The research study covers the present scenario and growth prospects of the private-label food and beverage market in Europe for 2017-2021. The market is segmented based on the product (food and beverages) and distribution channel (offline and online stores).
The private-label food and beverage market in Europe is one of the largest markets worldwide owing to greater penetration. Some of the leading countries in the region are Germany, the UK, France, and Italy. Carrefour, Tesco, Aldi Group, Auchan Holding, and EDEKA are some of the major retailers who run hypermarkets, supermarkets, and warehouse clubs in the region. The growth of the market is mainly due to the visibility of these brands owing to more shelf space and different discount offers.
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Technavio consumer and retail research analysts highlight the following three factors that are contributing to the growth of the private-label food and beverage market in Europe:
- High ROI opportunity
- Rise in product innovations
- Enhanced brand visibility
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High ROI opportunity
Retailers provide private-label brands at affordable prices to the customers as it costs less to manufacture and distribute these products. Thus, they earn huge profit margins. Every retailer is looking for an opportunity to introduce more private-labels and attract price-sensitive customers. Retailers compete with other established brands by offering discounts and adopting different strategies to earn more profits. They also invest in marketing and promotional activities to ensure good returns.
Poonam Saini, a lead retail goods and services research analyst at Technavio, says, “Private-label brands are present in various categories such as grocery, clothing, and electronic products. In the grocery segment, retailers with private-label products are attracting many customers who require better-quality products at affordable prices. This helps retailers drive their sales and get higher margins.”
Rise in product innovations
The food and beverage market is growing steadily as customers' demands and choices are changing very rapidly. The major brands in the grocery retail market are not very different in terms of quality from premium private labels. However, the major national and international brands are priced slightly higher.
“Retailers aim to introduce technologically advanced products in terms of premium quality and packaging of private-label food and beverages, to satisfy the requirements of the customers. Customers are ready to pay an extra amount for such premium products as they demand superior quality. Also, they consider private-label products innovative. Manufacturers and retailers are investing in innovations and earn high-profit margin from customers who purchase these premium private-label products,” adds Poonam.
Enhanced brand visibility
Retailers change the design, pricing, merchandise, and distribution of private-label brands by studying customers habits and fashion trends. These brands now acquire a larger shelf space than the other brands in supermarkets or hypermarkets. Retailers are concentrating on improved packaging and labeling of private-labels to increase their sales.
Manufacturers pay the retailers to place their products on their shelves to attract more customers. Since retailers offer a wide variety of private-label products in the grocery category, consumers get attracted to the variety of products on offer and prefer to purchase them. The sale of private-label products is increasing in European countries due to increase in demand for these products among customers.
- REWE Group
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