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Big brands be scared: private label is coming


Big brands be scared: private label is coming


The quality has gone up, the price has come down, and consumers seem pretty happy about the state of private label groceries. A new report from Datamonitor claims 77% of Asia­–Pacific consumers believe private label options are equal or even superior quality to well known brands.

More worrying for big brands is the revelation that buying private label is no longer just consumer penny pinching, with consumers indicating they will still buy private label even when their finances aren’t tight.

“Although famous-name brands still dominate the market in consumer packaged goods, they need to consider private labels as serious competition both now and in the future,” says Datamonitor analyst Mark Whalley. “Consumer perceptions are evolving and no longer is there an overwhelmingly ‘snobbish’ mentality towards supermarket brands.”

Datamonitor predicts spend on private label across Asia-Pacific countries will increase to reach $24.65 billion for food, $11.17 billion for non-alcoholic drinks, $580 million for alcoholic beverages and $370 million for household care products by 2014.

“One example of the growing success of private label has been Aldi in Australia, which achieved an increase in profits of 30% in 2010,” says a consumer market analyst Matthew Jones. “The company’s product range is largely private label, locally sourced and cheaper than its main rivals Coles’ and Woolworths”.

Mark Whalley says private label looks set for continued success because the products are impressive.

“Private label is no longer about offering consumers the cheapest product; instead it is about offering value,” Whalley says. “Consumers won’t just buy the lowest-priced item on the shelf – they’re looking for products that deliver on their promises and exceed expectations; and this is something that private label has been very successful in doing.”

Have you been buying more private label products lately, or are you sticking with the big brands? Leave a comment below and let us know…

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