The Indian grocery retail landscape is undergoing a quiet but powerful disruption with the rapid rise of private labels. From ecommerce giants like Amazon and Flipkart to new-age retailers such as BigBasket and Organic World, players are driving significant growth through their own grocery brands across categories like staples, snacks, dairy, and home care. No longer seen as just value-driven alternatives, these labels are reshaping the market with strong consumer loyalty and impressive growth, competing head-on with traditional FMCG leaders.

Organic World launched its private labels including WellBe (snacks and staples), Osh (toxin-free home care), and Vanam (dairy) after noticing a clear gap between consumer aspirations and what was available on shelves.

“People wanted healthier, cleaner, and more trustworthy alternatives, whether in daily staples, snacks, home care, or dairy. Our private labels were created to fill that gap with products that are 100 percent worry-free. By building these brands, we ensure consistency in quality, transparency in sourcing, and adherence to the highest safety standards,” shared Gaurav Manchanda, Founder & Director, The Organic World, WellBe Foods, and Osh Home Care.

BigBasket introduced its own brands across multiple categories: Fresho (fresh produce, dairy, meats), BB Royal (staples), BB Royal Organics (organic staples), Tasties and Tasties Origins (snacks and namkeen), GoodDiet (healthy snacks), and BBHome (cleaning). The objective behind this move was to provide a range of high-quality products with a differentiated value proposition at affordable prices.

“Over time, this move became one of the defining features of our business and helped us build a loyal customer base. Today, BB’s private label runs like an independent consumer business with dedicated category managers, sourcing, and growth teams,” said Seshu Kumar Tirumala, Chief Buying and Merchandising Officer, BigBasket.

Revenue Share from Private Labels

Private labels now contribute a significant share of revenue for major grocery retailers.

In FY24, BigBasket achieved sales of Rs 10,062 crore, of which close to 35 percent came from its private label portfolio. “Our private labels contributed about Rs 3,500 crore to overall revenue last year. The contribution typically ranges between 35 percent and 40 percent depending on the season and region,” noted Tirumala.

Similarly, Organic World’s private labels account for around 25 percent of total grocery revenue, and they deliver higher margins compared to national FMCG brands.

“Private labels typically deliver better margins, as the entire value chain can be controlled — from sourcing to production to distribution. But beyond margins, they also create deeper customer loyalty and stronger brand equity for The Organic World,” said Manchanda.

Popular Categories

For Organic World, the largest share of growth comes from staples (grains, pulses, flours, oils), followed closely by snacks under its WellBe brand.

“Consumers are also increasingly embracing toxin-free home care products (Osh) and fresh dairy (Vanam),” shared Manchanda.

BB Royal Organics has been the fastest-growing brand under BigBasket’s private label portfolio over the last three years.

“We have also introduced ‘Daivya Sparsh’ products for religious occasions, which grew from nil to Rs 10 crore annual turnover in 2024,” added Tirumala.

Changing Consumer Perceptions

Over the past few years, consumer perception of private labels has undergone a dramatic shift. Once seen as value-driven alternatives, they are now viewed as trust-driven, quality-led standalone brands — especially among urban, health-conscious consumers. This has resulted in higher retention rates.

Both Organic World and BigBasket have built loyal customer bases by focusing on transparency and strict quality control, alongside competitive pricing.

“Packaging, certifications, and ingredient transparency are influencing buying decisions more than just price. We’re obsessive about clean sourcing, transparent labelling, and packaging that reinforces our philosophy of ‘worry-free, wholesome, curated groceries,’” said Manchanda.

“Customers choose our own brands for their differentiated offerings and consistent quality apart from affordability. This trust is reinforced by practices such as farm tie-ups, geo-tagging, QR-code traceability, and strict quality control. Customer retention of our own brands is over 50 percent, well above the industry average,” said Tirumala.

Tapping Tier II and III Markets

Beyond metro cities, private labels are gaining strong traction in Tier II and III markets. For BigBasket, growth is even faster in these cities for BB Royal Organics.

“Our own brands are equally successful in both Tier I and II markets. BB Royal Organics is actually growing faster and commands a higher share in Tier II cities,” said Tirumala.

Organic World is also seeing increasing demand beyond metros.

“Currently, metros and Tier I cities drive the strongest demand because awareness around clean-label and toxin-free products is higher. But we’re seeing growing curiosity in Tier II cities, especially among young families seeking healthier alternatives,” said Manchanda.

Tackling Challenges in Scaling Private Labels

Scaling private labels in the grocery space brings challenges — from consistent sourcing and managing perishables, especially in dairy and fresh produce, to ensuring efficient last-mile delivery.

Organic World uses technology to manage operations efficiently.

“From AI-driven demand forecasting to reduce wastage, to inventory optimization for multiple outlets, to cold-chain management for perishables, tech can help us deliver on our promise while keeping operations efficient. We will continue to grow more in this direction as we evolve,” said Manchanda.

BigBasket also faces similar challenges in managing fresh produce, meats, and festival-based SKUs vulnerable to perishability and inventory obsolescence.

“We address this with direct farmer networks, geo-tagged farms, collection centres near production areas, cold storage at distribution centres, and temperature-controlled storage at dark stores. There are also challenges around predictability of sales and potential write-offs in certain categories,” added Tirumala.

Private Labels: The Future of Grocery Retail

Private labels in India’s grocery retail space are poised for exponential growth, given their rising consumer loyalty, quality, and margin advantages.

“Just as in Western markets, we believe private labels in India will become synonymous with authenticity and accessibility, not just affordability. We expect private labels to contribute around 50–60 percent of our overall grocery revenues in the next three to five years,” said Manchanda.

“The combination of margin strength and customer loyalty makes them a strategic lever in a market where FMCG brand margins are razor-thin. As consumer trust builds and more categories come under private labels, the Indian market will follow the trajectory seen in global retail,” concluded Tirumala.