Loyalty shifting from branded products to retailers, says Verdict

New report predicts branded FMCGs are set for a tough time going forward.
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Verdict Research's new report on major retailers' private label relaunches during the downturn has found that, although the rapid growth seen by private label is coming to an end, branded FMCGs are still set for a tough time going forward.

Consumers across Europe have been migrating to private label offerings since the fourth quarter of 2008 and, as a result, value has become the main objective in retailers' private label development.

Major European grocers - including Tesco, Carrefour and Metro - launched 'fighter' ranges, new private label lines clearly positioned at the value end of the market.

Verdict is predicting, however, that after the recession there will be a shift back to the higher end private label ranges, which incorporate premium aspects such as organics or Fairtrade. This will mean the 'fighter' ranges will lose momentum and shelf sapce, although they will not disappear altogether.

However, Verdict goes on to say that FMCG producers are not yet through the worst. Private label as a whole will continue to gain share at the expense of branded goods.

The major opportunity open to FMCG producers is to look for new distribution channels, such as launching their own stores, investing in direct consumer contact through the internet or bypassing the supermarkets and trying new locations and channels (such as non food stores).

Another possible growth avenue is launching new value versions of branded goods themselves.


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