4 - Refresco.de

Market review 2009
battle or balance? Developments in private
labels and A-brand
The economic downturn, beginning with the mid-2008 credit crunch, has led the world into a recession. The changed
economic situation has caused a change in consumer behavior towards products with a lower value proposition, where
private label products can fill the gap. In Europe, in the non-alcoholic beverages category the private label share accounts
for 25.8% of the market. A-brands started to feel some pressure, but sound and strong brands have recovered or are
determined to recover their market position in the near future. B- and C- brands notice a significant drop in volume.
In this section views, perspectives and comments on the
developments in private labels and A-brands are given by food
experts and major captains of industry from retail and A-brand
companies.
We spoke to Jan-Willem Grievink, general director of
FoodService Institute The Netherlands Food, who specializes
in international food chain issues and Koen de Jong, Managing
Partner at IPLC (International Private Label Consult). Also
interviewed were two food analysts from Rabobank: Sebastiaan
Schreijen, Associate Director Processed Food & Retail and
Francois Sonneville, Industry Analyst Beverage Sector. They
describe general developments in the retail food market.
Where did private label first emerge?
According to tradition, the emergence of private labels already
started at the beginning of the twentieth century when a
number of retailers took up producing their own products to be
less dependent on brand manufacturers. Sebastiaan Schreijen
comments: “Striking is that many established older retail
companies started as a milkman or a butcher’s shop at the
beginning of the twentieth century and added groceries
to their fresh portfolio to become supermarkets in the
1950s. In essence you can say they started as private
label companies.” Jan-Willem Grievink adds: “The larger
emergence of private labels took place in the fifties.
The general driving forces were pretty much the same
throughout Europe, and every country translated this into its
own cultural context. There are two front-running countries
in Europe: Switzerland and the UK. In Switzerland, in the late
forties, the first private labels were born from a more ethical
angle, when Gottlieb Duttweiler, founder of the Migros retail
chain in 1925 and socially engaged entrepreneur, argued that all
consumers should have access to products against fair prices.
He believed that products should be much cheaper when
marketing and advertising costs were
stripped.