Tag Archives: private label

What Brands Have To Do

Posted on October 11, 2010 by Pavone Food

The growth in private label and retailers’ commitment to SKU rationalization is the perfect storm for national brands.  It’s a challenge to step up–to innovate and differentiate.

Shoppers consider product quality, taste, convenience and value when deciding between food and beverage items.  Brands that don’t stand out in several of these categories are in trouble; they’re probably going to lose to private label or be eliminated by the retailer or both.

In order to fend off the private label onslaught, brands have to 1) stand for something 2) listen closely to consumers and 3) be a solution.

Maybe your product is values-driven (i.e., you’re using exclusively sustainable ingredients and processes while limiting your carbon footprint and supporting fair trade).   Maybe your product represents extreme luxury and decadence by sourcing only the world’s finest (fill in the blank:  chocolate, cheese, century-aged cognac etc.) Quite possibly your product has the reputation of being trusted by consumers for its consistent quality and reliability. Maybe your product is simply fun, synonymous with a good time.

Knowing what your product stands for is a start, but what’s essential is that consumers know.  Effective communication with them is key.  Read more...

Posted in General | Tagged brands, competition, national brands, private label | Leave a comment

Private Label Predictions

Posted on October 8, 2010 by Pavone Food

The growth in and performance of private label products these days is staggering.  Private label units are up 1.7 billion (6.4%), and national brand units are down 1.5 billion (1.7%)[1].  The numbers have been increasing steadily since 2006, when 16.6% of SKUs were private label.  In 2009, private label products accounted for 24.7% of grocery stock[2].  Sales of store brand units reached an average 22% share across all departments, making gains in all but dairy[3].   According to the study released by Deloitte on Monday, even more gains are predicted by both consumers and retail executives.

Why?  What’s behind the surge?

Retailers have committed to improving the quality of private label products due in large part to the respectable profit margins to be gained.  Store brands now account for 90% of all supermarket gains with sales reaching $55.5 billion.[4] Retailers have realized the opportunity and are stepping up their game. Ahold USA recently announced a broad consumer taste test initiative that holds their brands up against national brands; those that don’t perform will be reformulated or eliminated.

“The bar has been raised,” according to Ahold’s Melissa Smith-Hanzen[5] and Consumer Reports concurs.  Last month, the publication released taste-test results that demonstrated store brands’ equality to national brands in eleven match-ups and superiority in three scenarios.  Read more...

Posted in General | Tagged brands, CPG, private label, store brands | 2 Comments