Own-label NPD takes over branded for the first time
The proportion of own label New Product Development (NPD) overtook branded in the UK in 2011, according to Mintel.
The research found that 54% of NPD was for own brands, up from 45% in 2010.
Coming in the same year that both Tesco and Morrisons have created new packaging for their own label products, it was discovered that 80% of shoppers buy own label products, while 89% buy branded products, although 20% said they intended to buy less branded goods in the next year.
Mintel’s research found that the market for own label food and drink reached £37 billion in 2011, a 24% increase since 2006.
Chris Wisson, senior food analyst at Mintel, said: “While there are signs that pressure on consumer budgets is slightly easing, 2012 looks set to see the majority of adults remaining watchful and discerning when shopping. Our research suggests that on balance, consumers expect to buy more standard and value own label foods while cutting back on brands.
“Retailers are appearing to put greater weight behind their own label ranges in attempts to encourage consumers to switch into using them. More comprehensive ranges, product improvements and even range relaunches have all put greater pressure on food and drink brands.
“Times have changed and there is no longer a perception about own label equating to lower quality. Our research shows that many affluent consumers do not necessarily dismiss own label products out of hand, but they appear to in fact be keen users in certain categories. The increasing credibility of private label products which, crucially, often undercut brands on price is a warning for brands who are under increasing pressure from consumers who are becoming more open to the idea of buying own label groceries.”