This month’s edition of trade magazine Brand Packaging features an article written by Kory Grushka about Private Brands titled “The Eurofication of Private Label?” Click through, read the entire article how does it relate to your business and Private Brand in the U.S. Where do you think Private Brand in the U.S. is headed?
The Eurofication of Private Label?
Most people in the packaging community are aware that the U.S. private label market has outperformed the market for national brands in recent years. That said, while many experts predicted more dramatic growth in years to come, private label growth has slowed to some degree. To that end, where is the private label industry headed? Will we see continued expansion, with more advanced product and packaging development? Will we see the U.S. consumer products market look more like Europe, where private label brands are often just as prominent as their national brand competitors? Or will the status quo continue with private label growth but at a moderate pace? Below we take a close look at these questions as well as some other trends and relevant topics relating to the private label market as a whole.
PRIVATE LABEL IN EUROPE
The European retail industry has historically been fairly consolidated (particularly in the U.K.), with a handful of large conglomerates exerting outsized control over the market. With more power in the hands of retailers, the European private label industry has become a dominant force and a model for other regions of the world. As a point of reference, private label accounts for over 50 percent of consumer product sales in the U.K., while that number is well under 20 percent in the U.S. The European private label market has been a trendsetter for other regions around the world, with extremely high consumer perception and innovative product development, packaging and design. For instance, European retailers pioneered the three-tier private label structure (i.e., value, national brand equivalent and premium tiers) that has become prominent in many retail markets around the world. In addition, European retailers such as Tesco (U.K.), Carrefour (France) and Lidl (Germany) were early to the game in offering private label products in niche categories such as organic, gluten-free and pet food, among others.