Crunchy times for brands
In my younger days I’d take an annual trip over to Ireland to watch the horse racing at tracks around the country and on my return I would religiously bring back as many bags of Tayto cheese & onion flavour crisps as was feasibly possible to carry through airport security.
My appetite for this delicacy would build up over the course of the year because they were not available in supermarkets on the mainland at the time. These annual jaunts were my opportunity to refill the coffers. In my opinion they are the undisputed king of crisps.
Subscribe to TRBIt is a flavour the Irish company developed way back in March 1954 (Walkers copied it later the same year and it remains its best-selling flavour). Prior to this there was only one flavour of crisp – salt. Surprisingly, salt & vinegar flavour did not appear until over a decade later in 1966.
If Tayto’s were still unavailable today in mainland supermarkets then I would not be overly concerned because it is widely assumed that the company also produces the own label cheese & onion crisps for Aldi so I often go for this option. It is an indication that own label is so often on a par with branded goods. And if they are not the exact same product then they are very often an incredibly close copy.
This is no doubt one of the drivers in the continued rise of own label products within the UK and across the major grocery markets in Europe. The volume of such products has reached 52% of the market, according to analysis by Circana, which is an increase of three percentage points over the past 12 months and further growth is expected.
This rise has certainly been felt by Paolo Bonsignore, COO of food at Co-op Italy, who when speaking at the World Retail Congress in Berlin earlier in the year highlighted how the company had doubled its own label sales from 22% to 45% of total revenues (across 5,000 SKUs) that had transformed the business. The range encompasses eight private in-house brands involving food and non-food categories.
Also helping push up own label sales is food inflation, whose surge has resulted in retailers frequently turning to these ranges as a way of maintaining their value credentials. They have used the likes of everyday low pricing, price matching, and in-store promotions to drive sales of their in-house ranges.
Consumers have lapped up the competitively-priced goods. Research from The Harris Poll UK has found 25% of consumers switch to cheaper alternatives when brands become too expensive. However, there is still some work to do on own label as the research also found some 64% of consumers believe branded products are better than own label, with 57% believing they taste better. Aldi cheese & onion crisps anyone.
But things are clearly moving in the right direction for own label because a hefty 83% of shoppers believe these products have improved significantly and narrowed the gap with brands to the extent that the price premiums of brands are under serious threat.
Bonsignore cited research from Havas’ Meaningful Brands Study that suggests as many as 78% of brands could disappear and most people wouldn’t care. This highlights the exceedingly tough position that many brands now find themselves in and is a scenario that is creating fertile ground for own label brands to grab further market share.
