The role of private label in the beverage aisle has shifted dramatically over the past several years. No longer relegated to “cheap alternatives” behind the national brands, retailer‑owned beverage products are now gaining market share, driving meaningful innovation, and carving their own niche with value‑oriented consumers.
At its simplest, private label refers to retailer‑owned brands sold exclusively through that retailer’s channels – think Kirkland Signature at Costco or Simple Truth Organic at Kroger. These in‑house brands span the gamut of categories and price points and are increasingly positioned as high‑quality, differentiated offerings rather than just lower‑cost options.
Segment Growth By the Numbers
According to data from the Private Label Manufacturers Association (PLMA) and Circana, US private label sales hit a record $282.8 billion in 2025, outpacing national brand growth and expanding share across multiple departments.
Private label dollar sales grew about 3.3 % in 2025 vs. national brand growth of 1.2 %, and unit sales also climbed, even as national brand unit volume declined. Over the past five years, private label dollar sales have jumped roughly 30 %, with share rising from 19.1 % to more than 21 %.
In the beverage category specifically, private label dollar sales grew 4.8 % in 2025, a strong performance within broader retail channels. Beverages also ranked among the leading departments for unit sales gains in 2025.
Within beverages, growth and opportunity are unfolding across segments that resonate with evolving consumer preferences. The overall beverage market continues to expand, with total “sips” approaching $490 billion in 2025, buoyed by energy drinks, functional beverages, and experiential formats that cater to hydration, wellness, and flavor discovery.
According to Circana, private label kombucha sales are now growing faster than branded alternatives, reflecting both expanding consumer interest in wellness drinks and private label agility in meeting demand. Energy drinks, plant-based beverages, and specialty water formats are also attracting attention, giving retailers opportunities to differentiate their portfolios while aligning with health-conscious and experimental consumer trends.
While national brands often lead on marketing muscle, private label products are increasingly competitive on quality, flavor innovation, and value – a sentiment echoed by shoppers who report higher trust and trial rates for store brands.
How to capitalize on the opportunity
When asked about the state of private label innovation in beverages, Andreas Schneider, co-founder at FedUpFoods, emphasizes that these brands are moving beyond the traditional “fast follower” model. “Private label is a real opportunity for retailers to build a direct connection that’s unique to them,” Schneider explains. “We aim for these products to stand on their own merit – as delicious, high-quality, well-sourced beverages. When they do, shoppers stick with them.”
For private label to succeed, balancing value, quality, and innovation is critical. As consumers increasingly view store brands as first-choice options rather than backup alternatives, maintaining trust and delivering consistently exceptional products becomes a cornerstone of loyalty.
Retailers are also leveraging recognition programs to showcase excellence in private label offerings. Chains such as Walmart, Sam’s Club, Albertsons, and Aldi have all earned multiple PLMA Salute to Excellence Awards for standout beverages, from innovative hot and cold drinks to unique flavor profiles. These accolades reflect the growing sophistication of private label programs and demonstrate that, when executed thoughtfully, store-brand beverages can compete head-to-head with national brands.
Road blocks & opportunities
That said, challenges remain. Like all CPG sectors, private label manufacturers must navigate supply chain costs, tariffs, and rising production expenses, which affect pricing and margins across the board. And while private label can offer price‑competitive goods, it still must meet high consumer expectations for quality and performance to build long‑term loyalty.
The broader opportunity, Schneider adds, is leaning into innovation and closer retailer‑supplier collaboration. With private label sales growing and consumers increasingly open to trying store brands, there’s space for beverage manufacturers to push beyond traditional categories and into emerging formats that reflect evolving tastes.
The future of private label beverages
In short, private label beverages have emerged as a powerful force in the US market. With robust growth, category-specific success, and a growing focus on innovation, these retailer-owned brands are proving that value and quality can coexist. By continuing to leverage speed-to-market, consumer insights, and product excellence, private label beverages are set to redefine the beverage aisle for years to come.
