The Struggle for Shelf Space: How Private Label Is Impacting Food Brands

Strategy Briefing

About This Report

Oct 2013

With the struggle for shelf space at an all time high, this global briefing explores how private label food is developing and where its penetration is threatening the dominance of global food brands. From its domination of the economy ranges through to the use of fantasy brands, this report examines the tactics and priorities for private label food and what successful brands are doing to justify their existence on the supermarket shelf.

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The Struggle for Shelf Space: How Private Label Is Impacting Food Brands

Value remains central to private label but different price points have emerged

Value is still the core message that private label food needs to send. However, no longer confined to the economy segment, private label food is starting to offer value across the entire pricing spectrum.

The positions of major grocery chains have strengthened, leading to a focus on private label

The success of modern grocery retail formats such as discounters and hypermarkets has seen large retailers consolidate their positions at a faster pace than packaged food companies. Ultimately this has weakened the position of many brands and bolstered the availability of private label.

Budget private label options remain the initial offering from most grocery retailers

With the economy range an easier segment to penetrate for private label food, most grocery retailers will focus on building up their share of the market within this lower priced segment as it requires less branding than other segments.

The premium segment has emerged as the next target for major grocery retailers, but with value at its heart

Private label sold at higher price points offer higher margins and will remain an attractive area for many retailers. Whilst indulgence, convenience and health will help to justify a higher price, value must still be the prime offering for premium private label food.

Convenience, health and taste remain the core way for a brand to add value

Despite its success, the growth of private label in food is not inevitable and many brands have managed to steal market share away from private label through more convenient formats, health innovations or simply better taste.

Creating emotional attachment to a brand is also vital to success

Building brand loyalty is the only long term defense against private label food and this will depend on the marketing efforts of brands. This can be achieved in many ways and provides a unique advantage over private label food.

The outlook for private label remains mixed

Despite private label losing share at a global level in packaged food, it has actually increased its share in most markets and will continue to be a major consideration for food brands.

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


Key findings
Objectives of global briefing
Are private label foods really losing share to branded foods?
Asia Pacific: The only region where private label has declined

What's Really Driving Private Label in Food?

The top private label food markets are all developed markets
"Cheap" basic food items see highest private label penetration
Prevalence of discounters fuels private label penetration
Consolidation matters: Private label in developed markets
Consolidation matters: Private label in emerging markets
Economy private label food dependent on packaging imitation
The primary drivers of private label food consumption

Priority Areas for Private Label

Going in low: Private label food occupies the bottom of the range
Expanding its presence: Introducing multiple tiers in private label
How Tesco has taken its private label food portfolio to the next level
"Venture brands": Another tool to use in a private label portfolio
Is Tesco Finest's TV sponsorship a new threat to food brands?
Cross-category ranges needed for standard/premium private label
Foreign markets: The next target for high end private label food?
What are the priorities for private label food?

How Branded Food Has Fought Back

The core reasons why consumers still buy branded food
Taste: Food brands drive excitement through new "sensations"
Distribution: Retail formats shape availability of private label food
Health: Investment in research stifles private label packaged food
Convenience: A crucial selling point of branded food
Emotional attachment: A brand's ability to make food personal
How food brands have fought back against private label

What the Future Holds for Private Label Food

Trading down likely to return and aid private label in many markets
Has the spread of modern grocery retail come to a peak?
The retailer's dilemma: Sales growth vs margin growth
The end of the space race likely to herald new private label era
What does the future hold for private label food?