By George Anderson
A new report released by ACNielsen, The Power of Private Label 2005, shows store brands are capturing a greater share of sales worldwide. Between 2003 and 2005, private label brands grew at a five percent rate compared to two percent for manufacturer brands.
Europe remains the leader in terms of private label penetration. Private label accounted for 23 percent of sales across 17 European markets. The top five were Switzerland (45 percent), Germany (30 percent), Great Britain (28 percent), Spain (26 percent) and Belgium (25 percent).
|
Product Area |
Private Label Share |
Private Label Growth |
|
|
1 |
Refrigerated Food |
32% |
9% |
|
2 |
Paper, Plastic & Wraps (PPW) |
31% |
2% |
|
3 |
Frozen Food |
25% |
3% |
|
4 |
Pet Food |
21% |
11% |
|
5 |
Shelf-Stable Food |
19% |
5% |
|
6 |
Diapers & Feminine Hygiene |
14% |
-1% |
|
7 |
Health Care |
14% |
3% |
|
8 |
Non-Alcoholic Beverages |
12% |
3% |
|
9 |
Home Care |
10% |
2% |
|
10 |
Snacks & Confectionery |
9% |
8% |
|
11 |
Alcoholic Beverages |
6% |
3% |
|
12 |
Personal Care |
5% |
3% |
|
13 |
Cosmetics |
2% |
23% |
|
14 |
Baby Food |
2% |
13% |
In North America, private label accounts for 16 percent of sales and is growing at a healthy annual rate of seven percent.
Within individual product categories, refrigerated foods are now the largest private label category worldwide with a 32 percent share, having replaced paper, plastic and wraps in the top spot.
The growing acceptance of refrigerated private label is due to the increasing emphasis retailers are placing on developing premium items while moving away from the commodity mentality of the past, according to Jane Perrin, Managing Director, ACNielsen Global Services and sponsor of the ACNielsen Executive News Reports.
"Strategically, retailers worldwide seem to be placing more and more of an emphasis on branding and marketing their private label wares to match the lifestyles and values of their shoppers," said Ms. Perrin in a released statement. "From the Tesco Healthy Living range of products to Loblaw's President's Choice expansion into organics and health-oriented lines, retailers are expanding their brands far beyond a singular focus on low price points. We are even seeing retailers leverage the equity of their private label brands outside of fast-moving consumer goods into areas such as personal finance, insurance and telecommunications.
The simple fact, supported by ACNielsen's research, is that consumers increasingly see private label as a viable and, in some cases, preferable alternative to manufacturer brands. Sixty-eight percent of consumers interviewed by ACNielsen either slightly or strongly agreed with the statement: "Private Label brands are a good alternative to other brands."
"Just how far retailers can grow private label will be the center of much industry debate," said Ms. Perrin. "Whether worldwide shares will reach those of Switzerland (45 percent), or even if high share markets like Switzerland have reached their peak, is yet to be seen."
Moderator's Comment: How is the activity of private label in Europe and elsewhere affecting what is happening in the U.S.? Where do you see the private label business (food and beyond) going in the U.S.? - George Anderson - Moderator