The Rise of Private Label Chips: Capitalizing on Profit Potential in Snacks

The private-label revolution has reshaped the global snack marketplace, with store brands now competing directly against industry giants for consumer loyalty. Valued at USD 12.7 billion in 2024, the vegetable chips sector is projected to expand at a 4.1% compound annual growth rate, reaching USD 16.2 billion by 2030. This segment, once dominated by established national brands, now sees retailers and food producers aggressively launching their own vegetable chip offerings. The evolving tastes of consumers, coupled with retailers' pursuit of improved profit margins, have transformed private-label vegetable chips into one of the food industry's most lucrative and rapidly growing categories.
Private-label products, also known as store brands or own brands, are manufactured by third-party producers but sold under a retailer’s brand name. Unlike national brands, which invest heavily in marketing and branding, private-label chips leverage cost-efficient production and streamlined supply chains to deliver competitive pricing and higher margins.

The vegetable chips category—encompassing potato chips, tortilla chips, vegetable chips, and specialty snacks—has seen substantial growth in private-label offerings due to increased consumer price sensitivity, improved product quality, and retailer investments in branding and differentiation.

The private-label chips market has been expanding rapidly, driven by:

1. Consumer Perception Shifts: Once considered low-quality alternatives, private-label chips have improved in taste, texture, and innovation, rivaling premium brands.
2. Economic Pressures: Inflation and economic downturns push consumers toward cost-effective alternatives, making private-label snacks more appealing.
3. Retailer Strategies: Large retailers like Walmart, Kroger, Aldi, and Lidl invest heavily in private-label branding, offering exclusive snack lines that differentiate them from competitors.
4. Health and Wellness Trends: Many private-label chip brands now offer organic, non-GMO, and gluten-free options, catering to health-conscious consumers.


According to the Private Label Manufacturers Association (PLMA), private-label products experienced a 3.9% increase in sales in 2024, surpassing the 1% growth of national brands. Over the past four years, store brand sales have risen by more than USD 51 billion, a 23.6% gain, while national brands saw a 6.8% decline in unit sales during the same period.

The profitability of private-label chips stems from multiple strategic advantages that favor manufacturers and retailers.

1. Higher Profit Margins

Private-label chips generate significantly higher margins than national brands, especially in the EU. Retailers avoid the high marketing costs associated with branded products, instead focusing on in-store promotions and loyalty programs. As a result, private-label snacks can be priced competitively while still yielding greater profitability.

2. Lower Marketing and Advertising Costs

Branded vegetable chip manufacturers allocate substantial budgets to advertising, celebrity endorsements, and promotional campaigns. In contrast, private-label chips rely on retailer branding and in-store placement, drastically reducing promotional expenditures. This cost-saving advantage directly translates into better margins.

3. Supply Chain Efficiency and Cost Control

Retailers with strong private-label programs often have direct relationships with manufacturers, allowing for:

• Bulk purchasing advantages, leading to lower production costs.
• Better control over ingredient sourcing, optimizing costs and quality.
• Streamlined logistics, reducing storage and distribution expenses.

By cutting intermediaries, private-label chips can be produced at lower costs while maintaining competitive quality.

4. Flexibility in Product Innovation

Private-label chip manufacturers have the agility to respond quickly to market trends. Unlike national brands that undergo lengthy R&D and approval processes, private-label brands can:

• Launch limited-time flavors based on seasonal trends.
• Introduce healthier options such as air-fried or protein-enriched chips.
• Experiment with alternative ingredients like lentils, quinoa, and chickpeas.

This adaptability ensures private-label chips remain relevant in a fast-changing consumer landscape.

5. Exclusive Retailer Control

Private-label chips provide retailers with exclusive offerings that drive customer loyalty. By developing high-quality, competitively priced chips, retailers create an incentive for shoppers to return to their stores rather than seeking branded alternatives elsewhere. This control extends to product placement, ensuring prime shelf space and visibility.

While the profitability of private-label chips is evident, there are challenges that manufacturers and retailers must navigate.


1. Quality Perception and Branding

Despite significant improvements, some consumers still perceive private-label products as lower quality than national brands. Overcoming this requires investment in premium ingredients, packaging design, and brand storytelling.

2. Manufacturing and Scalability

Private-label chip manufacturers must balance cost efficiency with the ability to scale production based on demand fluctuations. Investing in automation, supply chain resilience, and production capacity is critical to sustaining profitability.

3. Retailer-Manufacturer Relationships

Strong partnerships between retailers and manufacturers are essential. Retailers must ensure fair pricing agreements while manufacturers must maintain consistent quality and supply reliability.

The private-label chips market isn't just growing—it's evolving in ways that reflect our changing relationship with snacking. Looking ahead, several key developments will shape how we experience these retailer-owned brands:

• Premiumization Becomes Personal
• Gone are the days when store brands meant "cheap alternatives." Today's consumers are encountering private-label chips that rival or exceed the quality of national brands. Product developers are creating chip experiences that people genuinely crave—hand-crafted kettle chips with truffle salt, heirloom vegetable varieties with stories behind them. When someone reaches for a store brand over Kettle or Terra, that's not just a price decision anymore—it's a preference.
• Sustainability That Connects
• The move toward eco-friendly packaging isn't merely a business trend—it represents millions of individual choices. Many consumers switch to local store vegetable chips partly because compostable bags reduce guilt associated with snacking habits. For retailers, sustainable sourcing creates emotional bonds with shoppers who want their purchasing decisions to reflect their values, turning a simple chips, (or crisps) purchase into a small but meaningful action.
• Technology With a Human Touch
• While AI and data analytics sound impersonal, their application is deeply human. These technologies help retailers understand what they're actually craving—not just what we're buying. Systems can detect when customers in certain neighborhoods buy both regular chips and hot sauce separately, leading to the development of regional spicy flavors that become best-sellers in those areas. It's not about algorithms—it's about listening at scale.
• E-commerce As Relationship Building
• As more of us shop for snacks online, private labels have unprecedented opportunities to build direct connections. Subscription services for seasonal and limited-edition chips create anticipation and loyalty. Quarterly "chip drops" with surprise flavors transform ordinary snack purchases into anticipated events, making consumers look forward to discovering what new taste experiences await them.

In this evolving landscape, private-label chips aren't just gaining market share—they're gaining a place in our pantries, our social gatherings, and our daily rituals. The future belongs to the brands that understand they're not just selling chips—they're becoming part of the moments we share with others.

For businesses looking to source private-label chips, platforms like Torg offer an easy and efficient way to connect with reputable suppliers. Torg provides a marketplace where buyers can find high-quality private-label chip manufacturers, compare pricing, and negotiate contracts, streamlining the procurement process and ensuring competitive margins.

Private-label chips represent a lucrative opportunity for retailers and manufacturers in the competitive snack industry. With the right strategy—leveraging cost efficiencies, product innovation, and consumer trust—private-label chips can deliver higher profitability and sustained growth. As consumer preferences continue shifting towards high-value, high-quality alternatives, private-label brands are well-positioned to disrupt the traditional dominance of national brands in the chips market.
For food professionals, the rise of private-label chips in the snacks category signals a need to adapt to evolving industry trends, focusing on differentiation, quality, and strategic partnerships to thrive in the expanding private-label landscape.