In the growing consumer packaged goods (CPG) market (10.3 percent bigger in 2020 compared with 2019), it is small, private-label, and independent brands that appear to be accounting for most of the expansion. Although the big, familiar, national brands might still account for 46.7 percent of the CPG sales, this percentage is substantially lower than was the case about a decade ago, and it just keeps dropping, reflecting several parallel trends. Consumers like small, local brands, and those brands have gotten better about finding and accessing shoppers through various channels. Retailers also have embraced the massive opportunities available from private-label offerings, establishing well-reputed, appealing product offerings that consumers are happy to use to replace the national brands they previously bought. Beyond these broader trends, the COVID-19 pandemic and the supply chain struggles it created for the big brands also enhanced smaller companies’ opportunities. When the big CPG firms could not keep grocery stores stocked with toilet paper or detergent, consumers grabbed whatever was on the shelf, and some of them indicate no plans to switch back. The smaller CPG manufacturers generally showed more nimble responses, altering their production lines to ensure they were churning out the products that consumers needed during the pandemic and lockdown, whereas the big manufacturers, with their legacy supply chains, could not shift as quickly.

Source: George Anderson, “Are Small Brands Eating Big Foods’ Lunch?” Retail Wire, January 29, 2021