By Martin Shellaker
// Thu 22nd
A recent article on IGD Analysis highlights that "retailers are no longer adopting a ‘me too‘ approach in private label development. Increasingly, they are bringing innovative product concepts to the market and stepping into the role of brand creators."
However, those of us who have been in this industry for a few years (or more), may remember that Sainsbury's has previously developed a powerful private-label program that stood apart from other brands. So successful was it, that by the mid-1990s, its own-label products generated 66 percent of total sales. Indeed, three of the company's proprietary products in particular made headlines in the early 1990s. Novon, a laundry detergent introduced in 1992, marked Sainsbury's move into head-to-head competition with national brands.
Within just six weeks of Novon's launch, the company's share of the detergents market doubled to 20 percent and 8 per cent of the £900m detergent market in the UK, with millions of Sainsbury's shoppers switching from traditional brands made by the industry giants Procter & Gamble (Ariel, Daz and Bold) and Unilever (Persil, Surf and Radion).
In 1994, Sainsbury's changed the formulation and packaging of its own cola beverage, reintroducing it as "Classic Cola”. Within just a few weeks, Classic Cola won 13 percent of Britain's total cola market, while sales of both Coca-Cola and Pepsi at Sainsbury's stores plummeted.
So here we are 20 years on and retailers are once again demonstrating a renewed passion for private label - moving away from the replicating brands and increasingly creating their own unique designs, shapes and product features.
However, this time private label is more sophisticated e.g. increasingly helping to support retailers' mission specific ranging, building on store segmentation initiatives to arrange products in a way that is relevant to shopper needs e.g. Morrisons’ M Kitchen range, which, helped by collaborations with professional chefs and the pop up restaurants, has greatly enhanced customer perceptions of its ready meal offer.
Is this just the natural cycle of events or is the face of grocery retail changing for good? The fact that the passion for "private-label brands" is being embraced by all retailers suggests that this is here to stay. Ultimately, a good thing for all; more competition for brands, more choice for the shopper and maybe even more opportunities for great creative agencies to develop award winning work!
Sources: www.fundinguniverse.com; www.independent.co.uk; www.igd.com