PLMA held its record-setting “World of Private Label” International Trade Show, May 31 to June 1 in Amsterdam. Watch the direct-from-the-show-floor news reports. Watch video here.

 

 


Richard Hyman, Partner at Thought Provoking Consulting, said private label share in the U.K. could reach 60% in the future.
Watch video here.

 

 

PLMA E-Scanner – June 2022

June, 2022
Seminar speakers predict private label growth

All three presentations at PLMA’s pre-show seminar presentations in Amsterdam on 30 May predicted private label will grow in the coming years. Sebastiaan Buchholtz from NielsenIQ, who reported on the state of retail brands in Europe, revealed that in 2021, national brands pushed a lot with promotions, which had a negative effect on private label share. This year is the start of a new market dynamic with a change in consumer behaviour. Consumers are feeling food price increases and are cutting down on luxury products and looking for value. In addition, discounters across Europe are expanding. This will result in an increase in private label share. In addition, Nielsen sees room for private label in the online channel.

François Videlaine and Sebastian Gatzer from McKinsey saw opportunities for retailers to capture different consumer expectations with private label. It appears from their survey that one of the main reasons for customers to choose a particular supermarket for their grocery shopping is because the own brands of the chain are good. Grocers that have the highest market share growth also have the strongest customer appreciation of their private label. McKinsey expects private label in Europe will grow in the coming years and entry price level will become more important. However, the researchers warn that consumers do not accept trade-offs on the quality of entry level own brand products.

PLMA’s new consumer study was presented by Judith Kolenburg. The survey of 6,500 shoppers across eight European countries revealed that three in ten are buying more own brands now than they did before the pandemic. Gen Z and Millennials have increased their own label buying the most: 32% of these generations buy more now than before the pandemic, compared to 25% of Gen X and 22% of Boomers. Four in ten respondents say they will buy more private label in the coming years. The report will be available at the end of June.

Online grocer Rohlik expands

Czech-based online food delivery company Rohlik is on a European expansion path. In addition to its existing markets in the Czech Republic, Austria and Hungary, it launched in Germany last year under the name of Knuspr.de in Munich and Frankfurt and is expanding to more cities there.

Now the retailer is arriving in Spain under the Sezamo brand, starting in the Madrid metropolitan area and it will set up a technological hub in Barcelona. Rohlik plans to invest more than 50 million euros in its first years in Spain. Initially, the company will offer over 8,000 SKUs, including fresh. It offers home delivery in less than three hours.

The e-grocer has benefitted from the faster shift to online shopping during the pandemic and says that it has not seen a post-pandemic slowdown in growth. Rohlik posted a 53% year-on-year rise in net revenue to 490 million euros in the past year ending in April, with more than 1 million customers. Next on the company’s expansion agenda are Italy and Romania.

More quick e-commerce players jump into private label

Fast grocery deliverer Gorillas has announced the launch of its first four private label lines in eleven product categories. It will offer the new own brands in its key markets of Germany, France, the Netherlands and the UK.

The new lines are brought to the market under the names of “Gorillas Daily”, for everyday products at entry-level prices, for example spreads, cheeses and cold cuts; “Gorillas Premium”, for high-quality products such as fresh pasta and sweet and savoury snacks; “Hot Damn”, for coffee, coffee grounds, recyclable pods, and oat drinks; and “start-up beer” for craft beers, a Bavarian light beer and a pale ale.

The products were developed on the basis of customer analysis and will offer high quality for a fair price. Gorillas emphasizes sustainability with its private label, as all products are made by companies that share its commitment to sustainability and transparency. On the occasion of the launch, CEO Kağan Sümer said the new private label is a central component of the company’s profitability strategy and should open up additional sources of income.

In the meantime, competitor quick e-commerce provider Flink is expanding its private label range. Under the name of “Flink’s Finest”, the company’s premium umbrella brand has welcomed the first fresh products, sliced and grated vegan cheese alternatives, fruit spreads and soups, including organics. The company emphasizes that the focus of the private label is on high quality products and ecological details. More additions are to follow soon.

The Flink’s Finest products are sourced by the company itself, independent from its food retail partner Rewe. Flink also carries Rewe’s own brands -- Rewe Beste Wahl and Rewe Bio -- in its range. Elsewhere, Flink just acquired French competitor Cajoo and therewith becomes Carrefour’s exclusive commercial partner in the country.

Coop Italia to massively build out own brand offer

Italian market leader Coop Italia is revolutionizing its private label assortment by expanding it with over 5,000 items within the next two years. The aim is to double Coop’s own brand market share in this period from 3 billion euros to a value of 6 billion euros. It is the largest ever own brand repositioning in the country.

To secure new products, the retailer is expanding its supplier base with an additional 250 private label manufacturers, eighty percent of whom are Italian SMEs. Initially, breakfast products were launched, next are soft drinks, pasta and other product categories with a special emphasis on gluten-free, free-from and organics.

Coop says it is rolling out this operation to keep consumption afloat without putting a strain on the budget of Italians. At the same time, the project forms the basis of the retailer’s future strategy towards a convenient, innovative and affordable offer that responds to the needs of consumers.

In the Stores 

Aldi Switzerland has introduced a new own brand, “Retour au sources’ for organic products. It will gradually replace its previous Nature Bio Suisse label with products that go beyond the previous Bio-Suisse standards.

Carrefour has announced it will use blockchain technology with its own brand organic products Carrefour Bio. Consumers can access information about a given product simply by scanning the QR code on its label. This will tell them all about the product’s life cycle.

Kaufland launched a new price offensive under the motto “Now more than ever”. The campaign emphasizes that 7,000 private label and branded products are permanently priced as cheap as at discounters.

Delhaize had started Delivery+, a subscription plan for high-frequency customers which allows them to subscribe and reserve time slots at lower delivery costs. The system becomes more attractive for customers who order regularly.

Co-op supermarket chain has started ‘walking deliveries’ for households and workplaces up to a 15-minute walk from its stores in the UK. Deliveries will be made on the same day orders come in. It expects to roll out the service to 200 stores this year, including those in smaller towns and rural villages.

In Italy, hypermarket chain Iper la Grande I introduced a new premium private label, Patto Qualità Iper for fish, meats, eggs and cheeses and it ensures eco-friendly and sustainable farming and breeding.

E. Leclerc has created an “anti-inflation shield” for 120 everyday products. In the coming months, the retailer will systematically compensate price increases on these most purchased products with vouchers. The products include both manufacturers’ brands and Leclerc’s private label such as Marque Repère, Eco+ and Nos Régions ont du Talent.

Aldi Nord is adding local specialties to its own brand range of baked good in order to offer customers more proximity to the products on the shelf. The retailer will cooperate with small village and larger artisan bakeries that are already established regionally.

Tesco accelerates the switch to loose fruit and vegetables, refillables and reusable products in its stores. It set a 2025 target of removing plastic from a total of five billion products sold.

Albert Heijn is expanding its own brand range of international cuisine with 125 new products. Novelties include meals, exotic spices and fresh packages with new flavours from Asia, the Middle East, North Africa and Middle and South America.

Motatos, a Swedish surplus online grocer, launched in the UK to rival Aldi and Lidl. The retailers sells ambient food and fmcg that might otherwise go to waste and claims it’s able to offer savings of up to 60%.

Caprabo introduces “bring your own container” to its 137 stores that have fresh produce counters. Customers can take home the fresh products from the fishmonger, butcher and delicatesse departments in their own container.

Lidl has enriched its eco-sustainable offer in Italy with the Love your Planet sunscreen range, under the umbrella brand Cien Sun. The products are of vegetable origin and free of harmful chemicals.

Market Research 
Global grocery e-commerce grows

The annual Omnichannel report from Kantar reveals that online grocery sales grew more than 15% in 2021, in a global grocery market which grew 2.1%. The total market growth of 2.1% is in line with the average pre-pandemic growth, and means the market held on to the double-digit growth gains it made in the 2020 phase of the pandemic. The Western Europe market declined 0.2% as purchase patterns began to normalise with fewer lockdowns.

Supermarkets/hypermarkets remain the dominant channel for FMCG sales globally, however with growth of just 0.1% its share of sales fell to 51.4%, from 52.4% in 2020 and 53.1% in 2019.

E-commerce now accounts for a 7.2% share of global grocery spend. The growth is driven by Asia, which comprises 45% of all online FMCG sales, almost double that of the U.S.’s (4.8%) or Western Europe’s (6.9%) contribution to the overall share.

IRI: PL loyalists = NB loyalists

An IRI report shows that private label loyalists (shoppers that buy them over 75% of the time) now equal those of national brands in all key European markets. Private labels account for €194 bn, making up 35% of total FMCG value sales in Europe as the gap narrows between national brands, the researcher revealed.

Around 50% of shoppers switch between both, with most now appearing in the mid-income bracket, but also with high-income cohorts in France and Germany. Private label shoppers are looking beyond price. Where they intend to spend more or less in 2022 and beyond, is in line with wider category trends.

According to IRI, private labels now occupy a global category footprint of 16.5% of FMCG value sales. Driven by several growth factors, private labels are said to offer the same or better quality, affordability, healthier options, consumer acceptance and portfolio stratification into premium.

Private labels have become a substitute in several growth categories for many national brands, having undergone significant transformation that focusses on quality, trust, environmental credentials, innovation and delivery on claims.

From their humble, discount-focussed beginnings, over the past five years private labels have become “formidable competitors” to the brands, despite the drop in the pandemic, said Ananda Roy, SVP, Strategic Growth Insights, IRI International and author of the report. 

PLMA News 
The industry regathered at PLMA’s “World of Private Label”

PLMA’s 2022 “World of Private Label” International Trade Show, held 31 May – 1 June in Amsterdam, was an overwhelming success.

The world’s largest private label exhibition attracted more than 15,000 buyers and visitors from 120 countries.

The industry confirmed the importance of Connect. Source. Grow. which was the theme of this year’s trade show. Back in full force, the buzz of business talks, the shaking hands, the quest for innovation and new products and the strengthening of relationships was widely seen.

“We are proud to support the industry with a platform for sourcing and interaction in a one-on-one seller to buyer environment,” said Peggy Davies, president of PLMA.

Events 
26-27 October 2022

PLMA’s Executive Education Programme
Nyenrode Business Universiteit, The Netherlands