Demand for private labels set to double in 2025: Report

Posted by Rita Mu

The global market share of big brands and private label food products is set to double from 25 per cent to 50 per cent in 2025, according to new research by Rabobank.

Rabobank’s Private label Vs. Brands report, which is based on assumptions about food retail market structure, lists 11 drivers for private-label growth including:

•         Continued industry consolidation in developed food retail markets such as western Europe, the United States and Australia

•         Adoption of modern retail in developing markets such as Russia and Turkey

•         Increased consumer acceptance of private label following the recession

•         Further growth of the hard discount segment

•         Professionalisation of private label supply

A recent report by the food market analyst, Datamonitor, showed that 50 per cent of Asia-Pacific consumers believe own-brand foods are identical in quality to famous brands, and 27 per cent believe that they are superior.

According to Rabobank’s report, A-brands will retain their importance for retailers to anchor categories’ price levels and give consumers choice and familiarity, while smaller secondary brands, B-brands, will have to strategically reposition to avoid being squeezed out of the market.

The report recommends two strategies to B-brands suppliers; either invest in quality and target the premium market, or specialise in private label.

Author of the report and Associate Director, Sebastiaan Schreijen, of Processed Food and Retail at Rabobank said: "Our research shows that private label and A-brands are an inseparable combination. Like love and marriage, you can’t have one without the other. But where two’s company, three’s a crowd.  This report is an early warning to B-brand suppliers to adapt their strategies to survive."

Image: news.com.au

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