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Could Power Brands Be the Future of Packaged Food ?

July 2015

This briefing covers the growing focus of leading food companies on power brands. These are products which have large value sales and are strongly associated with their market. Power brands are a crucial driver of revenue, as a result of their visibility within stores and reputation as category leaders. With retailers strengthening their private label lines, it is now more important than ever to own power brands, which may cause a fundamental shift in company strategies.

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Power brands are leading revenue generators for the top manufacturers

Power brands are essential to a number of food’s leading competitors. For example, sales of Heinz’s tomato ketchup account for 15% of the company’s total sales. Such brands remain too important to ignore.

Retail consolidation could revolutionise brand visibility

In Western Europe and North America, grocery retailers are highly consolidated. Wal-Mart in the US, for example, has a 26% share of retail sales, while in Germany, the top three grocery retailers account for 53% of total sales. Simultaneously, retailers are looking to rationalise their store space, which includes delisting SKUs. Manufacturers cannot afford not to be stocked by the leading retailers. This gives retailers leverage in negotiations on pricing and in-store advertising.

Private label products may make staples a no-go area for brands

Private label ranges are becoming more popular, and their market share is growing in a number of sectors, such as ready meals, chilled processed meat and other staples. This sales growth is coming at the expense of branded products.

Acquiring category leaders could be the way forward

As a result of retail consolidation, more mergers, such as that of Kraft and Heinz, could occur in the future, as manufacturers look to leverage the reputation of their brands to influence retailers.

Divesting mature brands should also be considered

At the same time, brands that are not associated with category leadership may be sold off by leading companies, as they offer low growth prospects and more recognisable products present better opportunities.


Objectives of global briefing
Key findings
What are power brands?
Power brands exist across the packaged food spectrum
The importance of power brands

Performance of Power Brands

Power brands are crucial to leading manufacturers
Power brands a cut above the rest in performance terms
Leading companies enjoy a glut of power brands
Case study: Power brands represent Mondelez’s core focus
Case study : Unilever looks to trim the fat in food
Kraft-Heinz merger: The shape of things to come?

A Turbulent Time in Retail?

Does retail consolidation favour power brands ?
Modern grocery retailing now dominates in developed markets
The rise and rise of p rivate l abel
Case study: Tesco delists a number of brands to cut costs
Slotting exacerbates challenge for medium-sized brands
How will this impact food companies?

Assessing Power Brands Only

Global fragmentation creates opportunities for new power brands
Sauces market highly consolidated in the US…
… but fragmented in Brazil
Developing power brands by controlling distribution methods
Case study: Nestlé’s distribution methods in Brazil and Pakistan
New power brands emerging in developing markets


Divest from medium-sized brands in developed markets
Acquisitions may be key to future success
Focus on power brands


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