Exactly two weeks ago, Walmart announced the launch of its new premium private brand, bettergoods. The brand centers on making gourmet food more enjoyable and affordable. Walmart has quoted the brand as their “largest private brand food launch in 20 years and the fastest food private brand Walmart has brought to market.” The launch is important for food manufacturers and retailers to understand as Walmart has several of the largest private label brands in the US and supports a bulk of the retailer’s sales. In the past 12 months ending Q1’2024, 26.4% of Walmart’s total grocery sales were from its private label offerings.
With bettergoods, consumers can expect the brand to offer products in a variety of categories with prices ranging from under $5 to $15. The brand also positions itself on three pillars: innovative flavors, plant-based foods and ingredients, and products accommodating to various diets. Rollout of the brand is expected to be fast with their online site showing bettergoods ice cream, cookie bites and mac & cheese being ready for purchase since the publication of this article.
Numerator has captured an early read1 on the shopping behavior and purchase-verified survey sentiments of the bettergoods brand for ice cream products to provide the industry a peek into what they can expect of the brand.
Who is the bettergoods shopper?
Early insights suggest that Walmart’s strategy of stratifying its private brands into separate price tiers to capture a different shopper through its pillars is working. Compared to its Great Value counterpart, the demographics of Walmart’s bettergoods ice cream buyers indicate a younger, more naturals-focused consumer who has dietary restrictions and cares about price and flavor.
Bettergoods ice cream shoppers are 67% more likely to be Gen Z (10.7% of shoppers, compared to Great Value’s 6.4%), and 3 in 10 (30.5%) shoppers seek natural / organic foods when shopping for groceries. Shoppers were also three and a half times more likely to have someone in the household require a lactose-free diet. Forty percent (39.5%) of bettergoods shoppers purchased the ice cream for its flavor, and 38% said price drove their purchase. Around 1 in 3 (31%) purchased bettergoods ice cream based on its nutritional facts.
Additionally, bettergoods appeals to both the low and high end of income groups. Bettergoods saw low-income homes be 34% more likely to purchase the brand and high-income homes to be 20% more likely compared to Great Value shoppers. This bifurcation suggests that the brand can appeal to lower-income consumers who want to treat themselves while also providing higher-income consumers with a product that goes beyond base needs at an affordable price.
One other reason why bettergoods is capturing a different shopper is that 7 in 10 (71%) do not know that Walmart owns the brand.
What is the shopping behavior of the bettergoods shopper?
Compared to the Great Value ice cream shopper, the bettergoods shopper’s spending behavior shows some important differences. Bettergoods shoppers make 16% fewer grocery trips in a year, but on each of those trips, they are spending 12% more. These shoppers are likely making fewer trips due to the channels they shop at.
Over 14% of grocery spending among bettergoods ice cream shoppers happens online. That is significantly higher than the Great Value ice cream shopper whose grocery share of spending online is 35% lower at just 9.5%. Brands and retailers need to consider having a more omnichannel lens to private label to ensure proper visibility into bettergoods’ impact on purchasing.
Other notable findings of the bettergoods ice cream shopper from Numerator include:
- In the past year, 7.9% of their grocery trips have utilized SNAP benefits.
- Nearly one-third (31.6%) of their grocery trips at any store happen on the weekend.
- They visit limited-service restaurants 16% less than the average Great Value ice cream shopper.
How is bettergoods performing?
Although early, bettergoods performance is promising. Three in four consumers (78%) say they plan to repurchase the brand on their next ice cream trip, and 46% find it to be a better value for the money compared to other ice cream brands. Thirty-seven percent of buyers say bettergoods is healthier than other brands and 34% believe it has higher quality ingredients.
The brand also shows it being incremental to Walmart’s portfolio compared to other brands. The average ice cream brand within Walmart will see 64% of their brand’s shoppers purchase Great Value within a year. Bettergoods ice cream shoppers are nearly 13% less likely to purchase Great Value ice cream in the past year (55%).
Although 1 in 2 bettergoods ice cream shoppers have purchased Great Value ice cream, the average price per quart of bettergoods ice cream is nearly four times (3.8x) the price of Great Value (observed through Numerator’s omnicharacteristics capabilities). Bettergoods allows consumers who have purchased Great Value to trade up and spend more within Walmart’s private brand portfolio overall at the expense of extra volume, which benefits Walmart’s margins.
What are the implications for retailers and manufacturers?
As Walmart starts to release more of its bettergoods products into stores, manufacturers and retailers will need to determine what impact it will have on their shoppers by looking at cross-purchasing and category leakage, respectively. Walmart’s private label market share accounts for 5.9% of total grocery (excluding fresh meats, alcohol and produce) spending, which is worth over $47.2 billion in the latest 12 months ending Q1’2024.
Additionally, Walmart’s bettergoods brand shows the ability to cross-sell into other categories as 63% of shoppers say they are likely to purchase other food products that the brand makes. Should bettergoods continue to see its line expand to the level of Great Value and encourage consumers to trade up or into the brand, Walmart could see lucrative gains at the expense of name brands and competing retailers.
If you would like to learn more about private label performance or start tracking product innovations in the marketplace, reach out to your Numerator account partner or get in touch with our team.
1 Purchase data of bettergoods is based on early read data of 162 panelists purchasing the brand ending 5/12/2024. Survey data of bettergoods is based on 200 receipt-verified purchasers of bettergoods fielded from 5/7/2024-5/12/2024. Figures are subject to change.
