Surviving the Cost Crisis

On Friday 3 December we presented our second online webinar on the impact of food cost inflation. In total 185 professionals working in the Private Label industry participated in the event.

The objective was to give an update of the situation in the market place and to offer practical advice on strategy and tactics to deal with the sharply rising costs of food, energy, transport and labour.

Three IPLC consultants, all being senior ex-food retail buyers shared their views and thoughts with the audience.

You can click here to watch a recording of the webinar

 

 

Unique Private Label Seasonal Offers in the UK

There is always room to grow sales in Private Label!

Even with one of the highest shares of Private Label in Europe at over 50%, the UK market continues to see a rapid rate of new innovation and product launches in the Private Label arena.

Christmas is a key time to gain and retain shoppers, and the main supermarket chains in the UK fight hard to do this by developing unique Private Label seasonal offers.

Our UK Partner, Paul Stainton, summarises some of the most innovative and exciting Private Label launches for this Christmas in the UK, and highlights a few key points for Private Label manufacturers to consider.

For further information, or to discuss Private Label developments and opportunities in the UK, please contact Paul at pstainton@iplc-europe.com

For the full presentation click here

Amazon Fresh new Private Label line

Amazon Fresh new Private Label range launches in the UK | 7 May

The European grocery retail market has seen many changes throughout the pandemic, none so significant as the growth of online sales. In the UK online grocery sales peaked at 15.4% share (Kantar 12 w/e 21/02/21) and alternatives to “traditional” in-store shopping continue to flourish such as the surge in “rapid home delivery” options.

But one particular launch has received much publicity – Amazon’s opening of two “walk-in, walk-out” Amazon Fresh convenience stores in London.

With this launch Amazon have developed a brand-new Private Label range which impresses through both range depth and product quality.

It offers an exciting new opportunity for Private Label manufacturers. Most of the new range is in the Chill/Fresh category, so there is plenty of scope to develop across Ambient and Frozen.

This Private Label range is bound to be extended to Amazon Fresh online as well as in the forthcoming new Amazon Fresh stores, so now is the time for manufacturers to approach the retailer to discuss potential new business.

UK IPLC Partner, Paul Stainton, visited the Ealing branch of Amazon Fresh recently.

Valuable insight for Private Label manufacturers

Last week Simon Wainwright, Global Insight & Analytics Director, at IGD interviewed my colleague Paul Stainton, Partner at IPLC in the UK.
As a former Group Buying Director at Aldi UK, Paul shared truly interesting insight for Private Label suppliers on topics such as:

-The trends in Private Label as a result of the global pandemic
-What retailers expect from their suppliers
-How to address innovation and why it so important
-The importance of sustainability in Private Label
-How Private Label can help engage with the consumer
-E-commerce and the challenge for Private Label

Please click on the button below to watch the full 30 minute interview.

Private Label opportunities in the Russian market

The Russian food market is rapidly changing. Modern retail is growing at the expense of open markets, mom-and-pop shops, street vendors and corner stores (traditional trade). Although the Russian retail market is consolidating it still remains relatively fragmented. In the process of concentration many independent retailers are expected to be absorbed by larger players or to disappear from the market.

In view of the current economic situation Russian consumers are very price sensitive. Branded products are constantly in promotion and shoppers look for the best deal. They easily switch stores and brands.

At the same time the market share of Private Label is growing. Retailers consider these products of strategic importance as they allow to differentiate from the competition and build shopper loyalty to the store. Specifically, in the Russian market where brands are constantly in promotion (promo share is close to 60%), Private Label enables a retailer to create an attractive price perception.

Learnings from Europe
Based on our experience in Europe, the most sophisticated Private Label region in the world, we expect that many smaller brands will be pushed out of the Russian market and replaced by Private Label products.

Opportunities for manufacturers
The supply side of the Russian market is very fragmented with many relatively small manufacturers all offering their own brands. With heavy marketing and promotional support, the margin of the brands has deteriorated over time.

Local manufacturers recognise the irreversible changes that are taking place in the Russian market and prepare for action. Companies consider that being the first in Private Label manufacturing may result in a strong and long-term profitable position. At the same time, more and more producers of Private label in Europe are turning their eyes to the Russian market. They see the developments as opportunities to enter an attractive new market.

However, it is crucial for any player to realize that offering Private Label cannot be an opportunistic tactic but must fit into a long-term view on the market and an integral part of the company strategy.

IPLC has been active in Russia since 2014 and supported both local manufacturers and retailers in their private label strategy and implement best practice. In order to support them even better, IPLC has opened an office in St Petersburg.

If you want to learn how we can support your company, please contact:

Maria Kogan, Associate IPLC in the Russian Federation
mkogan@iplc-europe.com
You can visit her profile on the IPLC website

Alternatively you can contact:
Koen de Jong, Managing Partner IPLC
kdejong@iplc-europe.com

Visit our website in the Russian language

Private Label suppliers should not miss out on in-market research

The Covid pandemic has severely restricted the ability to travel resulting in important consequences for Private Label suppliers.

Although market data remains available from the main providers, the crucial in-field research of new products, new initiatives and pricing has almost dried up due to the lack of ability to travel.

It is vital to keep abreast of developments in the markets in which Private Label suppliers export to. They need this to retain their understanding of their customers’ needs.

Most markets in Europe are characterised by fierce competition and constant change. Private label suppliers are expected to be on top of the latest developments and to pro-actively support their retail customers with insight and recommendations. Plus being able to put the market date into context.

With a local presence by means of a network of 10 offices in Europe and Russia, IPLC can provide fast and professional support. Our consultants are highly experienced in gathering information essential for the right strategy and decision making.

IPLC can currently provide the following support:

  • Retail structure, including market shares
  • Category analysis: an overview of all brands and private labels on offer
  • Product quality, pack size, price, number of facings and positioning
  • Manufacturer behind the private label product can quite often be identified
  • Private label market share by category and product
  • Photos of products, or samples purchased and shipped

The research described above can also be of great value to manufacturers looking for a new export market.

If you would like to learn more about our approach and its potential, please contact us. Alternatively, the IPLC partner in the relevant country can be contacted directly.

Paul Stainton joins IPLC

We are pleased to announce that Paul Stainton has joined the office of IPLC in the UK in the position of Partner UK.

Paul has worked for over 33 years in the buying departments of the Co-Op and Aldi in the UK, leading buying teams responsible for multi-million-pound turnovers.

As the very first buyer at Aldi UK, Paul developed private label ranges from scratch across many ambient, frozen, chilled, and non-food categories. Managing performance in periods of unprecedented growth, he was responsible for supplier negotiations, category strategies and private label new product sourcing and design development.

Paul:
“Private Label share in the UK has grown from 46.8% to 52.7% in the past 8 years. As one of the leading countries in private label innovation, the UK offers suppliers tremendous opportunity for growth. Having a deep understanding of retailer requirements in private label, I feel my knowledge and experience will be an asset to suppliers. I am delighted to join the IPLC and their team of international consultants”

Koen de Jong, Managing Partner IPLC:
“We are delighted to strengthen our office with this seasoned retail professional. The UK is the cradle of private label and virtually all strategic innovations originated in this market over the past few decades. Paul experienced the enormous development up close and developed sustainable relationships with suppliers from all over Europe. We are on the eve of major changes in the market and with a strong presence in the UK we hope to assist our clients even better than before on relevant issues”.

Merger and acquisition activity in Private Label manufacturing

Private Label and Contract Manufacturing Preview: Affordability and Diversification Drive M&A | Mergermarket | 9 December 2020
By Barbara Pianese

This is an overview of Mergermarket proprietary intelligence in the private label and contract manufacturing space in the past four months, featuring existing opportunities in the market.

It is a known fact that in times of economic crisis, consumer confidence declines and purchasing attitudes shift towards affordability and financial conservatism. The severity and length of the current COVID-19 pandemic has provided renewed appetite for private label consumer products among consumers, many of which are likely to stick to these products once the economy recovers.

The private label space is very fragmented, with many businesses, both in the food and non-food sectors, of a small size and family owned. The very nature of these businesses means that they experience a lot of competition to win supply contracts from retailers that are becoming increasingly bigger, Koen de Jong, Managing Partner of International Private Label Consult (IPLC), said. This is a case in point in the grocery space, where further consolidation among grocery retailers has led to increasing competition among private label manufacturers, particularly as the former tend to minimize the number of suppliers they use to increase their efficiency.

The growth the category is experiencing, coupled with such fierce competition is, in turn, spurring a new consolidiation wave among private label players, as they look to further consolidate their market gains and diversity and increase the quality of their offering.

Not all categories within private label have reached the same level of consolidation, Sectors like cereals, coffee roasters, soft drinks, frozen vegetables and laundry dertergents are more consolidated than confectionary, hand-held ice cream or pet food, according to de Jong.

To read the full article

Brexit will become a reality

The United Kingdom continues to respect all European rules and retains access to the internal market and to the Customs Union now that it is still in the transition period.

Currently, the United Kingdom and the European Union are engaged in negotiations on their future relationship, in order to determine in particular the trade rules that will apply at the end of the transition period on December 31, 2020.

Whatever the outcome of these negotiations, the end of the transition period will have consequences for citizens and economic actors, whether an agreement on the future relationship will be concluded or not. Therefore, the end of the transition period should now be anticipated.

For its clients IPLC consultants have put together a list of Government Departments, Associations and Institutions where useful information is offered to prepare for the planned exit of the United Kingdom from the EU.

Many of the websites link to webinars that address key questions from manufacturers, suppliers and other industry stakeholders. Among the topics are new formalities and control processes of those using the North Sea routes between UK and EU ports and the transport infrastructure of the Short Straits.

Carin van Leeuwen joins IPLC

We are pleased to announce that Carin van Leeuwen has joined the office of IPLC in the Netherlands in the position of Partner Benelux.

Carin has worked for many years in various commercial positions with the leading producers in the dairy industry, holding responsibility for the negotiation of large private label contracts with national retailers.

For a period of 7 years (2012-2018) she was Unit Manager at Jumbo Supermarkten. She held responsibility for almost all product groups covering fresh, ambient, frozen and non-food. She also spent a few years managing the private label department.

Carin:
“Within the supply chain of fresh categories transparency and provenance are at the base of quality and sustainability. Whilst working at the retail side after my 24 years experience in the dairy industry I considered that my knowledge and experience would be very useful to support suppliers in fresh categories. Therefore, I am delighted to join the IPLC and this team of international consultants”

Koen de Jong, Managing Partner IPLC:
“Carin has gathered a wealth of private label knowledge covering both manufacturing and retail, which will add true value to our team. Experience of working on both sides of the supply chain has taught her how to build successful and lasting partnerships. IPLC will continue to expand our pool of private label professionals with extensive knowledge and experience in retail and manufacturing.”