Private label sales are down across almost all European countries, with mid-sized brands and smaller companies performing best.
These are the findings of the most recent IRI Markets Dashboard report, which tracked FMCG trends across Western Europe and the US, identifying ongoing and emerging trends in the food and drinks sectors.
The report said that the shift towards medium and smaller brands and companies reflected “consumer expectations for more local and healthy products”.
The report noted the “unprecedented value sales growth” of 9% across food and drink during the height of first European wave lockdowns, with growth still strong, but now sitting at around 3%.
Against this backdrop, private label in food and drinks have fallen away, shrinking respectively by -6% and -3% as a share of the market, as the impact of “range optimisation that retailers have undertaken” feeds through.
Online sales, though, continue to grow for large retailers excepting discounters, with this sector suffering from low investment in ecommerce channels.
The report predicted that with many consumers continuing to work from home and dine out less, that the emphasis on healthier, local produce with discernible provenance would remain high.
“Innovations will shift the focus from price to consumer experience with new expectations. Brand equity and innovation is the must-have that drives category growth and/or the footfall that retailers need,” said the report.
It added that range shrinkage was an opportunity to realign portfolios more closely with evolving demand under the new norm, while stressing the need to ensure good stock levels to avoid out-of-stock situations as online continues to grow.
Local and small brands were also identified as “acquisition opportunities for companies that need to expand in new consumption universes”.
The report was based on data gathered up to 23 August 2020.