Private Label:
The brands of the future
By Natalie Berg, Research Director &
Matthias Queck, Research Director
Planet Retail Ltd | May 2010
part of
Private Label: The brands of the future
Previous recessions have shown a clear correlation between private label
market share and the economy. In the past, private label sales spiked
during a recession but quickly returned to normal levels at the first sign of
an upturn. This time, however, private label is sticking.
 New frugal tendencies amongst shoppers have ignited demand for private label, in addition to a
improvements in quality, marketing and SKU rationalisation efforts which have carved out more
shelf space for these items.
 Key private label trends in Europe such as the rise of super premium, supplier transparency and
niche sub-brands will soon become evident in developing PL regions such as North America.
 Brand manufacturers must learn to co-exist with private label by adopting new brand-building
strategies, while also working collaboratively with retailers in the form of joint promotions and
planning.
 For an increasing number of retailers, the role of private label is transitioning from generic
alternative to FMCG brand. The extension of private label into services and other key areas aims
to strengthen brand equity of the retailer and drive shopper loyalty.
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Contents
1.
Global overview
2.
10 key private label trends
i.
Value lines 2.0
ii.
Rise of super premium
iii.
Still a case for standard?
iv.
SKU rationalisation
v.
Category brands
vi.
Niche segments
vii. Licensing
viii. Provenance
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ix.
Technology and private label
x.
Brand building
3.
How brand manufacturers can win
4.
Implications
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1. Global overview
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Private Label: The brands of the future
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1. Global overview
Private labels poised for continued growth
The global economic slump has accelerated the growth of private labels, in
addition to the underlying long-term shift in power from manufacturers to
retailers.
 Shopper frugality and increased focus on prices has been
playing into the hands of retailers to continuously extend
their private label lines and, as a result, penetration in
virtually all markets.
 The general trend to discounting, focus on margins and cost
control has prompted retailers to rationalise their ranges,
freeing up room for PL to underpin their price
aggressiveness.
 Higher margins at lower prices, as
well as shopper loyalty are the key
benefits of PL for retailers, even
more so in an ailing economy.
 Stagnating PL shares in a handful
of markets – UK, Germany – are
just exceptions to the rule. There,
brand promotions and price
concessions have preliminarily
halted PL growth, but are unlikely
to be sustainable.
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Coles, Australia
Trader Joe’s (Aldi Nord), USA
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