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PREMIUMIZATION HELPS PRIVATE LABEL PROSPER

PREMIUMIZATION HELPS PRIVATE LABEL PROSPER



Private label coffee is going further upmarket and evidence is growing that big retailers also see potential growth in the sustainable private label coffee segment.

A 2018 report by global measurement and data analytics company Nielsen described the global private label market as a “new retail revolution” that will affect the food industry around the world over the next five years “in ways we have never seen before.”

The company said the growth of the private label sector would pose new challenges for brands and manufacturers across the globe, as retailers develop and market their own products rather multinational name brands to meet changing consumer needs.

“Many now see private label brands as being equivalent to or substitutable for multinational brands. When consumers consider quality, many view private label products are as good and getting better. For example, we see this with the extensions into premium private-label products, where quality is very good. Examples include wine, specialty groceries, coffee and prepared/ready-to-cook chilled meals of restaurant quality,” Nielsen said.

Asked about the main drivers in the private label market in Europe and the rest of the world, Marie Lalleman, Executive  Vice President, Strategic Clients at Euromonitor International, said private label brands had managed to capitalize on the squeeze on consumer spending during the years following the global financial crisis.

“Non-necessary products were removed from the shopping list while spending on staples such as coffee went down. This dynamic changed between 2012-2017 where premiumisation slowly took over most fast-moving consumer goods, including coffee,” she explained.

As Fernando Serpa, Vice President, Sourcing and Procurement Latin America at Walmart noted in a recent blog, the company is working to provide a range of private label coffee product options that are affordable, high-quality and sustainable.

For more information see the September 2018 issue of Coffee & Cocoa International.

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