Own brand to grow by 50%

THE own-label food sector is set to grow significantly in the coming years, doubling to 50% by 2025.

Research by Rabobank International said the phenomenon will be felt right across the developed economies of the world.

Since 2001 own-brand market share in Ireland has gone from 16% of the grocery trade to 33% at present with that figure projected to hit 40% by 2015.

Consumers will do well out of this changing market as intense competition among private label and brands will increase quality and drive down prices.

It also poses challenges and opportunities for manufacturers and suppliers to the retail food trade, the report says.

This research is due to be presented in greater detail by Sebastiaan Schreijen, associate director, Processed Food & Retail at the bank at The Checkout Conference 2011, in Dublin tomorrow.

Speaking in advance of the conference, Mr Schreijen said Britain is leading the way in this trend.

In effect larger retailers are marking out their terrain by creating a more distinct consumer choice with the emphasis on better value across all their products.

In effect “we will see larger players growing faster than the smaller retail chains across the world,” he said.

All developed markets will be affected by this, including the US, he said.

It will also result in a greater concentration of market share among the big players in the retail global sector, he said.

To ensure their future success, “smaller, secondary brands would be well advised to adopt one of two distinct strategies: either innovation and the development of niche markets, or volume growth to achieve increased scale,” said Mr Schreijen.

As the shift towards own-brand continues, consumers and food retailers will continue to rely on their premium brands as a key component of their overall purchasing strategy.

The demand for better value, whether in premium or own-brand, is leading to a “greater concentration of larger retailers” in most developed economies, said Mr Schreijen.