Private Label Brands: Catch the new wave before it sinks you!

About three months after the world greatest private label trade show, PLMA 2018, we would like to take a look back and share some of our thoughts, facts and ideas with you. We’d like to offer our experience-based thinking to all of you readers (wholesalers/distributors/retailers or business professionals) who might be interested in PL (private label) brand trend happening globally. What can you do about it?

PL might sound complex, but the reality is, with the right supplier as a partner you will go through this process smoothly, successfully and relatively fast. Complexity depends on supplier’s experience and knowledge of PL as well as deep understanding of production capacities, costs, package and logistic optimization etc. Thus, be careful when you make your decision. It’s vital for your PL brand success. We’ve been through this process many times and we’ll try to share our experience with you as simple and useful as possible.

In this post we will present some data on PL trends globally. We would like to show you the incredible potential you should start exploiting now in case you still haven’t. It’s important to process the numbers in order to better understand the reasoning we will share further in our future posts where we will speak about topics like: the reasons to launch a PL brand despite the fact you are not a retailer, verifying your readiness for a PL brand launch, what it takes to launch a PL brand, how to make PL brand supplier evaluation and many other PL brand related challenges. Now let’s go through the key numbers.

PrivateLabel_STATS2018_infographic

PL brands keep growing across Europe. According to Nielsen data the PL brands now “stand at 30% or above in 17 countries” out of 19 countries tracked. Consumer confidence in PL brands keeps getting stronger. Following latest Daymon Private Brand Intelligence Report 2018, consumers look for more solutions rather than individual brands (US market shows the private brands outpaced national brands by about 8 times with an increase in sales by 4% compared to an increase in sales of national brands of 0.5%). Furthermore, Daymon’s report claims that 74% of surveyed consumers say private brands are better value for the money than national brands; 53% say they shop at a store specifically for its private brand; 59% believe private brands offer greater variety; 85% trust private brand at least as much; 84% believe in quality of PL brand at least as much and 81% buy PL brands on every or almost every shopping trip. These are some serious numbers to look at, especially if we take into account PL roots in the food industry.

A brief timeline: when initially introduced (in the 50s), PL food brands were considered as a cheaper alternative to regional, national or international brands with significantly lower quality and lack of variety. This consequently led to a small market share. Then, in the 70s their share began growing, but still their quality was perceived as inferior. The focus was on good margins only. Next significant period to look at is 2007-2012 when the PL brands experienced robust growth. Normally, in times of crises, consumers cut expenditures, making PL brands sales flourish. As the economy was improving, there was a slight decline in PL brands sales due to various reasons: 1) more money in the pocket made consumers switch back to their favourite brands; 2) more money helped national brands too, allowing them to aggressively respond to the rise of PL brands with heavy promotions and marketing activities all over the world and 3) very important change happened: PL brands started to invest in quality and variety, thus they slightly increased prices. This is when PL brands took a new direction: quality and innovation fight and not price fight only.

From today’s perspective, we see it was the right direction to take because they reached a new era in their evolution. Consumers now compare PL brands to A brands (you can check a recent interesting article on this topic here).  If they kept being the cheap option with limited offer then in good times, with more money to spend, consumers would have totally abandoned PL brands or they would have brought PL to a survival stage at least. Instead, we see a new rise on the horizon and a serious threat for the A brands.

A completely different image of PL brands is in front of us each day we go shopping: beautiful, attractive package designs with high quality content, in varieties that many of the A brands do not offer and all this at more competitive prices as compared to A brands. PL stopped being a finance tactic only. It’s become a strategy for market differentiation, creating and fostering consumer loyalty and driving consumer satisfaction. Even though there is still plenty of PL brands who maintain the image of low cost alternatives to national brands and this is totally fine, yet it’s a fact that the world of “premium” brands has opened the doors to PL brands too – something that probably could not be imagined back in the 50s.

Today we look at PL as a source of innovation and flexibility at competitive prices. That is why we recommend you to start developing your own brands among different product categories soon, just before the crowd arrives.

The facts above were shared in order to motivate you walk further and explore the PL brand opportunities. In our next post we will tell you why you should launch your own brand even though you are not a retailer. We as producers of PL brands have the chance to see this trend happening among wholesalers and distributors right in front of our eyes. Don’t waste time and get on board. We will help you pave the way to the next top brand of yours hitting great sales numbers globally!

 

We are always eager to hear your feedback, comments, suggestions and proposals on how to improve. Feel free to drop us an email and ask us any question that might pop up while thinking about this subject.

 

 

 

Advertisements

Via Prom on PLMA 2018 (29-30 May) in Amsterdam

Dear readers, we would like to inform you that for the fifth consecutive year Via Prom will present its products at PLMA trade show in Amsterdam. The event will take place in RAI Exhibition Centre, 29-30 May. 

Traditionally, Via Prom is putting efforts to support the New and Innovative Product Section which is part of PLMA by developing new product recipes. Again, this year some of our innovative proposals were selected and will be presented in the New Product Expo Section. We are excited to show you our innovations at our booth.

This year, our focus will be put on our sandwich cookies line. Via Prom aspires to become one of the leading producers of sandwich cookies, or cream cookies in South Eastern Europe. We are kindly inviting you to visit us and check out our offer. We are more than happy to discuss all types of possibilities for cooperation.

You will find us on the following location:

RAI EXHIBITION CENTRE, AMSTERDAM (FOOD SECTION)
RAI Europa Complex / Hall 3
Stand number: F-4099

Below you can find a sneak peek of our stand presentation. We are looking forward to welcome you at our booth.
Twini_Saem_Design

Do you want to sell more? Think Big, Think Lean, Think Different.

“The most dangerous kind of waste is the waste we do not recognize.” – Shigeo Shingo (Toyota)

lean_approach_managementRegardless whether you are a startup or well established company, a manufacturing / trading company of cookies or software development startup, it doesn’t matter. What matters nowadays is the lean approach. There is a necessity for this new way of business thinking to be applied in every company regardless of the industry, size or type of the company. Think big, think lean, think different – that’s our key to success. Now let’s find out more about the lean approach and its roots.

What is lean? – In plain words, the core idea of this approach is to make obvious what adds value while reducing everything else. This way the customer value is maximized while the waste is minimized. Thus, it’s a customer-centric methodology that continuously improves a process allowing the supplier to give the most to the customers with fewer resources.

According to Strategos Consultants “most companies waste 70%-90% of their available resources. Even the best  Lean Manufacturers probably waste 30%. Lean Manufacturing and Cellular Manufacturing improve material handling, inventory, quality, scheduling, personnel and customer satisfaction”.

What are its origins?

The lean concept goes back to Eli Whitney, the inventor of cotton gin who promoted the idea of “interchangeable parts” mode of production. By dividing labor efficiently and building accurate equipment that enabled the production of large numbers of identical parts quickly and at a relatively low cost he reached great production effectiveness because of which he’s considered as a pioneer of the interchangeable parts – concept.

Next, Frederick W. Taylor made his contribution to the lean business thinking by defining the concept of standardized work while Frank Gilbreth developed intricate studies of motion and invented the process charting. Additionally, Lillian Gilbreth conducted a deep research on work motivations and the way attitudes affected the outcome of a process. Certainly there were many other contributors who originated the idea of “eliminating waste” which is the basic tenet of lean manufacturing.

henry_ford_one_gettyAnd then, there is the Ford System – the first system that shows a comprehensive manufacturing strategy. Henry Ford is the first person to truly integrate an entire production process. “Ford lined up fabrication steps in process sequence wherever possible using special-purpose machines and go/no-go gauges to fabricate and assemble the components going into the vehicle within a few minutes, and deliver perfectly fitting components directly to line-side. This was a truly revolutionary break from the shop practices of the American System that consisted of general-purpose machines grouped by process, which made parts that eventually found their way into finished products after a good bit of tinkering (fitting) in subassembly and final assembly”, describes the Lean Enterprise Institute.

toyota-production-systemThen, Toyota Motor Company looked at this situation  and began to realize that a series of simple innovations might significantly improve the possibility to provide both continuity in process flow and a wide variety in product offerings. They began to incorporate Ford production  and other techniques into an approach called Toyota Production System or Just In Time . They recognized the central role of inventory. This is why the Toyota Production System is considered the leading lean exemplar in the world.

The lean thinking keeps spreading globally at a very fast pace. It goes beyond manufacturing; it expands to logistics and distribution, services, retail, healthcare, construction, maintenance, and even government. Indeed, the lean approach and methods are grabbing serious attention among senior managers and leaders in all sectors worldwide.

In our future posts we’ll talk more about the application of the lean approach in the manufacturing and distribution and logistics. In meanwhile we encourage you to share your thoughts in the comments section.

“The price of light is less than the cost of darkness” -Arthur Nielsen