This summer, the private labels parading on supermarket shelves across Europe are more interesting and colourful than ever before. From the bright and breezy Carrefour Kids range, which looks a hugely powerful tie-up with the cartoon kings of Disney, to the comprehensive light-blue barbecue range from Co-op, private labels are making a more fundamental business case for their retailers than ever before. There was a time when private label goods were tucked away on our grocers’ shelves, meekly dressed in unobtrusive white labels. The message seemed to be: ‘We are not worthy, but at least we’re cheap.’ That, however, was long before private labels began to mature and grow in confidence. Today, white packaging is usually retained for the discount brand, leaving stores to let their creative design juices flow, as they develop ever-more confident premium ranges. The mantra of supermarket bosses has been ‘good, better and best’ when it comes to private-label product, but now we are seeing a rise in super-premium and niche products.
The design story, of course, is a reflection of the way the products themselves are becoming more varied and sophisticated, and this pattern is set to accelerate as Europe emerges from recession and consumers start to trade up. The onus on retailers to enhance their private-label proposition is rising with the economic temperature. Supermarkets that are slow to respond may be hit. Asda, the Walmart subsidiary in the UK, for example, has lost market share, and researches Kantar Worldpanel believe that the balance of in-store goods has been a factor. “We’re seeing a sustained return to premium buying behaviour, which does not support Asda’s ‘value’ proposition,” explained Edward Garner, communications director, Kantar Worldpanel.
For both retailer and supplier, it is a fascinating time. Bruce Langlands, head of new-product design at Superquinn in Ireland, launched the award-winning SQ range. “To deliver this range, we partnered up with more than 20 artisan suppliers, many of whom were working with a supermarket for the first time,” he says. “Provenance, product authenticity and exclusive recipes were paramount.” Langlands, it must be pointed out, has moved job, but not to another supermarket... but to Harrods, purveyors of the most upmarket products around.
Across the channel in France, for example, Carrefour has just launched Carrefour Kids, a colourful range of 50 SKUs with lovable Disney characters all over the packaging. Carrefour Gluten-Free, on the other hand, comes in muted browns and perfectly hits its niche market of consumers who want to avoid wheat or who are wheat-intolerant. Supermarket brands are growing in confidence. It wasn’t long ago that the big international brands would team up with the likes of Disney. Christophe Geoffroy, director of sales development and partnerships at Carrefour, said, “Establishing a partnership with The Walt Disney Company, the leading global entertainment family, allows us to combine the strengths of two global brands to positively influence what children eat.” French parents, no doubt, will mutter “Sacré bleu!” when they see the attractive designs, but Carrefour Kids products have controlled sugar, fat and salt content, and both companies have emphasised that the products meet “nutritional guidelines”.
The Co-operative Group, not to be outdone, has launched a huge barbecue range for the summer, which includes Truly Irresistible Sausages and a gluten-free option. “All our fresh sausages and burgers are made using British pork and beef respectively,” says Lynne Forbes, category strategy and development manager.
When it comes to innovation, it was traditional for the big international brands to lead the field. But in the UK it is Sainsbury’s that has introduced a milk bag. Sales have surprised even the Sainsbury’s management, as consumers have adapted quickly to the idea. Emma Metcalf-King, Sainsbury’s senior dairy buyer, is delighted with its success. “Sales have far exceeded our expectations.”
From dynamic partnerships with companies like Disney to innovations like the milk bag, which will change the way we shop, private labels are developing with increasing assurance. Retailers realise the power of private label. Where will it end? As they grow their non-food business, is it not difficult to imagine retailers starting to explore avenues outside grocery and the high street. The potential is enormous. To read the full edition of this article, check out the May 2010 edition of ESM, in the Archive section of the website. © 2010 - ESM: European Supermarket Magazine
