With the economic climate remaining fraught and an ever expanding range of high quality own label ranges offered at food retailers, the influence of private label products has never been stronger. And latest research from Mintel reveals that for the first time, in 2011, the proportion of own label New Product Development (NPD) overtook branded in the UK. Historically, the proportion of new product development within food and non-alcoholic drinks has been higher for brands than for private labels. While brands held a 55% share of total NPD in 2010, the balance tipped in 2011 in favour of own labels as they accounted for 54% of NPD, compared to 46% for brands. Today, some 57% of consumers think that own label products have improved in taste and quality, while 52% actually prefer them to brands in some cases. Furthermore, some 82% of adults think that own label products provide value for money, compared to just 16% for brands. Today, some 80% of shoppers buy own label products (compared to 89% of consumers who buy branded goods), and retailers’ own products look set for further growth in 2012 as consumers expect to buy more of them. What is more, as many as 20% of those who buy branded products are set to buy less in the coming year. Chris Wisson, Senior Food Analyst at Mintel, said: “While there are signs that pressure on consumer budgets is slightly easing, 2012 looks set to see the majority of adults remaining watchful and discerning when shopping. Our research suggests that on balance, consumers expect to buy more standard and value own label foods while cutting back on brands.” Mintel’s research reveals that the market for own label food and drink reached £37 billion in 2011, a 24% increase since 2006. This growth has come at a slightly faster rate in relation to the wider market, which grew by 23% over the same period. The own label market is expected to show similar growth trends in the coming years and is projected to reach £46 billion by 2016. Today, 69% of Brits buy economy own label food and drink products. While there are signs of the recession easing somewhat, its continued impact is still being felt by consumers. Indeed, just 6% of adults who currently buy economy own label products expect to reduce their usage in the coming year, while one in eight (18%) current users expect to buy more in the year ahead. Premium own labels have also fared well in recent years despite budgetary pressures and today are bought by 71% of UK consumers. Growth also looks set to continue in this segment, with 27% of adults expecting to buy more of these products in 2012 and only 12% to cut back. “Retailers are appearing to put greater weight behind their own label ranges in attempts to encourage consumers to switch into using them. More comprehensive ranges, product improvements and even range relaunches have all put greater pressure on food and drink brands.”Chris continues. The progress of own labels is such that over half (52%) of adults prefer the taste of own label products to branded equivalents in some cases, suggesting that they are increasingly becoming brands in their own right. However, despite over half of adults thinking that own label products have improved in taste and quality, 58% of adults still say that for some foods, only brands will suffice, with premium products in particular offering brands a safe haven. UK consumers traditionally associate a wider range of positive attributes with brands than own labels, particularly being trustworthy (52%), traditional (51%) and authentic (44%), while just 2% of adults think that they are bland. However, own labels come to the fore for being family-friendly (45% versus 28% for brands) and, in particular, offering value for money (82% versus just 16% for brands). The most likely users to maintain their usage and support the own label market are men (46%), over-55s (49%), retirees (54%) and, surprisingly, ABs (48%) and households with an income of £25,000-49,999 (50%). “Times have changed and there is no longer a perception about own label equating to lower quality. Our research shows that many affluent consumers do not necessarily dismiss own label products out of hand, but they appear to in fact be keen users in certain categories. The increasing credibility of private label products which, crucially, often undercut brands on price is a warning for brands who are under increasing pressure from consumers who are becoming more open to the idea of buying own label groceries.”Chris concludes. You might also be interested in: No related posts.