June 23, 2010

Private label – tomorrow’s super brand?

Retailer brands have done very well during the recession. While private label has been boosted by the difficult economic times, the ongoing weakening of the bond between shoppers and established household brands was already an ongoing trend before the financial crisis hit.

When asked about private label, Sean Seitzinger, Senior Vice President, Consulting and Innovation at SymphonyIRI Group had this to say: “Private label is here to stay, and is primarily driven by consumer attitudes, behaviours and fundamentally better solutions on the shelf. When we see consumers adopting private label, it’s not because of price and value; it’s because of a perception of quality parity and a perception around relationship with retailer brand.”

The general trend toward discounting, focus on margins and cost control has prompted retailers to rationalise their ranges. This has freed up room for PL to underpin their price aggressiveness.

Although PL value ranges have seen the biggest growth, retailers have also reported strong sales of PL premium ranges as consumers eat out less, treat themselves at home and trade down from brands.

Private label is moving into new distribution channels: With its ‘Swap and Save’ campaign, convenience operator Londis is encouraging its shoppers to switch from branded to own-label products. The campaign focuses on how much consumers can save by filling their shopping baskets with the recently re-launched Londis private label. The campaign is a surprising move, as many convenience stores consider themselves the "home of the brands".

Source: www.just-food.com, Planetretail report: “The brands of the future”, May 2010, www.thegrocer.co.uk

The state of private label within chewing gum in Europe

How is private label doing within chewing gum in these economically turbulent times? The answer depends on which part of Europe you look at.

If we take Germany and Switzerland, these countries have a well developed private label sector that has also impacted the chewing gum category. In Germany for instance, private label accounts for more than 8% (value), while the figure in Switzerland is 21%.

If we move to the southern part of Europe, the situation is totally different. In France and Spain, the concept of private label chewing gum is still quite new. Consumers have however embraced the idea, and sales are now skyrocketing.

Source: IRI, Jan. 2010 and ACNielsen, Jan. 2010

The future of private label gum

Despite the fact that the key drivers within private label chewing gum are value offering and low price, this will definitely not be the case in the years to come. As consumer confidence in private label grows, the future is set for the development of more value-added products.

We see several prime examples of this tendency in the form of new intriguing flavour combinations, innovative packaging solutions and superior dental care benefits. The latter trend is illustrated by our new Xylit-Pro concept.