Private-label brands accounted for nearly a quarter of all grocery units sold in the United States during the first half of 2026, extending their unit-share lead over national brands, according to a midyear report cited by Food Navigator. The data reveals a bifurcated market: store brands dominate transaction volume while national brands retain pricing leverage and faster dollar growth.
National brands grew dollar sales faster than private label in the same period, signaling that consumers willing to pay for branded goods are less price-sensitive, while a broader cohort shifts to store brands to manage grocery budgets. The unit-versus-dollar gap shows two consumer segments moving in opposite directions, and both are defensible positions for physical-product marketers.
The mechanism is straightforward. Private label wins when the product category is commoditized and the brand delta is small—pasta, canned beans, aluminum foil. National brands hold when the product delivers a perceived performance or identity advantage that justifies the price premium. The lesson for a product marketer is not that private label is inevitable, but that you must either own a retail relationship that gets you shelf space as a store brand, or build enough brand equity that your product commands a price 20 to 40 percent above the store equivalent and still moves units.
If you manufacture a physical product and want to capture private-label volume, the play is to approach regional grocers and offer white-label production with co-pack terms that let them control the brand while you control margin through volume. You pitch the buyer on a product they currently source from a national supplier, show a 15 to 25 percent cost reduction, and offer a trial SKU in a single region. The contract includes a minimum order quantity that covers your setup cost, and you build the relationship by hitting delivery windows and maintaining spec consistency. Private-label buyers care about reliability and cost, not marketing.
If you are a branded product trying to hold ground against store-brand encroachment, the move is to create a product attribute the store brand cannot easily copy—a proprietary ingredient, a sustainability certification, a distinctive package format, or a brand story that connects to identity. Then you defend margin by spending on the handful of channels where your target customer discovers and validates new products: targeted social, influencer seeding, or retail demo days. You are not trying to out-distribute the store brand. You are trying to make 5 to 10 percent of the category willing to pay more because your product does something the generic cannot.
The private-label surge also creates an opening for challenger brands in the middle: products that are better than store brand but cheaper than the legacy national. This is the space where a direct-to-consumer brand with a modest wholesale strategy can win—offer independent grocers a branded product at a price point between store label and the national incumbent, with better margin than the national brand gives them and a story that helps the retailer differentiate. You are not Procter & Gamble. You do not need to be. You need to be the brand a regional chain uses to fight Kroger's private label without surrendering all the margin.
The unit-share data shows where volume is going. The dollar-share data shows where pricing power remains. A physical-product marketer picks one lane and builds for it.