Strategy Briefing

USA Flag The New Face of Private Label: Global Market Trends to 2018

| Pages: 103

Price: US$1,200

About this Report

Today’s private labels – unlike the generic offerings of the past – are carefully managed and marketed in order to improve the retailer’s competitive edge. Indeed, many are now seen as brands in their own right. This global report examines new approaches to the development of private label fmcgs in the face of an increasingly competitive grocery landscape. It also looks at the exciting prospects for this sector, as the frugal mindset persists and emerging markets remain virtually untapped.

Consumers seek value when times are hard

Despite some ups and downs, in absolute terms the private label market experienced robust growth over the 2007-2012 period, with value sales in the selected fmcg markets growing overall by just under 1/4 to over US$350 billion. This represented around 10% of the total value of these markets combined, a share that remained stable over the review period.
Private label growth has been driven both by the expansion of large grocery retailers and the trend towards more sophisticated lines that command higher prices and margins. Indeed, the emphasis is shifting from aggressive promotion and discounting of private labels to providing better quality and a unique offer.

The influence of economic conditions on the growth of private label was reflected in the data relating to the 2007-2012 period. When the recession first hit developed economies between 2007 and 2008, private label fmcgs flourished as consumers cut expenditure drastically. In 2008, the private label market grew by almost 12% in current value terms, while real GDP increased by just 3%. In 2009, however, the private label market stagnated as the global economy went into recession, with real GDP falling by almost 1% in that year

Following a recovery in the world economy in 2010, when GDP was boosted by 5%, growth slowed to a rate of 4% in 2011. This led to a renewed increase in demand for private label fmcgs, with global sales jumping by 9% in current value. This was also partly attributable to an increase in private label prices in developed markets as a result of quality improvements, as several retailers developed premium ranges that competed directly with branded products.

In 2012, private label sales fell 1% by current value, as real economic growth slowed to around 3%. This was partly due to the response by the major brands, which sought to compete with premium private labels by running numerous price promotions and stepping up advertising.

Furthermore, with consumers no longer under as much financial pressure as they were during the recession, many of those who traded down when money was tight were able to switch back to their favourite brands. Also, with food companies in better financial positions, many invested in new products and innovative new concepts.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Delivery format

This report also includes a PowerPoint executive summary document.

PDF/Word copies downloadable from you MyPages account

Table of Contents


Demand factors

Attitudes to private label

The private label market

  • Chart 1 Private Label Shares by Fmcg Market 2012

Private label strategy


  • Summary 1 Opportunities and Challenges in Private Label Fmcgs


Advantages of private label

An evolving concept

Types of private label

Importance of private label within the product mix

  • Summary 2 Types of Private Label 2013


Economic uncertainty

Private label boosted by recession

Australians become the highest earners

  • Chart 2 Per Household Annual Gross Income by Country 2007/2012
  • Chart 3 Per Household Annual Gross Income by Country: % Growth 2007/2012

China drives growth in retail sales

  • Table 1 Store-based Retail Sales by Market 2007/2012

The modernisation of the grocery network

  • Chart 4 Grocery Retailer Sales by Type 2008/2013


Focus on growth in emerging markets

Channel reaches maturity in Western Europe

Chinese market remains highly fragmented

Russia dominated by domestic players

Penetration still low throughout rest of Asia

Turkey sees rapid modernisation

  • Table 2 Penetration of Supermarkets/Hypermarkets by Country 2008/2013

The rise of the discounters

Still strongest in Northern Europe

Poland sees most rapid growth

Discounter concept takes off in Turkey...

...And spreads to the US and Australia

  • Table 3 Penetration of Discounters by Country 2008/2013

Convenience stores

Penetration still highest in Japan

“Big four” take over convenience channel in the UK

Convenience store concept remains undeveloped in China

  • Table 4 Penetration of Convenience Stores by Country 2008/2013

Leading grocery retailers

Scale needed for private label development

Wal-Mart rules the roost

Carrefour exits discounters, while Tesco creates smaller formats

Seven & I sees rapid international expansion

Kroger remains firmly in the US

  • Chart 5 Top 20 Grocery Retailers by Market Share 2013

Retailer consolidation

US sees surge of activity

European retailers turn attention to emerging markets

Asia grocery network remains highly fragmented

  • Summary 3 Mergers and Acquisitions Among Grocery Retailers 2012-2013

International expansion

Creating a wider distribution base for private labels

Differing levels of internationalisation

French retailers have broadest reach

Discounters go further afield

  • Summary 4 International Grocery Retailers 2013


Purchasing habits

Private labels purchased by most shoppers

Urban Indians most likely to have increased private label purchase in 2013

Concept still relatively unknown in Russia

  • Chart 6 Purchasing of Private Label in the Last 12 Months, by Country 2013
  • Chart 7 Purchasing of Private Label in the Last 12 Months, by Country 2011/2013

Private labels appeal most to families

  • Chart 8 Purchasing of Private Label in the Last 12 Months, by Age Group 2013

Similar trends expected in 2014

  • Chart 9 Purchasing of Private Label in the Next 12 Months, by Country 2013

Polarisation of demand

Perception of private labels

Private label image strengthens in UK and US

Commodities seen to be of equal quality

Attitudes towards price/quality ratio

More than a third of consumers think private label can be superior

Private label perceptions weakest in Asia and the Middle East and Africa

  • Chart 10 Attitudes Towards Private Label by Region 2010


The global picture

Private label share remains steady at 10%

Consumers seek value when times are hard

  • Chart 11 Global GDP V Fmcg Private Label Growth 2008-2012

Broad sector trends

Price gap narrows

Private label share remains strongest in commodities

  • Table 5 Global Private Label Sales by Market 2007-2012
  • Chart 12 Global Private Label Shares by Market 2007-2012

National trends

The US leads the world by total value

Private label penetration highest in Switzerland

UK sees a fall in private label sales

Spain experiences sharp growth

A burgeoning sector in Russia

Emerging markets enjoy growth from a small base

  • Table 6 Leading Markets for Private Label 2007/2012
  • Table 7 Penetration of Private Label by Country 2007/2012


Packaged food, hot drinks and pet food

Chilled foods and ready meals offer most scope for private label

Premiumisation of private label pet food

Confectionery market remains dominated by big brands

Nescafé maintains its grip on the hot drinks market

Consumers remain cautious about baby food

  • Table 8 Global Packaged Food: Private Label Shares by Category 2007/2012

Soft drinks

Coca-Cola and PepsiCo leave little room for private label

Retailers experiment with more sophisticated speciality products

Price gap remains high

  • Table 9 Global Soft Drinks: Private Label Shares by Category 2007/2012

Beauty and personal care

Market remains largely in the hands of specialists

Most private labels positioned in the masstige segment

Celebrities add credibility to beauty offerings

  • Table 10 Global Beauty and Personal Care: Private Label Shares by Category 2007/2012

Home care

Private labels lack technical expertise and marketing clout

Retailers take eco-friendly angle

  • Table 11 Global Home Care: Private Label Shares by Category 2007/2012

Tissue and hygiene

Commodity nature of market lends itself well to private label

Private label penetration highest in kitchen towels

Retailers introduce more sophisticated features to nappies

  • Table 12 Global Retail Tissue and Hygiene: Private Label Shares by Category 2007/2012




  • Chart 13 France: Grocery Retail Structure 2012

Private label share highest in tissue and hygiene

Retailers find alternatives to aspartame

Carrefour enjoys success with new beauty line

  • Table 13 France: Private Label Shares by Market/Category 2007/2012



  • Chart 14 Germany: Grocery Retail Structure 2012

More than half of tissue and hygiene sales now private label

Three-tier offerings make an appearance in packaged food

Pet superstores drive growth in private label pet food

  • Table 14 Germany: Private Label Shares by Market/Category 2007/2012



  • Chart 15 Japan: Grocery Retail Structure 2012

Private label strongest in packaged food and hot drinks

  • Chart 16 Japan: Number of Private Label Packaged Food Launches by Major Retailers 2008-2012

Private label ready meals consist largely of bento

  • Table 15 Japan: Private Label Shares in Selected Markets/Categories 2007/2012



  • Chart 17 Poland: Grocery Retail Structure 2012

Penetration doubles over five years in tissue and hygiene

Private label pet food offerings mushroom

  • Table 16 Poland: Private Label Shares by Market/Category 2007/2012



  • Chart 18 Spain: Grocery Retail Structure 2012

Retailers launch basic ranges to appeal to cash-strapped customers

Private label fruit juice enjoys success

  • Table 17 Spain: Private Label Shares by Market/Category 2007/2012



The rise of Aldi

  • Chart 19 UK: Grocery Retail Structure 2012

Chilled foods dominated by private label

  • Chart 20 UK: Ready Meals Brand Shares 2012

Retailers lead the way in premium pastas

Private label nappies capitalise on the withdrawal of Huggies Pull-Ups

Private label beauty steps up a notch

  • Table 18 UK: Private Label Shares by Market/Category 2007/2012



The drive for value

Quality tests support private label

  • Chart 21 US: Grocery Retail Structure 2012

Private label dairy products are popular

US lags behind Europe in terms of ready meals

Retailers gain a strong foothold in bottled water

Wal-Mart adds to Ol’Roy brand with premium pet food

Private labels battle home care giants with eco-friendly lines

  • Table 19 US: Private Label Shares by Market/Category 2007/2012


Expanding private label ranges

Seeking parity with national brands

Discounters place highest importance on private labels

Leading supermarkets aim for a more even balance

Private label less of a focus for convenience stores

  • Summary 5 Importance of Private Labels to selected Grocery Retailers 2013

Building on the three-tier offer

Shoppers mix and match

Upscale retailers go downmarket

Discounters join the fray

Focusing on economy

  • Summary 6 Leading Grocery Retailers – Private Label Ranges by Tier 2013

The development of specialised lines

New lines focus on freshness and balanced eating

Food intolerance products still relevant

  • Summary 7 Leading Grocery Retailers: Specialised Private Label Ranges 2013

Revamping private label lines

Emphasis on quality

Asda appeal to public to help revamp Chosen By You

Upgrading basic ranges

Wal-Mart revamps Great Value

The rise of the venture brand

Reducing reliance on the master brand

Carrefour launches independent brands

Carrying brands across fascias

  • Summary 8 Leading Grocery Retailers: Venture/Fantasy Brands 2013

Taking private labels into new markets

The need to build trust

Good prospects in Eastern Europe

Focus on value in Asia Pacific

Barriers to entry in India

Launching brands abroad

Distributing private labels online

Advertising and promotion

Lack of big promotional budgets

Tesco Finest sponsors popular TV drama

French benefit from new regulations

Aldi’s successful “like brands only cheaper” campaign

Growing use of social media


Licensing and partnerships

Raising visibility and adding credibility

Celebrity endorsement

Character licensing


Emphasis on sustainability

Creating a greener image

Provenance becomes all-important

Packaging developments

No more plain packaging

Copycat strategy still used by some discounters

Innovative designs

Aseptic cartons enter the private label arena

Labelling developments

Pricing strategies

Price differential varies according to type of retailer

The gap narrows

Supplier selection

Maintaining a close relationship is essential

In-house production


Stepping up quality control

Cooperatives and buying groups


Key suppliers by sector

Cott remains world’s largest supplier of soft drinks

Food supply remains extremely fragmented

Pet food companies consolidate

Tissue and hygiene products produced by big brand companies

McBride stays at the top of its game

Some big brand manufacturers opt out of private label supply

Industry consolidation

  • Summary 9 Mergers and Acquisitions among Private Label suppliers, 2013


Trends to watch

Economic conditions will remain depressed

  • Chart 22 Forecast Global Real GDP Growth 2013-2017

Still room for expansion

Supermarkets/hypermarkets to control more than half of grocery sales by 2018

Eastern Europe will see rapid progress

  • Table 20 Forecast Share of Modern Grocery Retailers by Country 2013/2018
  • Chart 23 Forecast Global Modern Grocery Retailers by Type 2013/2018

Lines between national and retailer brands will become more blurred

Improving promotional techniques

Potential in emerging markets

Reforms may lead to growth in India

Chinese market will be slow to take off


Minimal increases in the short term

US to see gradual growth

  • Table 21 Forecast Penetration of Private Label by Country 2012/2017


Innovate, don’t imitate

Collaborate with rivals

Make good use of big data


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