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Retail trends driving private label growth, PLMA seminar speakers sayNew research indicates that private label’s gains across Europe are far from over. Seminar speakers at PLMA’s “World of Private Label” Trade Show, held last month in Amsterdam, presented data showing more market share increases for retailer brands and pointed to powerful trends that are likely to lead to even more growth. |
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The latest statistics from PLMA’s 2008 Private Label Yearbook, presented by Jonathan Banks of Nielsen, document the gains made by retailer brands. Market share for private label increased in nearly two-thirds of the eighteen countries tracked by Nielsen for the Yearbook, and now stand at 40% or more in the United Kingdom, Germany, Belgium and Switzerland—and over 30% in France, Spain and Portugal. A surge in new private label product introductions is playing a role in these gains. Nearly 15,000 private label products were launched by retailers in Europe last year. This represents an increase of more than 25% from the year before, Lynn Dornblaser, Director, Mintel, told seminar attendees. Since 2005, Europe’s retailers have introduced more than 35,000 private label products, according to Mintel research. This growth of private label was seen on the “World of Private Label” Trade Show floor, which was larger than ever. There were more than 3,100 exhibit stands, representing nearly 1,690 companies from over 70 countries. Overall, there was an increase of more than 100 exhibitors from last year’s event. |
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Retailers keep adding health, environment ranges |
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“Healthy” and “green” appear to be the two most important words for retailers when they develop new products. Across Europe, food retailers keep adding products that promise to help consumer’s health and protect the environment.
Some of the latest developments are: In Germany, Edeka is developing its own reduced-fat offerings. About 40 reduced fat products are available, but this will be increased to more than 80 items. The retailer is also training 1,100 employees to offer customers advice on health and nutrition. Organic food is another priority for Edeka; it now offers more than 250 organic foods. In France, Casino is unveiling carbon labelling on 20 products and plans to expand the programme to all its private label products. The labelling displays the distance of travel and the amount of packaging in terms of carbon footprint. Retailers in Switzerland—Migros, Coop and Spar—are on the health and green trends. Migros has launched environmentally-friendly TerraSuisse brand for its meat, charcuterie, potato, bread and patisserie products. The retailer is also introducing the MaVita line of fat-reduced, vitamin-enhanced and lactose-free items. Meanwhile, Coop is expanding its Naturaplan organic range, adding 70 products this year, and introducing new packaging. Spar is offering 21 healthy food items under the new Spar Vital brand. In Poland, Tesco aims to expand its range of healthy products with about 300 new lines of eco-friendly, organic and health products at its stores. |
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Aldi offers Trader Joe’s products |
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A selection of products from one of the most innovative private label programmes in the US is being offered to European shoppers. Trader Joe’s products are being promoted in Belgium and Luxembourg by Aldi Nord.
The range comprises 22 products, from peanut butter to marshmallows to California wines. A more limited range of Trader Joe’s products has been carried by Aldi stores in Germany and the Netherlands for some time. Aldi Nord is owner of the popular Trader Joe’s, which has about 300 specialty food stores in the US. Trader Joe’s products are known for unusual formulations, packaging and high quality and have created extraordinary shopper loyalty. There are nearly 1,000 Aldi stores in the US and the retailer has accelerated its expansion plans recently. Trader Joe’s and Aldi stores are increasingly operating in the same geographic areas of the US, but the product assortments have been kept separate. |
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EC updates rules on new foods |
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The European Commission’s proposal to update the approvals process for new foods has now begun its consultation phase. The proposal is designed to clarify the definition of new foods, including developments in the areas of cloning and nano technology, and create a more efficient and practical system for regulating these foods.
The key proposals include speeding up the process by centralising the authorisation procedure for new foods; developing a simplified safety assessment system; clarifying the definition of new foods; and providing data protection for those developing innovative foods. New foods are defined under EU law as foods not consumed within member states “to any significant degree before May 1997”. Responses to the consultation are required by 20 June. |
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Germany moves on food safety |
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The German Federal Institute for Risk Assessment (BfR) is tightening food safety measures. The agency is creating 14 new committees to provide expert advice on food, feed and consumer product safety. The committees include nutrition, dietetic products, new food and allergies; genetically modified food and feed; contaminants and other undesirable substances in the food chain; food additives, flavourings and processing aids; wine and fruit analyses; biological hazards and exposure assessment and standardisation.
The BfR undertakes risk assessment work on behalf of German government departments.
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Delhaize sees private label success |
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Delhaize’s expanded private label programme is contributing to the retailer’s improved financial performance. Pierre-Olivier Beckers, President & CEO, said, “Our competitive pricing and growing private label offering in particular have been instrumental in assuring sales momentum”.
In Greece, Delhaize’s Alfa-Beta stores showed a 15% increase in revenues, while Romania and Indonesia reported a revenue growth of 18%. Delhaize ended the first quarter of 2008 with a sales network of 2,561 stores. |
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Big sales increase for Asda’s premium range |
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Extra Special, Asda’s premium private label has been very successful, executives for the UK retailer told financial analysts. Sales for the products have increased more than 30% in the past year. Asda is looking to expand its private label wine range. The Extra Special line was revamped last year and currently features 30 different wine varieties. Over the past 12 months, sales are said to have tripled.
Asda is looking to restructure its private label programme. It plans to place a strong emphasis on fresh foods and reduce the numbers of brands it offers. “We are simplifying the range to include a value, mid-range and premium offering,” said an executive. |
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Leclerc promotes private label |
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Leclerc is promoting its private label programme and adding to its range of fair trade products. The French retailer has launched a TV advertising campaign which promotes the group’s Marque Repère products. As part of the campaign the retailer has introduced a new slogan, “ne prenez que le meilleur” (don’t take anything but the best). In addition, Leclerc has advertisements focusing on the group’s entire private label programme.
Following its introduction of its fair trade range called Entr’Aide, Leclerc also plans to increase other fairtrade products and have more than 400 SKUs by the end of this year. |
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Spar launches budget range |
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Spar has launched an economy range. The S-Budget line will comprise around 45 products, among them mainly staple foods such as rice, wheat, fruit and vegetables, but also ready meals. S-Budget will be simultaneously launched in the retailer’s home market of Austria as well as in its stores in Croatia, Czech Republic, Hungary, Italy and Slovenia. The products will be available in all of the retailer’s grocery banners.
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IN THE STORES
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Sainsbury’s ,
is launching a range of home wares under the TU Home brand. The offer consists of around 1,700 items including bathroom fittings, lighting and kitchen accessories.
Lidl is building its own chocolate factory in Übach-Palenberg, near Aachen, Germany. The retailer is said to be investing 40 to 50 million euros in the facility.
DM
in Germany is offering a baby food range under its babylove brand.
Auchan ’s
is expanding its distribution of private label products to Japanese retailer Uny. The retailer is already selling 31 Auchan private-brand lines on a trial basis at 10 stores.
Colruyt
is launching a new Extra Réductions loyalty card, offering price cuts on up to 1,000 products.
Cooperative
in the UK has extended its premium range, Truly Irresistible, to 300 items and is planning to add a further 50 this year.
In Finland,
Kesko Food
will be selling a large selection of its Pirkka private label products in the country’s second largest forecourt operator Teboil Ab.
Netto
plans to open about 30 stores in Sweden each year until 2012, as the hard discounter looks to double its market share in southern part of the country.
Dansk Supermarked may open stores under its
Bilka
hypermarket banner outside Denmark.
Système U
has opened its first U Express neighbourhood store. The retailer plans to open 400 stores within five years. The stores have a sales area of 250 to 500 square metres and stock 7,700 products.
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MARKET RESEARCH |
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New products, innovation are most important |
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Product development and innovation are the most important factors in a successful consumer product strategy, suggests a new study by Ernst & Young in collaboration with Oxford Analytica.
“As mature markets become increasingly dominated by fewer global brands and portfolios, innovation in new product development is a growing focus for consumer product companies. It is expensive and precarious, with most new products failing, but it is necessary to differentiate, drive incremental sales, and meet consumer expectations”, the report said. The second most important factor in a successful consumer product strategy is recognising shifts in consumer demand, including demographic changes and economic pressures, according to Ernst & Young. |
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PLMA NEWS |
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Executive Education Programme to be held 27-30 October |
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The dates for PLMA’s 2008 Executive Education Programme have been set. The programme will be held 27-30 October in Nyenrode Business Universiteit, near Amsterdam. Developed in conjunction with Nyenrode, the program is devoted exclusively to private label.
The faculty is drawn from the university as well as industry. Classes are concentrated into a four day schedule of instruction that includes workshops and case studies. The curriculum emphasises basic knowledge from private label history to fundamentals of packaging and promotion. Enrollment in all three of PLMA’s Executive Education Programmes is open to members and their guests. For more information, contact info@plma.nl.
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EVENTS |
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| E-Scanner is a monthly publication of the Private Label Manufacturers Association, Strawinskylaan 671, 1077XX Amsterdam, The Netherlands. © 2008 by PLMA. | |||||||||||||
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