AMSTERDAM, Netherlands (FNS) -- International Spar's program of pan-European private-label grocery products has registered impressive sales gains in its first year, and the group's members have begun to step up the rollout of the products in 1994.
So far the products are being offered by Spar-affiliated supermarkets in Austria, Switzerland, the United Kingdom, Germany and the Netherlands and now Ireland, which introduced them early this year.
The association of wholesalers, which supplies
about 20,000 food retailers worldwide, introduced the new line in October 1992 to make its own brand more recognizable throughout Europe. The range covers products sourced by individual Spar countries as well as about 50 products to be centrally sourced by International Spar.
The first centrally sourced product, canned tuna, was introduced in January. The eventual plan is to have a line of up to 600 private-label products under the Spar banner, said Laura Haynes, managing director of Beresfords Design, London, which came up with the concept.
The program allows each country to adapt the products to its particular market while maintaining a unified brand image. It includes a manual for each Spar country explaining details of the packaging and the three levels of private-label products to be sold: generic with a plain white label, middle-market products with a more elaborate label and high-end products.
The three levels are designed to accommodate different attitudes toward private-label products in Europe. In the United Kingdom, for example, private label is seen as equal to major brands, while in Germany they are seen as low-cost, lower-quality alternatives.
The levels also represent the different strengths of the Spar brand throughout Europe. In Austria, for example, Spar has about 17% of the grocery market. It represents 8% of the German market, 4% in the Netherlands, 2.6% in the United Kingdom and about 1.2% to 1.3% of the German-speaking part of Switzerland.
The market furthest along with the new products is Austria. Spar Austria relaunched its private-label teas and pickled salad in fall 1992 with new packaging, and both have realized significant sales increases, said Werner Parkos, marketing director of Spar Austria.
Sales of Spar's private-label tea rose 60%, Parkos said. "We didn't change anything with the tea except the design," Parkos said, adding that the new product wasn't advertised or given increased display space.
"We are convinced the new international design gives us a big opportunity to increase sales. Beginning this year we will begin to do more advertising of our own brand on television, in newspapers and at point of sale."
Spar Austria followed those two products with the relaunch of about 12 others and the introduction of private-label mayonnaise. Early this year it launched private-label milk in a 1-liter (aseptic) Tetrapak as well as tuna.
"Because of the success of the program, we now plan to double the number of private-label products we introduce each year to about eight to 10," Parkos said, adding that private label represents about 10% of the company's wholesale sales. "That excludes relaunches of existing products."
The Spar Austria executive also hopes International Spar will step up the rollout of centrally sourced products in 1994. Austria, the Netherlands and Switzerland already share some products, but Parkos maintains that this should increase.
"We are very glad we now have this program," the executive said. "My hope is that every country sooner or later will have it. The difficulty will be the centrally sourced products, however. It will be difficult to come up with one product for all of Europe."