Despite the challenges faced since 2020, such as the pandemic, supply chain disruptions and inflation, manufacturers have shown resilience by diversifying supply chains and negotiating price increases, according to the 2023 Private Brand Manufacturer Outlook Survey from Daymon, an Advantage Solutions company. Manufacturers are also increasingly optimistic about the growth of private brands and are prioritizing investment in capacity, innovation, technology and sustainability to stay competitive.
Here are four key takeaways from the report:
- It has been challenging, and it will continue to be challenging.
Costs have been high, with ingredients and commodities as the top cost drivers globally. Long-term concerns regarding energy and labor conditions will persist. Manufacturers must implement risk management strategies, diversify supply options and strengthen relationships across the value chain. - The future looks bright for private brands.
Inflationary periods provide a favorable environment for showcasing the value of private brands. Manufacturers are increasingly optimistic about the growth potential of private brands and are likely to continue investing in product development and collaborating with retailers to further expand private brands in the market. - The top two areas of focus going forward are product innovation and increased capacity.
Manufacturers are actively planning strategic investments in the next 12 months to remain relevant and bring differentiation to the market. The top two priorities are product innovation and increasing capacity. Manufacturers understand that innovation is vital for sustaining growth and recognize the importance of optimizing their production capacity to achieve economies of scale and support business expansion strategies. - Sustainability is on the agenda.
Manufacturers are increasingly prioritizing sustainability as one of the key focus areas for their investments in the next 12 months. Sustainability has become a business imperative and manufacturers recognize that their efforts should extend beyond their own operations. For instance, despite the challenges, manufacturers are voluntarily embracing Scope 3 carbon-reduction targets, which demonstrates their commitment to sustainability.