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Food trends

Own-label products close to outperforming popularity of national brands in Europe, report shows

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Blue basket with 'Aldi' logo, full of own-brand pot products and bananas and pineapple

Image credits: Aldi

Own-label products make up 38% of total fast moving consumer goods (FMCG) value sales in Europe, outperforming the popularity of national brands across nearly all categories, a new report from consumer behaviour specialist Circana reveals.

Growing numbers of shoppers are searching for cheaper groceries amidst growing food inflation, helping the private label sector reach a value of €229 billion.

The report investigated own-label brand sales in France, Italy, Germany, Spain, the UK and the Netherlands – the six largest markets in Europe. Its analysis shows Spanish consumers are buying own-label the most (47%), followed by Germany (41%). The UK had the lowest market penetration (37%), with more shoppers choosing national brands.

According to the findings, three in five consumers say they think own-label products are as good as national brands when it comes to innovation, sustainability, product quality, brand image, among other factors. Some 21% of consumers who buy both own-label and national brands, said they thought private labels were better than national brands.

“Private labels have come a long way since their arrival on the shelves 40 years ago” Ananda Roy, Global SVP for Strategic Growth Insights at Circana said in a statement. “Retailer investments are paying off, as more consumers perceive private labels to be innovative and as good, or better than, many of the national brands that they compete with. As a result, they are no longer the ‘cheap’ alternative. Shoppers buy them because they offer something new and of good quality.”

The report does show however that consumers do still stick to national brands for products like alcohol and baby food. While some national brands still have consumer loyalty, shoppers are said to be buying less of these products. Circana recommends national brands prioritise better pricing and healthier plant-based products to beat competition.

Nearly 80% of shoppers are actively searching for the lowest prices when they shop, while over 70% pay attention to product labels and 63% analyse product claims.

“Retailers have transformed private labels into strategy-led, consumer-focused, well-differentiated and data-driven alternatives to national brands,” Roy added. “National brands are now having to regard many retailers as significant competition that they can no longer ignore. Retailers are clearly winning on many fronts. While not always the least expensive on display in the minds of shoppers, private labels offer good value, quality, a range of benefits that meet shopper’s dietary choices or lifestyles and can be trusted as much as national brands with high equity sitting on adjacent shelves.”

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