Private Label: Opportunities for Drinks in Europe

February 2022

Channel shifts and recent shock to economies globally will shape the way consumers perceive private label within drinks. Changing consumption patterns will allow retailers to adapt private label in niche categories and explore beyond the “economy” tag in others. Eastern Europe will unleash the potential of retailers’ own brands, mimicking the beaten track of Western countries and untapping specific regional opportunities. Sizeable competition from private label is unescapable.

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Key Findings

Economic instability remains the core factor for private label prosperity. Other variables gain more influence, but have secondary impact

Financial hardship caused by the COVID-19 pandemic forced consumers to re-think their spending. Value for money embodied in private label quickly became a priority. The evolution of retailers’ own brands to modern and reasonable quality products allowed people to consume them with no big sacrifices to their habits.

Consumers are changing their perception of private label, increasing trust and building loyalty

Modern consumers more often make a conscious choice when purchasing private label. They choose to pay for the product and experience, with chained retailers building trust over time and elevating the consumers’ perception of both. Apart from a value proposition, private label is expected to satisfy all consumers’ demands, undermining the USP of major brands through equivalent or superior taste, packaging and retailing experience.

Ongoing expansion of modern retailers in Eastern Europe, discounters' popularity and e-commerce momentum underpin private label’s strong dynamics

Eastern Europe witnesses ongoing penetration of modern grocery retailers with discounters gaining more weight. That becomes a crucial factor for private label expansion and its perception among consumers. Changed channel reality with instant e-commerce and dark stores put new players on the private label map. The strong presence of private label options in these rising channels will ensure own brands’ prosperity in 2022.

Private label entry to new and niche categories, stronger focus on design, health and wellness and sustainability trends promotes private label and change its appeal to consumers

The way consumers select their products changes within modern lifestyle trends, and private label is no exception. It is not solely about economy appeal, and retailers now enter very small, but trendy beverage categories to fill the niche, building recognition and trust.  Own brands now address the need for healthy and sustainable choices, which allow them to play in higher-value ranges, and low-income consumers to enter the premium segment. 

 

Scope: Private label in European drinks industry
Key findings
Private label beverage momentum: why now?
The next phase of private l abel evolution in Western Europe
New private label transforming quality expectations in Western Europe
The share of private label varies by category, with penetration highest in tissue and pet care
Mix of private label and branded beverages: Refresco makes it all
Rauch: strong player in juices and Red Bull producer
Modern grocery growth will create new private label opportunities in Eastern Europe
Channel shifts impact private label beverages in Eastern Europe
Private label in Eastern Europe supports the development of functional categories
Bottlers for private label in niche categories such as RTD coffee
Trends adopted by private label
Targeting modern consumers
E-commerce as added power
Vkusvill : modern and private label orientated (1)
Vkusvill : modern and private label orientated (2)
Lidl “click-and-collect” offer (Poland)
Opportunities for private label
Obstacles to overcome

Soft Drinks

This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.

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