Blog: The rise of Private Label in Europe. 5 reasons behind the surge

In the bustling aisles of European supermarkets, a quiet revolution is underway. Private label products, once relegated to the shadows, have emerged as formidable contenders to established national brands. Let’s explore the five key reasons behind this remarkable growth and shine a spotlight on the top players driving this transformation.

1. Cost-Effectiveness and Affordability

Private labels have become the savvy shopper’s secret weapon. The allure lies in their cost-effectiveness. Retailers can offer these products at lower prices due to reduced marketing expenses and streamlined manufacturing processes. As inflation rates rise, consumers across Europe are turning to private labels for quality without breaking the bank1.

2. Quality Parity with National Brands

Gone are the days when private labels were synonymous with mediocrity. Retailers have invested in enhancing the formulation, packaging, and overall appeal of their store-brand offerings. Today, private labels often match or even surpass the quality of national brands. Discerning consumers recognize this shift and are more willing to explore private label options.

3. Diverse Consumer Preferences

Europe is a mosaic of tastes and preferences. Private labels adapt swiftly to this diversity by offering a wide range of products tailored to local palates. Whether it’s organic, gluten-free, or sustainably sourced, private labels flex to meet changing consumer demands. This adaptability allows retailers to capture a broader audience.

4. Strategic Retailer-Brand Partnerships

Private label success hinges on collaboration. Brands that actively engage with retailers, provide demonstrable value for money, and strategically position their store-brand products alongside national brands thrive. The synergy between retailers and manufacturers fuels private label growth. Let’s raise our hats to these strategic partnerships!

5. Discounter Dominance

Discounters—the unsung heroes of European retail—have been instrumental in private label growth. These no-frills stores prioritize affordability and value. Consumers flock to them for everyday essentials, and private labels have capitalized on this trend. As discounters expand their footprint, private labels continue to flourish.

Top 5 Key Players in European Private Label

1. ABBI Holding (Italy): A heavyweight in the Italian market, ABBI Holding’s private label portfolio spans diverse categories, from pasta to olive oil.

2. Albert Heijn / Etos (Netherlands): Albert Heijn, a household name in the Netherlands, boasts a robust private label lineup, including health and beauty products.

3. Aldi France: Aldi’s French arm has carved a niche with its private label offerings, appealing to budget-conscious shoppers.

4. Aldi Italia: Across the rolling hills of Italy, Aldi Italia’s private labels grace the shelves, offering quality at competitive prices.

5. BWG Foods / SPAR Ireland: BWG Foods, in partnership with SPAR, dominates the Irish private label scene, catering to a discerning clientele.
   

In summary, private labels have shed their generic image and now stand tall as trusted choices for European consumers. Their growth trajectory is fueled by affordability, quality, adaptability, strategic alliances, and the unwavering support of discounters. As the retail landscape evolves, private labels will continue to shape consumer preferences across the continent.

Sources:

1. Statista: Private Label in Europe

2. PLMA: Private Label Enjoys Strong Growth Across Europe

3. ESM Magazine: European Private Label Awards 2023 – Winners Announced