Private label pushes towards high-end beverages in Europe, Canadean
Private label drinks products, such as own brand ranges from supermarkets, are known for low prices at the expense of quality. However, more and more private label drinks products can be found in supermarket aisles reserved for ‘premium’ name brands, a new report by Canadean has found.
According to the report, private label soft drinks are seeing notable success in the Western European premium market, with ready-to-drink iced coffee drinks forecast to grow by 8 per cent in 2014.
“Ready-to-drink coffees were traditionally considered to be premium and therefore private labels used to struggle to achieve the same sales numbers as branded products,” said Michael Wiggins, Analyst at Canadean. “This is largely due to the image that private label products are of lower quality which made it difficult to attract consumers who would be willing to try the drinks,” he said.
Shift to premium to do with pricing
Canadean‘s report further revealed that this trend was caused by retailers realising that the soft drink market could be approached by up-scaled product ranges.
“The trend towards premium private label drink products has a lot to do with pricing,” Mr Wiggins said. “Consumers expect private label drinks ranges to be lower in quality because of the low price point,” he said.
“However, once the price and packaging of private label ranges are up-scaled, consumers feel that the quality gap between branded and private label products decreases,” Mr Wiggins said. “The appeal of entering the premium market to retailers is undeniable, given the higher profit opportunities these products offer,” he said.
Evolving super-premium market
Australian Food News reported in September 2014 that Canadean had found it was unlikely to be too long before the first products personalised to consumers’ unique needs became available.
Canadean said this meant that there was likely to be a brand new “super-premium” end to markets, which would allow the price of all products to drift upward as the price frame of the market is changing.
“Over the longer term it will be interesting to see the effects of these trends on private labels,” Mr Wiggins said. “On the one hand this will allow private label producers to gain a larger price advantage, but, on the other hand, it may be harder to achieve that initial push in convincing consumers of the product’s quality,” he said.