Are own label products taking over?
UK Consumers are choosing own-brand products to try and manage their ever-increasing grocery bills...
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As sales rocket, own label food products are gaining recognition for their quality and affordability.
No longer a poor relation in the food aisles, own label products are soaring in
popularity while brands struggle to keep up. The continuing cost-of-living crisis is seeing budget-conscious consumers switching to own label and discovering it offers both affordability and quality.
As own label shakes off its ‘downmarket’ stigma, soaring sales confirm its new status as the
savvy shopper’s choice, a trend that doesn’t look likely to slow down anytime soon. Own label growth has rocketed over the past few years and is leading the way for innovation across categories. Now, 53% of retailers expect own label to be their number one growth driver in 2024 [NIQ x Advantage Manufacturer and Retailer Outlook Survey].
In 2023, own label accounted for 26% of total FMCG value sales in Western Europe. With
36% of shoppers worse off than before, price is now the key driver for many shoppers,
creating opportunity for own label to flourish (NIQ Global Consumer Outlook 2024).
Taking the lid off cans
Delving deeper we see that British shoppers are buying more own label canned and ambient goods than before. Own label take-home volumes increased 1.4%, while brands decreased 1.6% [Kantar, 52 weeks ending 21 January 2024].
Brits now spend more on own label canned goods than on branded. The difference is small – £1.428bn on own label and £1.427bn on brands – but the significance is huge when viewed in terms of pricing. Own label lines are 54.7% cheaper per pack than brands on average.
More than just a cheap alternative to fresh food
“Canned and ambient goods appeal to today’s consumers because they offer a cheaper and lower waste alternative to fresh food, but cheaper doesn’t mean poor quality,” says Phil Durham, UK business unit director at Atlante, which supplies UK supermarkets and retailers with high quality dried pasta, and canned and bottled tomato and olive oil products.
Opportunities for new products
In Italy, Spain and France, tinned anchovies and jarred asparagus command premium prices – unlike in the UK where the canned aisle lacks many premium products. Phil suggests there is an opportunity for UK retailers to add high-end product lines, driving incremental unit sales and margins.
Most new product innovation in the canned and ambient sector came from own label in the past year.
Own label baby food has been a standout success in the UK, with unit growth increasing by 3.2% [Circana, 12 months to end of February 2024].
How are retailers responding?
UK retailers are investing in their own label strategies and shifting the perception beyond basic value-for-money options. This includes introducing wider ranges of products while brands scale-back, rebranding packaging and lines and messaging to appeal to a wider range of shoppers and investment in strong omnichannel experiences that can compete with big name brands, reports NIQ.
In 2023, Sainsbury’s underwent an own label restructure, removing its value
range, Sainsbury’s Basics and introducing Stamford Street, which includes the retailer’s
entire value range to help shoppers locate their budget options easily across categories. The Stamford Street rebrand elevates the pared back packaging of the former Basics line.
Tesco’s budget-friendly own label range now includes Creamfields, Eastman’s Stockwell & Co and Ms Molly’s. These products are marketed as ‘exclusive to Tesco’ and might not appear to be an own label product at first glance. Each own label brand has its own logo, branding and packaging designs that are unique to their category.
While some retailers aimed to create ranges that mimic brands, UK retailer Asda rebranded its Just Essential range, with bright yellow packaging to help shoppers identify budget friendly products. The range introduced more than 170 products at the peak of the cost-of-living crisis, making it the biggest budget friendly range in the UK.
And at the other end of the scale, each supermarket is marketing their premium ranges too, releasing ‘luxury products’ to compete with higher end brands, diversifying their ranges to suit every budget and taste.
Always more to be done
Chocolate is one of the products that’s bucking the trend towards own label as consumers mostly continue to be loyal to branded lines of the indulgent treat, although this does depend on format. Chocolate blocks or tablets are much more skewed towards own label claiming 43% volume share versus 21% volume share of total chocolate [Kantar, 52 weeks to 17 March 2024]. Segments that include gifting are much more brand-reliant, taking 90% volume share in the same period as shoppers aim to make an impression on their friends and family, says Kantar.
Working with Atlante
For retailers looking to expand, innovate, introduce or rebrand own-label product lines, Atlante is the ideal partner. We work side by side with our partners to create winning products that interpret market trends and satisfy customer needs.
Atlante is unique as we are neither an agent nor broker. We see ourselves as a value-adding link between retailers and producers. We do not represent producers and, being totally independent, use our expertise to identify the producers best suited to meet a customer’s standards, requirements and expectations.
Our customers receive a tailor-made, timesaving and cost-efficient package of products and supporting services, across the end-to-end process, from brief to basket.
The future is bright for own label products
Own-label product ranges are transforming into their own powerful, competitive new brands thanks to rising sales and increased investment from supermarkets. Improved branding and marketing have helped elevate these products as desirable brands to consumers. We expect to see more innovation and increasing sales, with more and more own-label products outpacing national brands.
