Innovation and value to counter private label growth: Kellogg’s

Posted by Daniel Palmer on 22nd June 2009

As retailers expand the offerings of their own brands, the world’s largest cereal manufacturer has contended that the threat of private label can be quelled by continued product innovation and a renewed focus on value.

“Companies that continue to invest in the recession will be the successful ones,” Kellogg’s UK Marketing Director Kevin Brennan said at a briefing in London, according to just-food. “(Private label) has been very much driven by retailer visibility rather than consumers swaying to it.”

The maker of All Bran and Corn Flakes admitted, however, that the threat of private label was high.

“Private label is an element that the trade have in their armoury that’s very relevant to consumers,” UK Sales Director Mike Taylor advised.

The company has launched a range of new products around the world this year as they try to ensure the consumer is presented with exciting new options that can’t be matched by retailers. And it appears to be working as they fail to see consumers showing caution towards new products and sales rise.

Last year, net sales growth of 9% was attributed, in part, to new product innovations, with CEO David Mackay noting that the strong result came amidst an environment where retailers had begun “push(ing) private label pretty hard”.