Product Synopsis

Private label strategies are evolving from offering value and tiered product ranges to meeting a greater variety of consumer needs. This report tracks the latest evolution of private label strategies and their impact on retailer and manufacturer strategies, from mature private label markets in Western Europe and North America to the emerging markets in Asia and Latin America. In particular, the report provides details on private label development in packaged food.

Introduction and Landscape

Why was the report written?
The evolution of private label strategies across the world means both retailers and manufacturers need a new playbook in order to make the most of new and emerging opportunities in food retail. This report offers a comprehensive study of private label growth strategies and brands' defense strategies, and also highlights the key countries, sectors in packaged food, and consumer groups where private label is gaining ground.

What is the current market landscape and what is changing?
Private labels have evolved beyond a “good, better, best” offering to target a greater number of consumer needs and price points. Meanwhile, private labels are also gaining ground in emerging markets, as multinational retailers adapt their best practices to the fastest-growing food markets worldwide. Development is key as marketers need to react to these trends or risk losing ground competitively.

What are the key drivers behind recent market changes?
Private labels have improved their targeting of specific consumer needs; in more developed markets, 'value' is giving way to 'quality' and retailers are adjusting their portfolios to enlarge and rebrand standard private labels. Meanwhile, in emerging markets, retail consolidation and the entry of multinational retailers into developing countries is driving private label penetration.

What makes this report unique and essential to read?
This report provides the reader with a comprehensive review of the current state of play in private label food worldwide and the strategies underpinning private label's growth across food sectors. This will allow the reader to better spot emerging opportunities in both promoting and defending against private labels.

Key Features and Benefits

Private label hotspots are identified and analyzed through the analysis of retailer and packaged food market data.

A five stage private label maturity model provides insight into the strategies used by retailers to grow and develop their presence in food markets.

The report details the methods used by retailers to add value to their private label programs.

Analysis of the key consumer groups for private label food by country and by sector.

Case studies highlight how the leading retailers are driving private label innovation and taking on both B brands and A brands.

Key Market Issues

B brands are being squeezed by A brands and premium private label from above and from below by a whole portfolio of private labels, ranging from value and discount brands through to diverse niche and targeted private labels.

Multinational retailer expansion is accelerating the pace of private label penetration and manufacturers need to account for this in their strategic planning.

B brands face the choice of either shifting aggressively to improve operational efficiency, or shifting to niche and premium sectors in which private labels can struggle to express a unique brand identity and set of brand values.

This report forecasts that a new band of countries will enter the 'maturing' phase of private label penetration when the squeeze on B brands really takes hold. These include Argentina, Poland, China, and South Korea.

Retailers have to work out how to evolve their portfolios as consumer expectations change. Manufacturers meanwhile have a much deeper strategic challenge about how they work with retailers in the future and what that means for their innovation programs.

Key Highlights

Spain and the UK lead private label, with a penetration rate of nearly half the grocery market. At the other end of the scale, Indonesia, Egypt, and China all have private label penetration at less than 5% with some countries having virtually no private labels. However, across all channels, private label in food remains low; the highest penetration region is Western Europe, where private label accounts for a 14.7% market share by value.

The five stages of private label maturity are: first, the introduction of value products to drive price-based switching; second, the creation of a price architecture to drive trading up; third, the diversification of the product offering; fourth, consolidation and reorganization of the offer; and fifth, brand building.

Retailers are placing a greater focus on aligning private label ranges with shopper missions, such as through products that are exotic and nutritious, those which all fit under a specific calorie count, or the fast importation of restaurant trends into meal ranges.

The most effective strategies to adopt depend on the brand in question, and the maturity of private label competitors in the sector and country in which the brand is competing. The options range from targeting premium niches that do not support large numbers of SKUs to targeting opportunities outside the supermarket channel.

Table Of Contents

Evolving Private Label Strategies, Consumer Choices, and the future impact on Food Brands and Private Labels
Introduction, methodology and definitions
Private label hotspots
Deep dive: who eats private label food?
Evolving private label architecture and brand strategy
Private label growth
Private label defense
Case studies
Aligning private label strategies with consumer targets
The future of private label
Appendix

Companies Mentioned

Ahold, Aldi, Barilla, Carrefour, Casino, Cencosud ,Chobani ,Coop (Italy).

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