Innovating, exploring and engaging: these are the watchwords that private-label (PL) brands must embrace to keep growing. On one hand, private labels now boast a significant global share of new product launches in the mature food & beverage markets of Europe (31%) and North America (33%); on the other, the pace of innovation has slowed in recent years.
According to a study by market intelligence agency Mintel, to make the most of their opportunities, PLs should look beyond commodities and focus on sophisticated high-end products. Over the years, retail brands have evolved, and positioning based on low price alone is no longer enough. Consumers are now ready to assess brands’ value propositions in the round. Therefore, quality and raw-material sourcing, safeguarding the environment, working with local communities, and promoting a balanced diet and a healthy lifestyle are becoming key ingredients in how consumers evaluate PL offerings.
Indeed, PL has now become an integral part of the overall retail experience: in Germany, 72% of shoppers choose one chain over another because it offers the PL products they prefer; similarly, 70% of US consumers say that the quality of the private brand reflects the overall quality of the retailer.
What, then, are the new directions to explore in order to keep growing? The answer, according to Mintel, is to innovate, tell your story, and explore new niches in faster-growing markets or arenas with greater potential (such as meal kits).
Whatever the future may hold for PLs, the market will continue to produce surprises, like the San Francisco start-up that launched an online store in 2017 where all the products are unbranded and priced $3 – called, appropriately enough, Brandless.
