Private-label brands captured nearly 25% of all US grocery units sold in the first half of 2026, according to Food Navigator citing midyear data from the Private Label Manufacturers Association. Store brands continued to outperform national brands in unit volume, even as national brands grew faster in dollar sales during the same period.
The mechanism is retailer control of the entire value chain. Grocers design the product, set the margin, choose the shelf position, and decide when to promote. A national brand negotiates for every inch of real estate. A private label owns it. The grocer can price private label to win on value, then use the margin saved on ingredient cost to fund customer acquisition elsewhere in the store. National brands still command higher dollar-per-unit sales, but they are losing the frequency battle — and frequency is how a brand stays in the household rotation.
This shift matters for any physical-product brand trying to break into retail. The buyer on the other side of the table is not just comparing your product to competitors. They are comparing your margin structure to what they could earn by white-labeling a similar SKU themselves. If your product does not deliver a defensible hook — a feature they cannot easily replicate, a brand story that drives pull-through, or a supply advantage they cannot access — you are competing with a house brand that starts with better economics and better placement.
The steal for a small brand is to position your product as the ingredient or the specialist that the private label cannot be. Retailers win on value and breadth. You win on specificity. If you make hot sauce, do not compete on general-purpose heat. Build the brand around a single pepper varietal, a regional style, or a collaboration with a known chef. If you make skincare, do not go head-to-head on moisturizer. Go deep on a single active, a sustainable sourcing story, or a format the store brand has not touched yet. Your pitch to the buyer becomes: this is the SKU that brings a customer into the category, and your private label captures them on the repeat.
On execution, you need a retail story that separates your product from the white-label alternative in the buyer's mind before the meeting starts. Run small-batch collaborations with local retailers or food halls to generate proof of differentiation. Use those results to show a buyer that your product moves traffic, not just units. Price at a premium to store brand, but justify it with a margin story: faster turn, higher basket attachment, or a customer demo the private label does not reach. The buyer is not choosing between you and a competitor. They are choosing between you and themselves.
The broader pattern is that retail is becoming a house-brand-first environment. National brands are holding dollar share by raising prices, but they are losing unit velocity. For a new physical product, that means your route to shelf is not to out-volume the incumbents. It is to out-specialize them and make the case that your product does a job the store's own brand cannot.