Total global trade spend is now estimated to be over $125 billion, well above the total profits of the major retailers, and McKinsey estimate it to be typically 30% of an FMCG manufacturer’s cost base, second only to the cost of goods at 40%. Most manufacturers now spend more on trade marketing than brand/ consumer marketing
3,200 Members in the Private Label Manufacturers Association. The market to supply private label is competitive - private label sales were more than US$60 billion in 2011 and no manufacturer
can expect to succeed if their approach is half-hearted.
The most vulnerable brands to private label are not the strongest but the weakest. Manufacturers have one advantage that can never be overcome if used witli focus, vigour and investment and that is innovation. Yogurt, seemingly an ideal category for private label to take the lion’s share, has seen private label share decline. The top-five leaders, Danone, Yoplait/Sodiaal, Yalkult Honsha, Nestle and Muller represent half of all yogurt sales. Their innovation has been developing premium products, like pro-biotic yogurt and yogurt enhanced witli fruit, and tliey launch continually; between 2006 and 2010 Danone introduced nine new products.
Spar South Africa Private Label Strategy “There are now around 400 SPAR private label items making up about 10% of total sales. The products compete directly with A-brands and their prices are slightly discounted. However, the SPAR range is being extended and will include more upmarket and premium-priced products as well. The SPAR Fresh Line range includes ready meals and prepared foods and is also being extended at present. All products bear the hallmark SPAR logo.”
Pick ‘n Pay Private Label Strategy “Private label has gained importance fast at Pick n Pay in recent years, as it has in South Africa as a whole. At Pick n Pay, private label accounted for 11% of sales in 2007 but increased to 29% in 2011, carried by an offer of around 2,000 SKUs.To promote its private label approach of good, better and best, in October 2011, Pick n Pay added a new premium private label to its offer under the name of ‘Finest’. The label offers products from all over the world, such as Kalamata olives, organic coffee from Antigua, fine Belgian chocolate and premier South African rooibos tea. In addition, the label will provide customers with a seasonally changing choice of products.”
Shoprite Private Label Strategy: “Shoprite has several private labels ranges in its store formats that are estimated to make up about 10% of grocery sales and are growing faster than national brands. Ritebrand is Shoprite’s key in-store brand, both in its domestic market of South Africa and abroad, and is placed in the economy price segment, targeting Shoprite supermarkets’ core consumer group. The products range includes household items such as tin foil, detergents and paper products, and food products such as pasta, grains & flours and other ambient lines. It is easily spotted on the retailer’s shelves due to its eye-catching and simple red-white colouring. At the Checkers stores, which target above-average income customers, Shoprite sells the Checkers brand, which comprises most grocery ranges.”
Staples ran a two-page ad in the August issue of Conde Nast Publications’ Teen Vogue announcing its participation in the magazine’s inaugural “Back-to-School Saturday” shopping holiday on Aug. 11. (See “’Teen Vogue’ Sells …” in Related Articles.) The event also presented a cause overlay that has Staples promising $2,500 toward its annual “Staples for Students” school-supply drive (see “Staples Tries …”) once Teen Vogue’s recently released “Inside App” hits 15,000 downloads. The magazine, meanwhile, pledges $1 to the cause for each of the first 2,500 shoppers to check in at a Staples store via the app on Aug. 11.
Also plugged were new lineups of private label items designed in various themes, as well as the retailer’s “Back-to-School Savings Pass.” (See “Staples Guarantees …”)
Source: Path to Purchase Institute
Procter & Gamble ran a series of ads in the August issue of Conde Nast Publication’s Teen Vogue spotlighting Pantene, CoverGirl, Olay and Tampax as official participants in the magazines first-ever “Back-to-School Saturday” shopping holiday while touting a free Teen Voguenotebook with purchase of two SKUs. (See “‘Teen Vogue’ Sells …” in Related Articles.) The event mixed editorial-style pages depicting Teen Vogue “It Girls” engaging in extracurricular activities with more traditional ads employing official spokespeople.
Procter & Gamble dove deep into the back-to-school season this week with a two-page FSI spotlighting its “School the Nation” cause campaign. The spread promoted a rebate offer that triggers a $5 donation to Communities In Schools, a nonprofit that works with local businesses, agencies and other organizations to provide needed resources to public schools. Consumers who buy $25 in P&G products receive a $5 rebate by mailing in a form located on a dedicated getgivesave.com website, store receipts and UPCs. Showcased brands included Puffs, Duracell, Tide, Bounty, Herbal Essences, Venus, Olay, Always, Crest and Old Spice.
Del Monte Corp.’s flagship brand presented new Fruit Cup SKUs in a back-to-school themed FSI with a “Be a Lunchbox Hero” message. Target received an overlay in some markets.