A significant shift is occurring as consumers see more quality, innovation, sustainability and trust in supermarket private label products. Private labels are also considered to have improved quality and healthier product options.
Private label sales have been consistently up and down. There was high interest in the early 2000s, then a sharp decline between 2011 and 2016 as consumers sought more variety and innovation in food products. Sales plateaued in the early stages of the pandemic and declined in 2020 and 2021 as consumers chose proven national brands. This year has seen a rise in sales due to the global increase in the cost of living. In Europe, private labels make up 35 percent of total FMCG sales. Exceptionally high rises saw sales at 47 percent in Spain and 39 percent in Germany and the Netherlands.
“Private labels may not be instantly recognisable brand names, but the fact is they don’t need to be. Retailers have re-imagined what consumers can expect from them in every supermarket aisle. They offer considerable value to shoppers who are not entirely price-driven by delivering quality, product performance and premium innovations which are comparable to the bigger, more established national brands,” said Anada Roy, International Senior Vice President, Strategic Growth Insights, IRI.
An opportunity for private label brands exists in mid-income markets, where consumers frequently switch between private and national brands. Transparent pricing and clean labelling are seen as key ways to continue customer endorsements, alongside utilising quick e-commerce platforms.
