ROSEMONT, Ill. -- The current situations and prospects for private label in Europe are indicators that over the next two decades the industry will experience strong global growth, according to Jean-Pierre Bonvallet, director of International Business Development for the Private Label Manufacturers Association.
Bonvallet, who addressed attendees last week during the session "Private Label Trends in Europe" on the opening day of PLMA's annual trade show here, said there has been a tremendous evolution in the quantity, as well as quality, of private-label lines overseas. According to PLMA research, volume and value are the highest in the United Kingdom, and rounding out the top-five leaders, in descending order, are Belgium, Germany, France and the Netherlands.
In most countries Center Store products lead the overseas charge into the private-label arena. For example, in France, the three leading categories [volume share by product department] are frozen foods with 36.9%, paper products with 36.8% and grocery with 28.9%. Statistics in other countries shows frozen foods as volume leaders in Belgium with a 57.9% share, paper products lead Germany with a 48.4% share and Italy does well with private-label pet food and care products, which represent a 26% share.
Bonvallet told attendees that, as in the United States, the industry has moved from generic brands with low prices and high margins through "me-too" products to becoming real value-added brands that stimulate customer loyalty and play a significant role in building a store's image. Demographically speaking, PLMA's research shows that people under the age of 25 are more aware of private label, compared to the level of awareness five years ago, in every country, Bonvallet said. In addition, compared to one year ago, twice as many overseas consumers are more likely to buy private label than manufacturers' brands.
Despite the tremendous strides the industry has made in the European market, certain factors have yet to be overcome. The top three retailers -- Wal-Mart, Carrefour-Promodes and Metro-AG -- represent nearly or more than 50% of the market in most countries. Also, the different cultures in particular regions make it difficult at times to use the same private-label lines. Being able to adapt to specific markets is key, Bonvallet said, citing Carrefour-Promodes' Reflets de France, De Nuestra Tierra and Terre d'Italia lines, the same line tailored to specific countries.