Private label sector continues to impress, gains evident across Europe

29 Jun 2018 --- Retailer brands keep gaining popularity and market share across Europe. The latest Nielsen data shows that market share for private label increased last year in 12 of the 19 countries tracked for the Private Label Manufacturer's Association’s (PLMA) 2018 International Private Label Yearbook, and now stands at 30 percent or above in 17 countries. Private label reached an all-time high in Europe’s largest retail market, Germany, with its market share there climbing to over 45 percent for the first time. Market share also increased to its highest levels ever in six other countries: The Netherlands, Belgium, Sweden, Norway, Hungary and Turkey.

The gains came even in countries where private label already had very high penetration. Market share for retailer brands climbed in the United Kingdom, Germany, Belgium and Portugal, where the share was more than 40 percent.

In the UK, where supermarkets are investing in their private label programs to meet competition from the discounters, market share climbed to more than 46 percent. Private label’s share has remained above 40 percent there ever since Nielsen began compiled data for PLMA in 1997.

Private label still accounts for half of the products sold in Spain and Switzerland. Market share in France remained above 30 percent but declined as some retailers reduced their price entry brands and moved toward more premium products.

The biggest market share gain was posted in Turkey, where private label climbed by 3 points to nearly 26 percent. In Greece, retailer brands still account for one of every three products sold in the country.

In Scandinavia, there were gains in Sweden, Norway and Finland, with market share in all three countries above 30 percent. Private label share also was at 30 percent or above in four central and eastern European countries – Poland, Hungary, Czech Republic and Slovakia – led by Hungary climbing to 34 percent. Market share remains above 40 percent in Austria. 

The innovative nature of the private label sector continues to impress, as the difference with brands becomes minimal, or non-existent. The World of Private Label International Trade Show was held in Amsterdam at the end of May and featured countless on-trend products operating under key innovation platforms such as organic certified, vegan, sustainable, free-from and even the incorporation of insect-based ingredients.

The World of Private Label International Trade Show
The branded sector has traditionally been perceived to have a far more developed image than a private label when it comes to innovation, but Alexander Lichter, Vice President Sales, Flavor Division EAME of Symrise, which exhibited at the event, sees an evolution. “I see less and less difference between the private label and branded world. It is all about speed to market, consumer understanding and fulfilling consumer requirements at a granular level,” he tells FoodIngredientsFirst at this year’s event. “In the past, the private label sector took more of a one-size-fits-all approach, with cost and reasonable quality. There are some sectors where that it is still the case. But private label now has tier branding too; with a budget segment, medium quality and premium products all under private label. The differentiation of the value drivers for all private label as well as for branded is blurring and not that different anymore. One requirement is that of agility because the speed to market is really a key differentiator.” 

At this year’s event, it was clear that a multi-prong approach is required to target the highly diverse private label arena. “Not every retailer is driving the same strategy. To be helpful, we need to understand what their strategy is. For some, it is all about reasonable price and quality, but we need to be fast in our actions. For others, it is about being all natural to drive the provenance point. We want to be sure that we provide products to consumers from a particular region and we want to label what we have very authentically. So we have to be very differentiated in our support to private label companies to be successful with their retail customers,” says Lichter.

This year’s PLMA featured the 21st edition of PLMA’s New Product Expo. Exhibitors submitted more than 600 private label products and packaging and selected for the program based on their level of newness and innovation. Trends have been classified in nine distinctive categories: New for Private Label, New Ideas in Convenience, New Ideas in Marketing, New Organic and Natural Products, New Product Concepts, New Scents, Flavors, Recipes and Product Composition, Premium for Private Label, New Environmentally Friendly Products, New Wellness and Health-Related Products.

FoodIngredientsFirst takes a look at some of the innovation on the show floor.

Peru’s Q Foods presented a range of new products made creating quinoa as an ingredient. “The main idea behind the brand is to make quinoa part of the routine. We have products such as breakfast cereals, cookies, chips and energy bars. It is about making quinoa achieve its true potential as a high protein and healthy Andean grain,” says Samir Abugattas at Q Foods. 

“We are a new company that was founded two and a half years ago. We want to make quinoa as an ordinary part of day to day meals.” “All of our products contain at least 70 percent quinoa, when other market options often only include 5-10 percent” “The main challenge is preparing the grain for it to be suitable for processing into cookies, for example. It is because quinoa has a natural chemical called saponin, and this is very delicate as it has to be totally removed. If it is not removed, it leaves a hard and rough taste,” he tells FoodIngredientsFirst. “There is still a lot of space for it to grow. It has been established as a grain form in salads or with rice but the new path is this one – making it a product that is suitable for every hour of the day every day of the week.” The product range is gluten-free, high in protein and rich in healthy fats.

Eurovanille launched intense vanilla bubbles, which can be used in liquid solutions, cakes, pastries, smoothies, cocktail, as a new inclusion product for the end customer. There is a trend in alginate coated products at the moment, for example, bubble tea – but, until now not specifically with vanilla. “It’s made with vanilla extract and we can change the size of the bubbles and also the vanilla extract inside. It can be with or without seeds too. It is made with an alginate coating. We think we are one of the first companies to use this kind of vanilla extract with alginate coating. It can also be cooked as it resists high temperatures and we are also on the way to discovering this use more,” says Patrice Colin at Eurovanille. 

Nuhealth JSC launched brown whole grain rice chips in three flavors. The brown rice chips under the Rice Up! Banner are not fried, all natural and conform to vegan standards. The wholegrain products are made with olive oil and presented in the following flavors: Millet & Sunflower Seeds, Buckwheat & Amaranth.

Oleificio Ranieri introduced its line of organic oil blends. Products in the line include Proactives, an organic extra virgin olive oil/flaxseed oil/sunflower with oleic oil/rapeseed oil blend, which is promoted as meeting 90 percent of the RDA for omega 3. Others are ProAge, which meets the demands of senior nutrition through the borage oil content and is promoted as a “natural source of DHA for brain and heart” and Profuture, an oil blend featuring flaxseed oil and borage oil, which helps cell protection and is especially good for expectant mothers. 

Acetificio Marcello de Nigris SRL has launched a line of organic apple cider in a variety of flavors. The products, which are made to USDA Organic and Non-GMO Project Verified standards, are available in Apple Cider Vinegar With Honey & Cranberry and Apple Cider Vinegar With Honey & Turmeric and presented in a 500ml glass bottle format. 

Auga promotes itself as Europe’s biggest organic producer from field to shelf. The latest addition to the range is a line of UHT dairy drinks in the following flavors: banana, chocolate, vanilla and strawberry. “We are managing quite a large scale of organic production and therefore we can offer to our customer, significant quantities of high-quality organic foodstuffs, including commodities and final products, from one company, This means we grow, process, offer and deliver, meaning that we can ensure food traceability to the field,” Laurymas Miskinis at Auga tells FoodIngredientsFirst.

“More and more consumers consume organic food. They prefer better foods, but want them to taste like they did in the past.” “We are going towards products that are difficult to produce or to grow, meaning higher quality rapeseed oil, cold press and long shelf-life organic milk that tastes, smells and looks like fresh.” “Development, on the one hand, is quite complicated and, on the other, is very simple. Scale and sustainability are the answers. We must find ways to save costs, efficiency in growing and processing and shortening the chain to the final consumer to deliver not only high quality but also affordable food that was made most sustainably.” 

By Elizabeth Green