Latest research from Mintel reveals that for the first time, in 2011, the proportion of own label New Product Development (NPD) overtook branded in the UK.
Historically, the proportion of new product development within food and non-alcoholic drinks has been higher for brands than for private labels. While brands held a 55% share of total NPD in 2010, the balance tipped in 2011 in favour of own labels as they accounted for 54% of NPD, compared to 46% for brands.
Today, some 57% of consumers think that own label products have improved in taste and quality, while 52% actually prefer them to brands in some cases. Furthermore, some 82% of adults think that own label products provide value for money, compared to just 16% for brands.
Some 80% of shoppers buy own label products (compared to 89% of consumers who buy branded goods), and retailers’ own products look set for further growth in 2012 as consumers expect to buy more of them. What is more, as many as 20% of those who buy branded products are set to buy less in the coming year.
Chris Wisson, senior food analyst at Mintel, said: “While there are signs that pressure on consumer budgets is slightly easing, 2012 looks set to see the majority of adults remaining watchful and discerning when shopping.
“Our research suggests that on balance, consumers expect to buy more standard and value own label foods while cutting back on brands.”
Mintel’s research reveals that the market for own label food and drink reached £37bn in 2011, a 24% increase since 2006. This growth has come at a slightly faster rate in relation to the wider market, which grew by 23% over the same period.
The own label market is expected to show similar growth trends in the coming years and is projected to reach £46bn by 2016.
69% of Brits buy economy own label food and drink products. While there are signs of the recession easing somewhat, its continued impact is still being felt by consumers. Indeed, just 6% of adults who currently buy economy own label products expect to reduce their usage in the coming year, while one in eight (18%) current users expect to buy more in the year ahead.
Premium own labels have also fared well in recent years despite budgetary pressures and are bought by 71% of UK consumers. Growth also looks set to continue in this segment, with 27% of adults expecting to buy more of these products in 2012 and only 12% to cut back.
The progress of own labels is such that over half (52%) of adults prefer the taste of own label products to branded equivalents in some cases, suggesting that they are increasingly becoming brands in their own right.
However, despite over half of adults thinking that own label products have improved in taste and quality, 58% of adults still say that for some foods, only brands will suffice, with premium products in particular offering brands a safe haven.
Source: Mintel
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