The current economic crisis, in addition to a change in values, provides us with a new scenario in the purchasing decision process where consumer habits have changed and private labels are gaining ground over manufacturer brands.
The large chains already account for 32% of the sector's total sales, Spain has become the first European country with the greatest dominance of the private label, surpassing Germany, which was the traditional fiefdom of the white brands in consumer products.
Three large groups, Carrefour, Eroski and Mercadona already control the 59% of all packaged food according to Nielsen data.
The most striking case is that of Mercadona, which with more than 1,200 supermarkets in Spain obtains a 20% share of the market in value. This impact is greater if we see that its own brands ( Hacendado, Deliplus or Bosque Verde) represent 50% of Mercadona's sales, a percentage that increases day by day with the new strategy that has involved the elimination of 800 references, many of They are from leading brands.
What can be done from the manufacturer's perspective, is there a way back?
Although the outlook is complicated for manufacturer brands, they are already beginning to show their teeth. The strategy is quite clear, trying to generate some escape route in the waterline of private labels, which is product quality, playing with the emotional concept of “security” in the consumer environment.
I call it colloquially "risk factor", the communication idea is simple, if private labels obtain up to a 50% discount on their products compared to the manufacturer's brand, they cannot offer the same quality.
We are faced with the classic concept of “food security” and even more so if we play with inclined targets such as families with children or products that provide a vital nutritional contribution.
We have witnessed two very clear strategies, Danone as the standard-bearer of “we do not manufacture for other brands” as a sign of corporate identity that clearly expresses the concept “whew, yourself, if I were you I would not risk it with other products since we do not manufacture them”, seasoned with a very rational communication of a scientific nature (university, laboratory, nutrition, award) as its axes.
Another example is that of Leche Pascual, which very clearly breaks down the concept of the price paid for its “brick” of milk. It is an excellent communication, in my modest point of view, since it manages, according to Pascual milk sources, to “offer the consumer very high quality products that guarantee their health.”
The battle has begun and we will see whether or not the “risk factor” prevails in other manufacturer brands and we are witnessing a new culture of communication, where the confrontation occurs between pure price sensitivity (white label) and quality transformed into risk as a deterrent (manufacturer's brand).
I clearly position myself in favor of manufacturer brands, by professional default but above all by belief in the business values that these brands contribute to the growth of an economy and their contribution to the country's GDP.
