The wild success of Walmart's generic cream cheese perfectly encapsulates the problems with the American economy right now

Walmart's cream cheese was one of the fastest-growing brands of 2022, according to Morning Consult.
The product's popularity shows the effects of inflation and supply chain problems on shoppers.
Dairy products in particular have been hard-hit by inflation, pushing consumers to save money.

One of the products that consumers reached for this year wasn't a new streaming service or an upstart product that blew up on TikTok. It was cream cheese from Walmart.

According to surveys conducted by Morning Consult, cream cheese sold at Walmart under the retailer's Great Value brand was the eighth fastest-growing brand in 2022. The ranking includes products and brands that saw consumer interest grow the most in 2022.

Store-brand cream cheese isn't a typical contender for most popular product, said Emily Moquin, food and beverage analyst at Morning Consult.

But the factors that likely made it popular with consumers highlight some of the most important dynamics of 2022, she told Insider.

"The fact that Great Value cream cheese is in our tracker this year... is an interesting confluence of factors that are all part of the story of what we've been seeing in terms of food and beverage trends this year," Moquin said.

Fastest growing brands 2022
Morning Consult

Inflation is leading consumers to buy more store-brand groceries

Great Value cream cheese's growth is part of a larger trend of people pivoting toward Walmart's private label throughout the year. Company leaders have said during earnings calls that inflationary pressures on food have led cost-conscious consumers to opt for the retailer's less-pricey private brand items.

"Consumers are feeling inflation pressures as evidenced by an increase in grocery private brand penetration," then-chief financial officer Brett Biggs said during an earnings call in May.

Walmart US President and CEO John Furner said during the call that "categories like Deli, lunch meat, bacon, dairy are where we see customers trading from brands to private brands."

Dairy products, like cream cheese, have been hit exceptionally hard by inflation. According to the latest data from the Bureau of Labor Statistics, the average price of dairy and related products for October was 15.5% higher than the year prior. Food at large has seen a 10.9% year-over-year increase, according to the data, and the average price increase for all items is 7.7%

"It's been a strong year for private label, and inflation is part of it," Moquin said.

"But I think dairy specifically has had even higher inflation than the top-line food and beverage level," she added.

Supply chain issues at big brands gave others a chance to catch consumers' attention

Another reason store-brand cream cheese had a big year: Supply chain problems made it harder for shoppers to get the brands that they're used to.

Beginning in late 2021, dairy producers had trouble filling orders for the cheese. That led to shortages at bagel shops in New York City as well as on supermarket shelves. Kraft Heinz, the company that makes Philadelphia cream cheese, even ran a promotion that paid $20 to customers who couldn't find the key ingredient for holiday cheesecakes due to the shortage.

Philadelphia is the market leader in cream cheese, Morning Consult's Moquin said. But when it became harder to find, store brands became a solid second option, she said.

"They were having a lot of supply-chain issues getting their stock to grocery stores," Moquin said. "That is partially why we see this very specific category of cream cheese being on the list."

Read the original article on Business Insider

Contributer : Business Insider https://ift.tt/H7xqVQM

Something that you might miss to see?