Private label on the road to permanent sophistication

Looking at the sheer amount of companies exhibiting at the 2017 PLMA Trade Show in Amsterdam, private label must be thriving in Europe. Most notably, private label has shed its price image (partly) and more sophisticated concepts have been launched. 

Walhalla

Over nearly three decades, the PLMA International Trade Show has established itself as the Walhalla for private label buyers, journalists , consultants and others. There are other private label trade shows in Europe, but no event comes even close to this one with its 2400 exhibitors and more than 13.000 visitors, including buyers and/or category managers from retailers from all over the world.

Retail – and in its slipstream private label – has become a global affair. The problem with scale is, like in a hypermarket: where to spot the novelties or interesting products? For a buyer in frozen vegetables, it would have been easy. However, given the broad scope in product categories, ranging from frozen food to DIY-equipment or from pet food tot household care, there is no easy way around it.

Showcase

That is why the organizers lend a helping hand to the visitor who is not particularly interested in a single product category. PLMA has for years established a product showcase in which novelties from around the world are on display – or at least only the packaging, which also has been fastened to the shelves to prevent overenthoused admirers from taking these off the shelves (and into their suitcases).

This wide selection of products does not disguise the fact that the majority of products on display at the general trade show are mainly ‘me-too products’: cheaper copies of existing or once branded goods. There is nothing wrong with that (unless copy rights would be infringed), but the positioning of private label as a cost-competitive alternative to branded goods is still alive and kicking.

Pizza sensa glutine

However, there is also a wave of products that have been designed to fulfil a ‘higher purpose’ in life. In some cases, retailers are at the forefront of product development. This is for example the case with the so-called ‘free from’-products: cross-category product lines in which certain ingredients or additives have been eliminated from the product.

Lidl Italy has positioned a number of bakery products, including pizza, under its Free From Glutine-range. Albert Heijn, market leader in the Netherlands, launched a Vrij Van-range (free from) in 2016. At the moment, this range spans roughly 25 products across various product categories. It is to be expected that gluten free will grow in the years to come. According to Mintel, ‘free from’ will benefit from consumer demand for gluten-free, vegetarian and vegan food products. The same accounts for an associated trend, clean labelling: the eradication (mainly) of E-numbers.

Organic on the rise

Also striking is the offering in organic foods. In several countries, most notably in Germany and Switzerland, organic has become almost a staple. Meanwhile, other markets, such as the UK or the Netherlands, are catching up. Initially, the price differential, for example in meats, proved to be too high for a massive market uptake. Over the years, this price gap has shrunk, resulting in significant higher market shares for organic foods. 

In the Netherland, turn over growth of organic was 11,5 %, resulting in annual sales of 4,3 billion euro. That is till only 4,3 % of total food sales, but with an increasing growth potential (stats: Bionext). At the PLMA, several organic concepts were on display, also in high-involvement products group such as baby food. Lidl – again – was on display with the Lidl’uns – a reference to ‘little ones’, a range in organic baby food and assorted snacks.

Sober labelling

Premiumisation in private label is another ‘hot’ feature in private label development. Of course premium lines are nothing new to retailers across Europe. Initially started in the UK, premiumisation has spread over the continent. At the product expo at PLMA, several interesting concepts were on display. 

Striking was the mostly sober design of the packaging. Danish Danofra had several juices on display with dark labels and almost no visual cues. More or less the same accounts for Belgian retailer Cru, whose beers only carry labels with lettering and the C-logo of the retailer itself. Morrissons‘ The Best-range however resembles more ‘old time’ premium positioning with flashy photography.

Concentrated detergent

Finally, private label has ventured more and more into more sustainable products, whether these are sourced fair trade or contain more environmental-friendly ingredients. In the non-food department Austrian Merkur (a subsidiary of ReweGroup) has a range called Immer Grün, always green) for its household care range. Its washing up liquid also contains the vegan label.

Also at the PLMA, Belgian company CHEMBO presented, amongst other concepts, an innovative detergent concept: the BCAP-capsule. This refill of concentrated product can be screwed onto a spray containing water to prepare a ready-to-use cleaner. The concept is more sustainable in terms of transportation costs and CO2 and it reduces water and energy usage during the production stage. Also it requires less packaging, a blessing for all of us.