the competitive dynamics of consumer goods. Smaller brands, leveraging their agility, can respond quickly to consumer demands and carve out niche specializations that private labels struggle to replicate.
By early 2027, if current trends persist, traditional CPG brands will likely face an intensified imperative to either acquire innovative smaller brands or aggressively pivot towards highly specialized, premium offerings that private labels cannot easily replicate, as retailers solidify their control over consumer purchasing.
