Premium private label beverages on the rise

A new report from Canadean has found that premium private label beverage products are continuing to gain momentum across Western Europe.

The report states that private label soft drinks and beverages are seeing notable success in the Western European premium market, with ready-to-drink iced coffee drinks forecast to grow by eight percent in 2014.

“Ready-to-drink coffees were traditionally considered to be premium and therefore private labels used to struggle to achieve the same sales numbers as branded products. This is largely due to the image that private label products are of lower quality which made it difficult to attract consumers who would be willing to try the drinks,” says Micheal Wiggins, analyst at Canadean.

To address these negative consumer perceptions, Wiggins says that up-scaled product offerings together with higher pricing has proven to be a successful strategy.

"Consumers expect private label drinks ranges to be lower in quality because of the low price point. However, once the price and packaging of private label ranges are up-scaled, consumers feel that the quality gap between branded and private label products decreases. The appeal of entering the premium market to retailers is undeniable, given the higher profit opportunities these products offer,” he says.

Over the longer term, Wiggins says that it will be interesting to see the effects of these trends on private labels as a whole.

“On the one hand this will allow private label producers to gain a larger price advantage, but, on the other hand, it may be harder to achieve that initial push in convincing consumers of the product’s quality.”


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