The Private Label Executive Club launched by Trace One looks into the future of private label: renewal or stagnation

 

In the first Iberian PL Executive Club, launched by Trace One, experts have debated the trends that will mark the future of PL.


The growth of PL has been spectacular over the last few years, driven by the financial and technological commitment of the big food retailers in Spain. All the experts from the sector meeting in the first Iberian PL Executive Club, set up by Trace One and presented by AECOC, have coincided in this diagnosis.

While in 2000, PL represented 18.6% of the market, this year, 2010, which is about to end, they will reach 34.4% of the total Spanish market, according to data from Kantar Worldpanel.
The recent economic crisis situation has acted as another force promoting the growth of PL.

“The crisis has marked a substantial change in our way of behaving as shoppers. Shoppers are more rational and are not prepared to pay more for something that does not provide differential benefits. In this context, own brands have found a way to grow, as there is no real differentiation between them and national brands for a large proportion of families. This strengthens a process that has been going on for 20 years, with growth in all channels,” notes Susana Magdaleno, Retail & Petrol Sector Director for Kantar Worldpanel Spain.

Along the same lines, Iliana Izverniceanu, spokesperson for the OCU (Spanish consumers’ association), points out that “the intelligent consumer wants a quality product at a good price and knows that this can be achieved with own label brands. The crisis has speeded up this process”.


However, with a more stable economic outlook, the PL sector, which has been riding a tsunami for the last few years, must renew itself in future if it wants to go on growing and increasing its share compared to national brands, while maintaining the favour of end consumers.
The experts meeting in the Iberian PL Executive Club have noted several basic core areas food distributors and suppliers must work on to maintain the growth of PL:

1) Innovation: creation of new ranges and new product categories as well as commitment to sub-brands, which will make it possible to reach target consumers more efficiently. All this with the aim of achieving an improvement in the quality and safety of products, which will come alongside greater openness about the origin of products. Innovation must also be a fundamental criterion when it comes to choosing suppliers, instead of following only cost criteria.

2) Price: continuing to apply product promotions at reduced prices and going for new low-cost formats such as Carrefour Discount, Eroski Basic, Aliada (El Corte Inglés).


3) Technology: its use can promote the development of PL thanks to new sale formats: online sales, intelligent sales, mobile phone shopping. It will also make it possible to create new concepts in relation to products instead of simply extending lines. The use of online collaboration platforms between food retailers and suppliers such as Trace One will facilitate the development of own-brand products and reduce time-to-market, as well as guaranteeing quality and food safety criteria.

Gregory Hodge, Research Director at Planet Retail, notes in this sense that: “The importance of retailers continues to grow and, while this is happening, they will continue to exercise their influence on the development of PL. By understanding their customers’ message and continuing to lead innovation, retailers are currently setting market trends, and the development of technology and online distribution are the most powerful tools in this transformation.”


According to marketing guru Juan Pérez Cuesta, former Managing Director of Danone in France and Germany, “Whatever they say, the PL sector will continue to grow, but its growth will neither be as pronounced nor as easy for everyone unless they apply innovation criteria and commit themselves to branding.”

 

 


ABOUT TRACE ONE


Trace One is the European leader in e-collaborative solutions for managing consumer goods products for retailers and manufacturers in all categories.
Created in 2001, Trace One launched the first collaborative online platform in SaaS (Software as a Service) mode for managing the development and quality of private label products.
In 2009, Trace One announced the acquisition of Eqos, a UK enterprise, leader in non-food global sourcing solutions.

Trace One is today the inside partner of retailers and manufacturers to support the development of their private label products and national brands. Trace One’s e-collaborative solutions help to accelerate the development and product innovation, and guarantee quality and food safety.

Trace One’s solutions are adopted by European leading retailers including Auchan, Carrefour Group, Carrefour Spain, Casino, Eroski, Franprix-Leader Price, Lidl, Sainsbury’s, Tesco, as well as 6200 suppliers in food and non-food sectors, 80% of the private label suppliers to the French market.
Major multinational companies in the FMCG sector also work on Trace One solutions for managing their electronic catalogue: Coca-Cola, Danone, Kraft Foods, L’Oréal, Procter & Gamble, Sara Lee, ….

Trace One Group today has a global presence through its five offices around the world: France, Spain, UK, USA and Hong Kong.

www.traceone.com