Private-label brands captured 24% of US grocery unit sales in first half of 2026, widening lead over national brands

Private-label brands now account for nearly one-quarter of all grocery units sold in the United States, according to data reported by Food Navigator covering the first half of 2026. Store brands widened their unit-sales lead over national brands during this period, though national brands grew faster when measured in dollar terms—a split that reveals exactly where the distribution opportunity sits for physical-product makers.

The mechanism is straightforward: private-label products move more units at lower price points, while national brands hold dollar share by commanding premium prices on fewer transactions. Store brands win the frequency game; national brands win the margin game. For a physical-product maker, that gap is not a problem to solve but a wedge to exploit.

Why this pattern matters: grocery retailers invest heavily in private-label development because store brands deliver higher retailer margins and build customer loyalty without requiring the marketing spend that national brands demand. The buyer—whether a category manager at a regional chain or a procurement lead at a specialty grocer—operates under constant pressure to deliver margin while maintaining product quality. They are structurally motivated to source products that can carry the store brand at a price point below national equivalents but above the cost floor that commodity suppliers demand. That middle zone is where a contract manufacturer or white-label supplier with decent quality control and flexible minimums can build recurring revenue.

The steal for a physical-product brand is to position as the private-label manufacturer, not the branded competitor. Approach regional grocers, specialty chains, or even direct-to-consumer subscription boxes with a simple pitch: you manufacture the product they already sell under someone else's brand, you can match or exceed the quality, and you will do it at a unit cost that lets them hit their target retail price while improving their margin by 200 to 400 basis points compared to their current supplier. Bring a sample, a cost sheet, and a one-page spec comparison. Do not lead with your brand story; lead with their margin story.

Start with a test SKU in a single category where your manufacturing capability is strong and the national-brand price premium is widest—typically in pantry staples, personal care, or cleaning products. Offer a 500 to 1,000-unit trial run with payment terms that reduce their inventory risk: net-30 on the first order, consignment if you have the balance sheet, or a buyback guarantee if the product does not move within 90 days. Your goal is not to win the entire category; your goal is to get one SKU on the shelf, prove sell-through, and become the preferred supplier for the next private-label expansion.

Once you have one retailer running your product under their store brand, document the sell-through rate and margin improvement. Use that case as the pitch deck for the next five regional chains. Regional grocers talk to each other, especially in buying groups and trade associations. A successful private-label partnership with one chain becomes social proof that accelerates the next deal. You are no longer pitching capability; you are pitching a proven result.

The broader pattern: as private-label unit share grows, the surface area for white-label manufacturing partnerships expands. Every percentage point of unit-share gain represents thousands of SKUs that a retailer must source, and most retailers do not want to manage manufacturing themselves. They want a reliable supplier who will take the production risk, meet spec, and deliver on time. If you can do that at a price point that supports their private-label strategy, you have a business model that scales with the category, not against it.