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  • Writer's pictureDiana Sheehan

Consumers Love Local Brands

picture of gotham greens and other brand local merchandising
Local Brand Merchandising in Chicago

I explored the importance of shopping locally at independent retailers in a recent column which got me thinking about consumer interest in local brands. As it turns out, consumers are just as interested in supporting local brands as they are local retailers. There is an appeal in being the first to discover a new product made in a home kitchen, or buying a brand where you not only know the brand story, but the owner's story as well. For any consumer, watching a brand go from being sold at a local farmer’s market, or getting a display at a single store, to growing into critical success with national distribution is fun. Americans love to see how small brands evolve into a national success story.

Many of us can picture our favorite small local brand–that craft beer from a local brewery, a barbeque sauce that is made at the local community kitchen, a hand-made protein bar that just got into your local grocery store named after the high school mascot. In this article, we’ll review some of the findings from a proprietary study, fielded by PDG Insights in March 2023, among over 500 US consumers that explored attitudes and perceptions around how people shop local brands.

Does local brand assortment matter for every category?

Almost half of US consumers say they go out of their way to buy local brands or products. Consumers intentionally bought local brands in the last month in every one of the 18 grocery and consumable categories explored. Penetration varied by category. More than 40% of consumers said they intentionally bought local brands in top perimeter and center store categories (outlined below). Less than 20% of consumers bought local in categories like pet care, deli, and floral. While penetration is lower, this doesn’t mean those categories are less important. It could be that there is less access to local brands at local stores, less communication about product origin, or even that products (like certain flowers) just aren’t available locally.

Image shows that Produce, Dairy, Bread, Meat, Cereal, Beverages, and  Cookies are top categories
Figure 1: Top Categories Shoppers Buying Local Brands

About half of consumers bought local products in produce and dairy, and that was consistent regardless of age. Retailers and brands need to focus on effectively communicating product origin with in-store signage in these categories, shoppers are looking for it.

There are significant differences in penetration of buying local brands between older consumers and younger consumers across a number of categories. Younger consumers are more intent on buying local brands across categories. Consumers under 35 are intentionally buying local brands in twice as many categories as those 55 and older. Shoppers under 35 over-index in buying local in 8 different categories including –beverages, cookies & snacks, frozen, baby, and deli. For retailers, this reinforces that featuring and promoting local brands is very important, regardless of category.

A graph that show images of people in different age groups with text about top categories bought local
Figure 2: Top categories by age group

How important is local brand assortment to consumers?

Understanding the size of the market for local brands is just one piece of a complex puzzle. For consumers that intentionally buy local brands, most say it is important that the retailers they shop at feature products that are known to be local. For example, while only 10% of consumers recently bought local baby products, over 80% of those shoppers said that having access to local brands in the category was extremely, or very important.

Graph that shows percentages of importance by category
Figure 3: Ranked importance of local assortment by category

Four of 10 consumers say they intentionally buy local cookies, snacks, and candy products. Among those consumers, about half (49%) believe it is extremely/very important for retailers to feature a variety of local brands.

How do you define a “local brand”?

While answers differ depending on the category, most consumers consider a brand local if it is produced within the state. Digging deeper, when averaging responses across categories:

  • Twenty-eight percent (28%) of shoppers say that a local brand is produced within my immediate city or town.

  • Two of 10 shoppers (20%) say production must be within 50 miles of my city or town for a brand to qualify as local.

  • An additional 22% say it means a brand is produced within my state.

Looking at specific categories, we see that for perimeter categories–produce, dairy, bread, deli, and floral, the definition gets a little more geographically focused. At least half of consumers in these categories define a “local brand” as one produced within 50 miles of home.

Why does buying local brands matter to consumers?

We see consistency in why consumers prioritize buying local brands and why they shop at local retailers, particularly as it relates to community support and product assortment. We also see a clear connection to which retailers consumers choose to buy local brands that must be considered.

  • Community first: Consumers are buying local brands because they are supporting small businesses, keeping money in the local economy, and helping to create jobs in the community. Three of 4 (74%) of consumers said they like to support their local community.

  • Unique products and assortment: People believe local brands provide unique products that they can’t find anywhere else. They believe local products are more authentic and could even be higher quality than national brands. More than half of consumers (52%) feel a personal connection to the brands they are buying.

  • Retail differentiation: More than half (54%) of consumers say they choose retailers to shop based on if they carry local brands that matter to them. This is a critical way for small independent retailers to differentiate themselves from national chains.

There is a clear intersection between consumers prioritizing shopping locally in retail and supporting local brands featured across retail. Retailers can help elevate the profile of local emerging brands, while differentiating themselves through assortment today.

If you want to learn more about PDG Insights “Shop Local” studies or explore how we can help you with questions about your consumers, feel free to contact me here. Reach out with any questions!

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