Private Brand Will Take 50% Share of Food Retail Market by 2025

A new global research report ‘Private label vs. Brands – an inseparable combination’ from the Netherlands based international financial services provider Rabobank Group Food and Agri Research division (FAR) shows that

  • The global market share of private/own label food products is set to double from the current 25 percent to 50 percent in 2025
  • A-brands will retain their importance for retailers to anchor categories’ price levels and give consumers choice and familiarity
  • Good news for consumers is that they will still have access to familiar brands and have greater access to lower priced private label products
  • Smaller secondary brands (B-brands) will have to strategically reposition to avoid being squeezed out of the market
  • Two strategies are open to B-brands suppliers: either invest in quality and target the premium market, or specialise in private label.
  • A consolidation spree among private label specialists is inevitable to achieve economies of scale and reduce the cost base

Rabobank’s conclusion that global private-label penetration will reach50 percent by 2025 is based on assumptions about food retail market structure. The report lists 11 drivers for private-label growth including

  • Continued industry consolidation in developed food retail markets (western Europe, the US and Australia).
  • Adoption of modern retail in developing markets (CEE, Russia and Turkey)
  • Increased consumer acceptance of private label following the recession
  • Further growth of the hard discount segment.
  • Professionalisation of private label supply

Author of the report Sebastiaan Schreijen is Associate Director Processed Food & Retail at Rabobank. “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.”

Read the report.

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.