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Euromonitor International
The rise of private label in savoury snacks
Presented by Lamine Lahouasnia – Head of Packaged Food Research
@SNACKEX #SNACKEX
@Euromonitor
@LLahouasnia
London
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Definition of snacks
Europe: The Size of the Savoury Snack Market in 2012
Tortilla/Corn
Chips 4%
Pretzels 7%
Chips/Crisps
23%
Extruded Snacks
42%
EUR 17 billion
Nuts 24%
What’s Really Driving Private Label?
Image courtesy of Jeff Eaton
How far has private label come in
packaged food?
600
22%
500
21%
400
20%
300
19%
200
18%
100
17%
-
16%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Private Label
Branded Food
Private Label Share
Private Label Share
Retail Value RSP - € billion
Packaged Food: Branded vs. Private Label in Europe,
2003-2012
So what about snacks?
18
22%
15
21%
12
20%
9
19%
6
18%
3
17%
-
16%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Private Label
Branded Food
Private Label Share
Private Label Share
Retail Value RSP - € billion
Snacks: Branded vs. Private Label in Europe,
2003-2012
How private label snacks fits in with
the rest of packaged food
Private Label Value Share
Europe: Private Label Penetration in Packaged Food,
2012
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Baby food
Snacks
Chilled processed
food
What has driven the rise of private
label food in Europe?
Retail consolidation
The success of modern retail
Is there a choice?
Economic Environment
Financial squeeze
Can I get the same for less?
Trust in private label
Looks the same, tastes the same
Is it the same?
Battle for industry consolidation:
Germany
Top 5 Companies’ - Retail Value RSP
% of the Market
Germany: Consolidation in Packaged Food and Grocery
Retailing, 2004-2012
70
60
50
40
30
20
10
0
2004
2005
2006
2007
Packaged Food
2008
2009
2010
Grocery Retailers
2011
2012
Battle for industry consolidation:
Poland
Top 5 Companies’ - Retail Value RSP
% of the Market
Poland: Consolidation in Packaged Food and Grocery
Retailing, 2004-2012
70
60
50
40
30
20
10
0
2004
2005
2006
2007
Packaged Food
2008
2009
2010
Grocery Retailers
2011
2012
Battle for industry consolidation:
Russia
Top 5 Companies’ - Retail Value RSP
% of the Market
Russia: Consolidation in Packaged Food and Grocery
Retailing, 2004-2012
70
60
50
40
30
20
10
0
2004
2005
2006
2007
Packaged Food
2008
2009
2010
Grocery Retailers
2011
2012
So, who has the upper hand?
70
60
40
30
34%
50
25%
Top 5 Companies’ - Retail Value RSP
% of the Market
Industry Consolidation: Packaged Food vs. Grocery
Retailers, 2004-2012
20
10
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
The relationship between retail
consolidation and private label
50
80
40
60
30
40
20
20
10
0
0
Eastern Europe
Packaged Food
Grocery Retailers
Western Europe
Private Label Penetration
Private Label Penetration - %
100
SV
LT
ET
SK
CS
HU
LA
RO
PL
CR
BU
BS
RS
UK
BL
RU
MD
GG
AT
DE
FI
CH
SE
GB
DK
FR
NL
IE
BE
NO
PT
ES
IT
GR
TR
Share of the Top 5 Companies - %
Europe: Consolidation in the Packaged Food and Grocery
Retailing Industries, 2012
Private Label Priorities for Snacks
Image courtesy of Geoff Lane
Private label positioning in snacks:
Tesco
Chips/Crisps: Private Label Price Positioning, 2013
Tyrell's
Red Sky
Kettle Select Vegetable
Kettle Chips
Burts
Jack Pots
Nandos
Real Crisps
Kettle Ridge Chips
Tesco Finest
Walkers Crinkles
Walkers Extra Crunchy
Walkers Sensations
McCoys
Tesco
0.00
Creating the private label
space
Undercutting branded
competition
0.50
1.00
1.50
Price per Unit - £
2.00
2.50
Private label positioning in snacks:
Asda
Chips/Crisps: Private Label Price Positioning, 2013
McCoy's
Kettle Chips
Ruffles
Walkers Crinkles
Mackies
Lays
Asda Extra Special
Asda
Asda Chosen by You
Crowding out the private
label space
Hunky Dory
Walkers Extra Crunchy
Walkers Sensations
-
0.50
1.00
1.50
Price per Unit - £
2.00
2.50
Private label positioning in snacks:
Sainsbury’s
Chips/Crisps: Private Label Price Positioning, 2013
Tyrell's Vegetable Crisps
Walkers Extra Crunchy
Tyrell's
Red Sky
McCoy's
Kettle Chips
Sainsbury's Taste the Difference
Creating the private label
space
Walkers Sensations
-
0.50
1.00
1.50
2.00
Price per Unit - £
2.50
3.00
3.50
Private label positioning in snacks:
Waitrose
Chips/Crisps: Private Label Price Positioning, 2013
Tyrell's
Burts
Walkers Crinkles
Walkers Extra Crunchy
Red Sky
Kettle Chips
Walkers Sensations
Corkers
Waitrose
Creating the private label
space
Kettle Ridge Chips
0.00
0.50
1.00
1.50
Price per Unit - £
2.00
2.50
Packaging imitation crucial for
economy private label snacks
Albert Heijn
Esselunga
Carrefour
Packaging type
Colour
Imagery
Cross category ranges needed for
standard and premium private label
What are the priorities for private
label snacks in Europe?
Domination of the economy ranges
Price to be primary offering
Imitation is key
Premium ranges to be next challenge
Cross category range
More of a priority than standard
requirement
segment for retailers
Specialty ranges also becoming popular
Initial focus on health and
Future likely to see
wellness
establishment of ethical ranges
What the Future Holds for Private Label Snacks
Image courtesy of Femto
So where now for private label snacks?
18,000
22%
15,000
21%
12,000
20%
9,000
19%
6,000
18%
3,000
17%
-
16%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Private Label
Branded Food
Private Label Share
Private Label Share
Retail Value RSP - € billion
Snacks: Branded vs. Private Label in Europe,
2003-2012
A perfect storm is brewing for private
label in Europe
Disposable incomes stagnating
Retail modernisation to continue
Grocery retailers to prioritise PL
Trading down likely to return
Europe: Outlook for Disposable Incomes, 2012-2017
7
6
CAGR %
5
4
3
2
1
0
-1
GG UK RU LA LT RO BU BS ET BL PL MD RS CR CS SV HU SK TR NO SE DK IE CH FI AT DE GB FR ES GR PT BE NL IT
Eastern Europe
Western Europe
Modern retail is everywhere
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2002
2012
SV
ET
LA
LT
SK
CR
HU
CS
PL
RU
UK
BU
RO
BS
RS
MD
BL
GG
DK
FI
NO
AT
GB
IE
NL
DE
SE
FR
CH
PT
ES
IT
BE
GR
TR
Modern Grocery Retail Share
Europe: The Rise of Modern Grocery Retail, 2002/2012
Eastern Europe
Western Europe
Where to invest…
Sales
Growth
Margin
Growth
…when expansion is no longer an
option?
Selling Space - Year on Year Growth
(%)
Western Europe: The Slowdown in Grocery Expansion,
2004-2012
20
10
0
-10
-20
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Aldi Group
Carrefour SA
Schwarz Beteiligungs GmbH
Tesco Plc
Average
Is it inevitable?
Shapes
‘Pester
Power’
Event
association
Party food
Flavours
Nontraditional
Health and
Wellness
Healthier
alternative
Innovation
Marketing
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