Private Label: Market Overview Innova Market Insights August 2010 Where are the Private Label opportunities? 2 Where are the Private Label opportunities? In-line with Health & Wellness Trends Innovating in Niche Areas Matching Competitors Pushing Premium Boundaries Knock-offs and Price Comparisons 3 In-Line with Health & Wellness Trends 4 Global Growth: Organic-> Natural-> Traditional-> Sustainable There is growing trend in the food industry for all things “natural” Consumers demanding natural-> healthy Organic lends itself to the natural trend Traditional farming methods: – – – without pesticides more natural food sometimes more labour intensive - demands premium pricing Sustainability & Environment: – traditional methods more environmentally friendly Claims North America West Europe % Change % Change 2007 2008 2009 (2007-2009) Health launches 2007 2008 2009 (2007-2009) Health launches Natural 20.2% 23.6% 25.2% +5.0% 8.7% 10.8% 11.3% +2.6% No Additives/ Preservatives 12.7% 15.2% 16.2% +3.5% 24.8% 32.4% 35.2% +10.4% 5 Health Messages are Everywhere 6 Company Launches Dominated by Health Claims Health Claims – % Product Launches 2008 2009 % Change Danone 77.1% 78.3% +1.2% Nestle 45.3% 48.0% +2.7% General Mills 56.8% 63.0% +6.2% Kellogg 57.1% 65.2% +8.1% Health Claims – % Product Launches 2008 2009 % Change Marks & Spencer 42.4% 67.0% +24.6% Carrefour 49.3% 39.4% -9.9% Albert Heijn 82.0% 78.8% -3.2% Safeway 42.6% 47.3% +4.7% 7 Private Label Mainstream Organic Switzerland, COOP France, Monoprix UK, Waitrose Germany, Rewe Netherlands, Albert Heijn France, Carrefour Switzerland, Migros UK, Marks & Spencer 8 Organic Differentiation Dutch supermarket Albert Heijn have launched a “puur and eerlijk” (pure and honest) brand. These products are produced, grown or sourced with extra care for people, animals, nature or the environment. AH pure & honest is comprised of the following product categories: AH pure & honest organic, fairtrade, sustainable catch (fish), free-range meat and ecological cleaning products. AH Puur & Eerlijk Fairtrade Rooibos met Specerijen: Pure and Honest Fairtrade AH Puur en Eerlijk Duurzame Visvangst Rooibos Tea with Spices Variatie met Broccoli en Kaas: Fish Fillet with Broccoli & Cheese AH Puur & Eerlijk Biologische Macaroni Grande: Pure & Honest Organic Macaroni Grande 9 Increase in PL Launches with Ethical Claims 10 Offering Sustainable Choices Sustainable farming practices followed for private label products. 11 The Importance Of Cleaner Labels With the natural trend, there are more and more products with claims stating, for example “no artificial colors, flavors or preservatives”. This type of claim is being used as a selling point to consumers and is boldly displayed on the front of the packaging. +1.8% +0.6% -1.4% 12 Total Transparency For Natural Appeal Only natural ingredients Netherlands: AH Albert Heijn Alleen met Natuurlijke Ingredienten Hollandse Gehaktbal met Spercieboontjes: Dutch Meat Ball with French Beans and Potatoes, in Gravy Sauce 13 Sense of Simplicity: Back to Basics Complex and stressful times are calling for simpler products, which is why Sense of Simplicity tops our trend list for 2010 The downturn is making people nostalgic for simpler times, and simpler foods. The interest in “back to basics” has driven interest in natural and clean-label foods More natural ingredients are on the rise, including natural sweeteners extracted from source such as: – apple – agave – maple syrup 14 Sense of Simplicity: Homemade Using the word “homemade ” or “homestyle” in the promotion of new products is on the rise 15 Real Authenticity: The Face Of Europe Is Changing It is no longer enough to simply create a product with a regional positioning: the product should be based on ingredients from that region and ideally even be produced there With the growing number of immigrants and a rising interest in authenticity, regionally-produced foods will undoubtedly be on the rise Ethnic and exotic products have become more specific. Mainstream Indian style products shifted from being merely Indian, to indicating the region of India where the product originated 16 Real Authenticity UK: Sainsbury's Taste the Difference Israeli Couscous & Nanjing Black Rice. A blend of Israeli couscous, black rice, puy lentils, edamame beans, and red peppers, with a chilli and soy dressing. UK: Marks & Spencer Messicani. Authentic Italian pasta, made and air dried in the Italian Alps by the Felicetti family, using selected Italian wheat and a bronze die for a rough texture that picks up every drop of sauce. 17 Inherent Nutrition: Keeping It Simple With Ingredients France: Casino Ondilege Mousse Aux Fruits PecheMangue: Yogurt with Peach & Mango Mousse Flavor. Contains 50% fruits. These dairy specialties contain sugars which are naturally present in milk and fruit. 0% fat. 0% sugar. Netherlands: AH Albert Heijn Water & Fruit Rood: Fruit Juice with Red Fruit & Water. With 9 sorts of fruit. 18 Healthy Soil, Healthier Vegetables Selenium enhanced soil could hold great potential for better health. UK: Marks & Spencer Young Super Spinach. Young super spinach grown in selenium enhanced soil. Fresh and prepared. Rich in vitamin A. Natural source of calcium. Grown in selenium rich soil. Selenium is an essential mineral which is important for a healthy immune system. Washed, prepared, and ready-to-cook. 19 Offering Healthy Alternatives South Africa: Woolworths Slimmer's Choice Kerala Chicken Curry with Basmati Rice. Low fat and kilojoule controlled. Eat well. This product represents a better choice for dieters. It is low in fat and kilojoule controlled, a convenient, satisfying and delicious way to lose weight. USA: Archer Farms Simply Balanced Hawaiian Style Veggie Patties. Hawaiian style frozen whole grain veggie patties made with a brown and wild rice blend, bell peppers, mangoes, pineapples and coconut milk. Simply nutritious. Simply delicious. Contains 100 calories per serving. Contains 2.5g fat per serving. 0g trans fat. Contains 4g sugar per serving. Contains 5mg sodium per serving. No artificial flavors or synthetic colors. Contains 6g protein per serving. 20 Healthy Innovation Private label offers consumers many healthy, innovative choices. USA: Trader Joe’s Shortbread Blueberry Bites with Almonds and Omega-3’s Brazil: Carrefour Viver Light Quiche Integral Legumes: Light Wholegrain Quiche with Vegetables. "Viver" is a health line product from Carrefour brand. 26% less calories. This is a microwavable product. 63% less saturated fat. Source of fiber. UK: Aldi Optifit Liquid Breakfast Probiotic Yogurt Drink with Apple and Mango Flavors with Added Vitamin C 21 Fresh Daily Offerings Combining freshness, health and convenience on a daily basis. 22 Innovating in Niche Areas 23 Innovating By Addressing Allergies Private Label has led the way with their “free from” ranges. Recognised a gap in the market. Gluten free product launches in particular, have shown significant growth in recent years. France: Auchan Mieux Vivre Spaghetti A La Farine de Mais: Spaghetti Made From Corn Flour. Gluten free. UK: Sainsbury's Freefrom 5 Muesli Bars. Five gluten, wheat and dairy free muesli bars with mixed dried fruits, flaked almonds and hazelnut nibs. 24 Catering For Individual Needs Identifying demand and supplying the solution. Cooking For One Netherlands: Albert Heijn 1 person Japanese Sukiyaki Wok Dish Carb-Conscious Dieters USA: Kroger Carb Master Strawberry and Banana Flavored Yogurt. Vitamins A and D and calcium added. Net carbs 3 grams. 25 In-Store Bakery Innovation Booms Hungary: Fitberry Vorosszolos Kenyer: Bread Loaf with Red Grape Concentrate and sunflower and caraway seed. The red grape extract contains flavonoids which has a significant antioxidant effect. Germany: VollkornBrot. Wholemeal bread with sunflower seeds. UK: Marks & Spencer Green Olive Ciabatta Rolls Netherlands: C1000 Melkbroodjes. Milk Bread for Children USA: Safeway Premium Wheat Hot Dog Buns 26 Wowing With Flavours Unique flavours represent an opportunity to stand out from the rest on the shelf. France: Auchan Dark chocolate with violet. Greece: AB Tangerine Sanguine Carrot Juice USA: Trader Joe's Rice & Bean Chips with Adzuki Beans USA: Safeway Select Mandarin Orange Naturally Low Fat Sherbet 27 Innovate By Flavour Netherlands: AH Albert Heijn Kauwgomballen Smaak Thee: Herbal Tea with Chewing Gum Flavour Canada: President's Choice Ice Cream Shop Flavors Banana Split Ice Cream Australia: Woolworths Chicken Sausages: Mango & Sweet Chilli South Africa: Woolworths Pomegranate Flavoured Turkish Delight 28 New Texture & Flavour Experiences France: Casino Ondilege Mousse Aux Fruits Peche-Mangue: Yogurt with Peach & Mango Mousse Flavor UK: Snackrite Be Light Satin Crunch Thai Sweet Chilli Flavour. Six packs of Thai sweet chilli flavored crisps. 70% less fat. Less than 2% fat per pack. Only 80 calories per 20g pack. No artificial color, flavors or preservatives. Suitable for vegetarians. Belgium: Delicieux Aardbeien sorbet Sorbet Fraises: Strawberries Sorbet. Strawberries sorbet, a refreshing sorbet for one intense strawberry experience. 29 Exclusive Ingredients Offering the consumer something extra with special ingredients. Canada: President's Choice Dine-In Tonight Porcini and Truffle Tortelloni. A 340g box of frozen delectable porcini and truffle tortelloni. The exquisitely rich tasting filling contains wild porcini mushrooms and truffle oil, tucked inside delicate eggpasta pillows. Good for 2 servings. UK: Optifit Multi Fruit 8 Probiotic Yogurt Drinks. Eight bottles of prebiotic and probiotic multi fruit flavored yogurt milk drink with oligofructose, l-carnitine, and vitamins C, E, and B6. Australia: Specially Selected Mountain Muesli. Muesli with treacle, honey, almonds, pepita seeds, and raisins. 30 New Product Ideas USA: Market Pantry Mozzarella Double Twist String Cheese. Twelve individually wrapped mozzarella double twist (yellow and white) string cheese. Great for snacking. South Africa: Woolworths Breakfast Fruit Booster. Ready-to-eat dried bananas, apricots, and raisins in a plastic bag. UK: Tesco Apple & Blackcurrant Juicy Water. 75% fruit juice + 25% water = 100% natural. Australia: Coles Hot Smoked Salmon Portion 31 Plain Fruit & Veggies Can Stand Out France: Carrefour Carottes Rapees Grated Carrots. Contains natural beta-carotene. South Africa: Woolworths Organic Easy Peelers 32 Packaging Advantages Which Stand Out UK: Sun Quench Fruity Shots Orange. Six bottles of orange flavored drink with squirty sports cap. With added vitamins. No artificial colors or flavorings. Suitable for vegetarians. 10% fruit from concentrate. Netherlands: Plus Tuinerwten Extra Fijn Vriesvers: Frozen Extra Fine Fresh Garden Peas in a cardboard box with see-through aperture. 33 Speedy Step-by-Step Accommodating single person households with cooking for 1 dishes. Netherlands: AH Albert Heijn 1 Persoons Wok Schotel Japanse Sukiyaki: Stir & Fry Meal Japanese Yukiyaki. Ready to stir and fry Japanese sukiyaki meal with chicken breast, white rice, Chinese cabbage and sauce, separately held in a PET dish. With ingredients ready prepared and simple step-by-step instructions, the consumer can have a freshly cooked meal from the wok in not much more time than a microwave ready meal. 34 Big Idea: Small Serves “Small meal small salad small soup” is a range from AH which includes ready salads, ready meals and soups, all in small servings (280g). Can be consumed for snacks or main meals. AH Albert Heijn SmallMeal SmallSalad SmallSoup Beef Japanse Teriyaki - Japanese Teriyaki Meal 35 So Easy With Steaming Microwave 750W 5 ½ minutes or 1000W 4 ½ minutes with innovative steam valve. Steaming is associated with healthy cooking. Netherlands: AH Albert Heijn Stoommaaltijd Tilapiafilet Kormasaus - Steam Dish Tilapia Fillet with Korma Sauce. Contained in a special plastic microwave dish, with a unique steam valve. Ready to heat in microwave. 36 Clever Use Of Secondary Packaging The steam valve which is unique to the product is highlighted with a clever aperture in the secondary package, drawing the consumer’s attention to it. France: Auchan dos de Hoki-Hoki with Potatoes 37 Secondary Packaging Colour Using secondary packaging to convey the meal theme. UK: Waitrose Crab & Chilli Linguine. Prime Scottish crab dressed in a sunblush tomato and chilli oil, served on a bed of egg pasta in a plastic bowl held in a cardboard sleeve. UK: Sainsbury's Espana Paella. Spiced rice seasoned with smoked paprika, garlic and white wine, mixed with red peppers, chorizo, chicken and prawns. 38 Sub-Branding To Convey Message UK: Sainsbury's Be Good To Yourself Reduced Fat Cherry Cheesecake Australia: Woolworths Naytura Rice & Corn Chips: Sweet Chilli & Sour Cream Flavor. Suitable for vegetarian. No added artificial colors, flavors, or preservatives. Gluten free. UK: Waitrose Cooks' Ingredients. A Measure of Italian Cut Mixed Peel for Baking Australia: Coles Market Place Australian Ginger Paste 39 Seasonal/Limited Edition Offering the consumer a unique flavour and experience for a limited time. South Africa: Woolworths Limited Edition Moroccan Lamb & Lentil Soup Netherlands: AH Albert Heijn Seizoens Vla Appel-Kaneel: Apple Cinnamon Custard USA: Publix Premium Limited Edition Monkey Business Banana Ice Cream 40 Private Label Seasonal Launches 41 Private Label Profiting From Upcoming Events South Africa: Woolworths Soccer Champion Shapes Pasta South Africa: Woolworths England and Argentina Money Box World Cup Soccer Selection Jellies 42 Novel Niches UK: Sainsbury's Football Boot Money Bank with Foiled Milk Chocolate Balls UK: Waitrose Mini Meringue Shells UK: Marks & Spencer Risotto with Garden Vegetables. A plastic bag of authentic risotto mix with tomatoes, garlic, aubergine, courgettes, red peppers, and green peppers. Canada: President's Choice High Protein Ultra Shake Meal Replacement: Vanilla Flavor. High protein. Lactose free. Excellent source of calcium. Contains 24 vitamins and minerals. 50% more protein than PC Ultra Shake Meal Replacement. Provides all the nutrition of a complete meal. 43 Matching Competitors 44 Tesco Competes With Discounters At the end of 2008 UK retailer Tesco launched a new range of 350 products under new discount brands in 10 categories to compete with Aldi. Similar packaging and price scales to Aldi products. Tesco also cut prices on existing Tesco and branded products. Tesco or Aldi? 45 Carrefour Fights Back in France Carrefour has launched a new range of 400 low cost food and non-food items and is promoting them via a dedicated Carrefour Discount website. The launch of 'Carrefour Discount' is the company's latest initiative to defend itself against falling spending from the increasing cost-sensitive consumer. As well as providing product information on each of the 400 items in the Carrefour Discount range, the website provides low cost recipe ideas and explains in detail its quality promise. 46 Carrefour Goes For Clean Look www.carrefourdiscount.com is a dedicated website to promote its new range of low cost own brand products. Clean- looking packaging with simple, yet effective graphics. color on packaging makes it look “less cheap” and more enticing. Carrefour’s discount range reinforces their brand, which is in contrast to Tesco, who have chosen multiple new discount brand names and packaging styles. 47 Getting Back to Basics Offering more value in basic lines can win over consumers on a budget but still wanting a choice. Discounters do not offer much choice. 48 PL Copy Cats UK: Asda Loaded Cookies & Cream Ice Cream UK: Asda 2 Chapattis: 2 Flatbreads. Two unleavened Indian style flatbreads. UK: Tesco Crunch Duo Mix Banana Choc Crunch. Deliciously thick and creamy vanilla flavored yogurt with a separate portion of crunchy milk chocolate coated cornflakes. Australia: Coles Chocolate Mint Supremes 49 Pushing Premium Boundaries 50 Differentiating Through Premium Premium is an area where private label in recent times has excelled -providing the consumer with excellent quality Excellent, select, choice etc are all examples of premium ranges. 51 Provenance = Premium 52 Many Fine Dining Options Consumers staying in to save money may take advantage of private label premium dining options. 53 Restaurant Inspired Products Netherlands: Plus Appetit Pappardelle Dried Pasta UK: Menu from Waitrose Mains for 2 Shepherd's Pie. Slow-cooked minced lamb, carrots, celery, mashed potato. UK: Tesco Finest Oriental Duck & Plum Noodle Bowl. Description : Egg noodles tossed with shredded aromatic duck, pak choi, and spring onion, with a rich, sweet, plum and five spice sauce. 54 Following Foodservice Angus beef has been promoted heavily in foodservice (eg McDonalds angus beef burgers)- private label follows trend. UK: Asda Extra Special 2 6oz Aberdeen Angus Beef Burgers Canada: President's Choice Angus All Beef Frankfurters 55 Packed For Effect Beautiful packaging make premium private label products more appealing. 56 Knock-offs and Price Comparisons 57 Special K EUR 2.49 EUR 12.97/KG Spain: El Corte Ingles Fit Way Copos de Arroz y Trigo Integral Tostadas con Frutas Rojas: Rice & Wholemeal Wheat Toasted Flakes with Red Fruit EUR 2.69 or EUR 8.97/KG Netherlands: AH Albert Heijn Special Flakes: Breakfast Cereal with Red Fruits EUR 2.49 or EUR 8.30/KG 58 Muller Yogurt Germany: Real Knick-Jogurt with Chocolate and Vanilla Balls 0.39 EUR or 2.23 EUR/KG Germany: MullerJoghurt Ecke with Chocolate Balls 0.49 EUR or 3.27 EUR/KG 59 Magnum (Almond) Germany: Real Mattea mit Mandel 1.99 EUR or 4.15 EUR/L Launched Internationally Magnum Almond 4.99 EUR or 14.51 EUR/KG 60 Ferrero Nutella Greece: Ferrero Nutella Chocolate & Hazelnut Spread 2.28 EUR or 5.70 EUR/KG Netherlands: Spar Hazelnut Spread 1.65 EUR or 4.12 EUR/KG Hungary: Auchan Pate a Tartiner aux Noisettes et au Lait Ecreme: Hazelnut Spread 1.67 EUR or 4.18 EUR/KG 61 Functional Copy Cats Private label functional products with the same active ingredients (plant sterols) but come with a cheaper price tag. 3.18 EUR 4.28 EUR 4.97 EUR 5.19 EUR Price/Kg 62 Summary Private Label product launches numbers are growing annually, with the most product launch activity happening in the UK, USA and France. Difficult economic times have called for some private label brand restructuring and deep discounting in order for retailers to compete with discounters such as Aldi. Private label also has been innovative in its own right, with super premium offerings, innovating in niche areas and offering comparable and sometimes better products than their branded competitors. 63 THE END Send me an email if you would like a copy Glen.Wells@innova-food.com.au 64