There is no stopping European private label – for now

Private label has performed extremely well in European food retail. Its recent success is often attributed to consumers becoming more price sensitive during the period of high food price inflation. However, that explains only part of the story. Over the past decades, private label’s market share gains have also been driven by higher consumer awareness, stronger food retailer commitment, and the professionalization of private label supply. These are the same three factors we identified in 2011 as the main forces behind private label’s advance.

In more mature western European markets, private label’s value share is now rapidly approaching 50%, which raises the question of whether there is still room for growth or whether private label has hit its ceiling.

The good news for private label is that RaboResearch still sees ample room for further market share gains, even in mature markets. The point of saturation has not yet been reached among consumers, food retailers, or private label suppliers.

The bad news for brand manufacturers is that private label share gains tend to be sticky with both consumers and food retailers. To defend their position and potentially regain some ground, brand manufacturers will need to raise their game in premiumization, innovation, and distribution power.