Power of Private Label - UGentxgellync/Rob/PrivateLabel_RMS.pdf · Private Label share still only at 5% – For example, Shampoo Private Label products available in 37 of 38 countries

Copyright 2005 ACNielsen Global ServicesConfidential and ProprietaryCopyright © 2005 ACNielsen

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The Power The Power of Private Labelof Private Label 20052005A Review of Growth Trends Around A Review of Growth Trends Around the Worldthe World


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The Power of Private LabelThe Power of Private Label Includes Both Retail Includes Both Retail Measurement Data and Consumer Data Measurement Data and Consumer Data

ACNielsen retail data included for 38 countries in five regions– Europe, North America, Emerging Markets, Asia Pacific, Latin

America80 categories were reviewed from 14 larger product areas

– Alcoholic Beverages, Snacks & Confectionery, Shelf-Stable Food, Frozen Food, Refrigerated Food, Diapers & Feminine Hygiene, Health Care, Baby Food, Non-Alcoholic Beverages, Personal Care, Home Care, Paper Products, Plastic Bags & Wraps, Cosmetics, Pet Food

In addition, ACNielsen consumer data was included across 14 countries in four regionsDue to differences in volumetric measures across countries, value sales were used in the analysisData covered 12 months ending April 2004 vs. April 2005


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ACNielsen Data Covered Most Channels…ACNielsen Data Covered Most Channels…

Sales within supermarkets, hypermarkets and mass merchandisers generally included. Sales from convenience stores and drug stores are also included in some countriesFor most countries, department stores, cash & carry outlets, wholesalers and food service outlets are excludedCertain retailer specific exclusions should be noted:

– Lidl excluded from Czech Republic, Slovakia, Austria, Finland, France, Greece, Ireland, Netherlands, Norway, Portugal and Sweden

– Aldi excluded from Australia (liquor), Denmark, Ireland, France, Netherlands (PL products), United States

Wal*Mart data in the US was included via ACNielsen HomescanCategory coverage varied across countries dependent on data availability


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Key FindingsKey Findings


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17%

23%

16%

6%

4%

2%

0% 5% 10% 15% 20% 25%

Global

Europe

North America

EmergingMarkets

Asia Pacific

Latin America

Canada and United States complete top 10

Europe Maintained its Position as Most Developed Private Europe Maintained its Position as Most Developed Private Label Region…Label Region…Emerging Markets Saw the Fastest GrowthEmerging Markets Saw the Fastest Growth

5%

4%

7%

11%

5%

5%

0% 2% 4% 6% 8% 10% 12%

Global

Europe

North America

EmergingMarkets

Asia Pacific

Latin America

PL Value Share PL Value Growth

Includes 8 of top 10 countries ranked on Private Label


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-20%

0%

20%

40%

60%

0% 20% 40% 60% 80% 100%Retailer Concentration

PL Share

Retailer Concentration Correlates with Strong Private Label Retailer Concentration Correlates with Strong Private Label Development…Development…United States Only Exception Among Top Ten PL CountriesUnited States Only Exception Among Top Ten PL Countries

Highest Potential for Private Label

Growth

Japan

Italy

Colombia

South Korea

Thailand

US

Chile

Croatia

Hungary

South Africa

SingaporeGreece

Spain

Germany

GB

Canada

France

Switzerland

Australia

AustriaNew Zealand

Sweden

Norway

Finland

Denmark

Argentina

Brazil

Portugal

Puerto Rico

Israel

Mexico

Hong Kong

Belgium

Ireland

Netherlands

Philippines

SlovakiaCzech Republic

Global Private Label Share 17%

Average Retailer Concentration 60%


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Private Label Growth Outpaced Growth of Manufacturer Private Label Growth Outpaced Growth of Manufacturer BrandsBrands

Private Label sales outpaced manufacturer brands in two-thirds of the countries studies (26 out of 38)Private Label sales grew by 5% overall, manufacturer brands grewby only 2%Europe, the most developed Private Label market, saw the greatest gain in share points

– Private Label sales grew by 4% in Europe

– Sales of manufacturer brands remained flat

– Private Label gained 0.7 share points


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Spain Saw Strongest Gains in Private Label ShareSpain Saw Strongest Gains in Private Label Share

16% 14%8%

16%10%

3% 3%

77%

15% 14%

-6%-2% -3% -2% -2% -2%

1%0%6% 5%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Spain Slovakia Netherlands Finland Sweden France Germany Croatia Hungary Norway

1.8% 1.6%1.6% 1.5%PL Share Gain

PL Growth

Manu Growth

1.4% 1.0% 1.0% 0.8% 0.8%0.9%

Growth


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Growing Presence of Hard Discounters…Growing Presence of Hard Discounters…A Contributing Factor to Private Label GrowthA Contributing Factor to Private Label Growth

Hard discounters sell a very limited selection of products at a very low priceMore importantly for this study, hard discounters mostly sell Private Label products

– For example, Private Label products account for approximately 95% of sales in Aldi

As hard discounters continue to grow and gain share (more stores, wider consumer acceptance) so does Private Label


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Looking at Product Areas…Looking at Product Areas…Refrigerated Food Had the Highest Share of Private LabelRefrigerated Food Had the Highest Share of Private Label

32%

31%

25%

21%

19%

14%

14%

12%

10%

9%

6%

5%

2%

2%

0% 5% 10% 15% 20% 25% 30% 35%

Refrigerated Food

Paper, Plastic & Wraps

Frozen Food

Pet Food

Shelf-Stable Food

Diapers & Fem Hyg

Health Care

Non-Alco Beverages

Home Care

Snacks & Confectionery

Alcoholic Beverages

Personal Care

Cosmetics

Baby Food

9%

2%

3%

11%

5%

-1%

3%

3%

2%

8%

3%

3%

23%

13%

-5% 0% 5% 10% 15% 20% 25%

Refrigerated Food

Paper, Plastic & Wraps

Frozen Food

Pet Food

Shelf-Stable Food

Diapers & Fem Hyg

Health Care

Non-Alco Beverages

Home Care

Snacks & Confectionery

Alcoholic Beverages

Personal Care

Cosmetics

Baby Food

PL Share PL GrowthIncludes 3 of top 10 categories ranked on Private Label

Also includes 3 of top 10


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Personal Care, Cosmetics and Baby Food Saw Lowest Personal Care, Cosmetics and Baby Food Saw Lowest Level of Private Label ShareLevel of Private Label Share

These three categories also saw the lowest level of Private Label share in 2003 studyPersonal Care products were available in most countries but Private Label share still only at 5%

– For example, Shampoo Private Label products available in 37 of 38 countries measured. (Shampoo Private Label only 3% share)

Availability of Private Label products more of a limiting factor for Cosmetics and Baby Food

– Private Label Lip/Stick and Eye Shadow only available in half the countries measured

– Private Label Baby Food only available in six of 32 countries measured

Cosmetics and Baby Food did however see the fastest Private Label growth in the last year


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Refrigerated Complete Ready Meals Saw Strongest Gains Refrigerated Complete Ready Meals Saw Strongest Gains in Share of Private Label …in Share of Private Label …

4%4%

-6%

-1%

5%

1%1%

4%

1%

7%

9%8%

-2%

7%

12%

10%

13%12%

7%

14%

-10%

-5%

0%

5%

10%

15%

Meat/ Poultry/Game

(Refrigerated)

MilkPlastic Wraps/Rolls

Toilet CareDog FoodButter/Margarine

WaterCooking OilFish/Shellfish/Seafood(Frozen)

CompleteReady Meals(Refrigerated)

PL Growth

Manu Growth

PL Share Gain

1.6% 1.5% 1.4% 1.3% 1.3% 1.2% 1.1% 1.0% 0.9% 0.9%

Growth


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Private Label Active in the ‘Hottest’ CategoriesPrivate Label Active in the ‘Hottest’ Categories

In addition to the 80 categories studies we also looked at the top categories from our What’s Hot in Food & Beverages and Personal Care studies published in 2004What’s Hot in Food & Beverages study identified Soy Based Flavored Drinks as the fastest growing category, growing by 30%Looking at a more comprehensive category definition, the aggregate of Soy Based Drinks and Milks (flavored and unflavored)

– Total Category grew by 26% over last 12 months

– Private Label brands captured a 5% share and grew by 45%

What’s Hot in Personal Care identified Tooth Stain Removers and Whiteners as the fastest growing category

– Total Category declined by 25% over last year

– Private Label brands held a 5% share and experienced 66% growth


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Private Label Brands Priced A Third Lower than Private Label Brands Priced A Third Lower than Manufacturer BrandsManufacturer BrandsEmerging Markets had the Largest DifferentialEmerging Markets had the Largest Differential

-31%

-40%

-37%

-27%-25% -25%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%Global

EmergingMarkets Europe North America Asia Pacific Latin America

Czech Republic -44%

Hungary -43%

Slovakia -38%

Brazil -20%

Puerto Rico – 19%

Colombia -19%


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Personal Care Private Label Products Priced with the Largest Personal Care Private Label Products Priced with the Largest Discount…Refrigerated Food with the Highest Private Label Discount…Refrigerated Food with the Highest Private Label Share Had the Smallest Price DifferentialShare Had the Smallest Price Differential

-46%-42%

-37% -36%-34%

-32%

-27% -26% -26%-24% -24%

-20% -20%

-16%

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

Personal

CarePet

FoodHea

lth C

areHome C

areDiap

ers &

Feminine Hyg

iene

Non-Alcoholic

Bev

erages

Shelf-Stab

le Food

Alcoholic

Bev

erages

Snacks &

Confec

tionery

Baby Food

Paper,

Plastic &

Wrap

s

Cosmeti

csFro

zen Food

Refrigerated

Food

After Shave -55%

Mouth Wash – 51%

Shampoo -51%

Complete Ready Meals -11%

Cheese -16%

Meat/Poultry/Game -16%


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Private Label Brands Meet Consumer Needs Beyond a Private Label Brands Meet Consumer Needs Beyond a Low PriceLow Price

In the more developed markets, retailers are developing their own lines to respond to growing consumer needsIn addition to a general improvement of quality, Private Label offerings now also focus on providing healthy alternatives

– Tesco Tesco FinestTesco OrganicsTesco Free FromTesco Healthy LivingTesco Carb ControlTesco Fair TradeTesco Kids

– President’s ChoicePC Blue MenuPC OrganicsPC Mini Chefs

In addition, retailers have used the equity of their Private Label brand to develop other services such as mobile phones and financial services


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Private Label Private Label ConsumersConsumers


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50% 70% 90%

Colombia

Chile

Singapore

Hong Kong

Australia

Finland

Italy

US

Canada

France

Spain

Great Britain

Germany

Switzerland

Private Label Products were Purchased by Nearly All Private Label Products were Purchased by Nearly All Consumers within these CountriesConsumers within these Countries

Household Penetration

100%


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18%

23%

11%

12%

59%

34%

26%

45%

44%

73%

54%

82%

55%

70%

0% 20% 40% 60% 80% 100%

Colombia

Chile

Singapore

Hong Kong

Australia

Finland

Italy

US

Canada

France

Spain

Great Britain

Germany

Switzerland

EightyEighty--Two Percent of British Shopping Trips Included Private Two Percent of British Shopping Trips Included Private Label ProductsLabel ProductsFrequency of Purchase Found to Be a Key Driver of Private Label Frequency of Purchase Found to Be a Key Driver of Private Label ShareShare

low

med

high

Share Level

Average 67%

Average 42%

Average16%

Share of All Shopping Trips


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Low Income Private Label Buyers Allocated More of Low Income Private Label Buyers Allocated More of Total Spend to Private Label BrandsTotal Spend to Private Label Brands

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Europe North America Asia Pacific Latin America

Income Level

Low Medium High Low Medium HighLow Medium HighLow Medium High

Share of Spend


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Private Label Buyers With Large Families Allocated More Private Label Buyers With Large Families Allocated More of Total Spend to Private Label Brandsof Total Spend to Private Label Brands

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Household Size

Small Medium Large Small Medium Large Small Medium Large Small Medium Large

Share of Spend


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Share of Spend for Private Label Differed Across Age Share of Spend for Private Label Differed Across Age Groups and Across CountriesGroups and Across Countries

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Age of Household

Young Middle OldAged




Share of Spend


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Detailed Findings Detailed Findings by Regionby Region


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EuropeEurope

45%

30%

28%

26%

25%

24%

22%

17%

14%

14%

11%

11%

10%

8%

7%

4%

3%

0% 10% 20% 30% 40% 50%

Switzerland

Germany

Great Britain

Spain

Belgium

France

Netherlands

Denmark

Sweden

Austria

Italy

Portugal

Finland

Norway

Ireland

Greece

Israel

PL Share PL Growth

Israel

Top 7 Countries Ranked on Private Label ShareRanked 9th

Included in Top Ten PL Growth Countries

0%

3%

1%

16%

2%

3%

8%

1%

10%

4%

9%

7%

16%

14%

13%

24%

-10%

-15% -10% -5% 0% 5% 10% 15% 20% 25% 30%

Switzerland

Germany

Great Britain

Spain

Belgium

France

Netherlands

Denmark

Sweden

Austria

Italy

Portugal

Finland

Norway

Ireland

Greece


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North AmericaNorth America

19%

16%

14% 15% 16% 17% 18% 19% 20%

Canada

UnitedStates

4%

7%

0% 1% 2% 3% 4% 5% 6% 7% 8%

Canada

United States

PL Share PL Growth

Ranked 8th and 10th

on Private Label Share


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Emerging MarketsEmerging Markets

10%

10%

7%

4%

2%

0% 2% 4% 6% 8% 10% 12%

Hungary

Slovakia

Czech Republic

South Africa

Croatia

PL Share PL Growth


15%

14%

4%

6%

77%

0% 20% 40% 60% 80% 100%

Hungary

Slovakia

Czech Republic

South Africa

Croatia


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Asia PacificAsia Pacific

12%

9%

4%

4%

3%

1%

1%

0%

0% 5% 10% 15%

New Zealand

Australia

Hong Kong

Japan

Singapore

Thailand

South Korea

Philippines

PL Share PL Growth

Hong Kong


3%

6%

-1%

5%

16%

18%

17%

2%

-5% 0% 5% 10% 15% 20%

New Zealand

Australia

Japan

Singapore

Thailand

South Korea

Philippines


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Latin AmericaLatin America

4%

4%

3%

3%

2%

1%

0% 1% 2% 3% 4% 5%

Brazil

Puerto Rico

Chile

Argentina

Colombia

Mexico

5%

-12%

13%

18%

15%

-9%

-15% -10% -5% 0% 5% 10% 15% 20%

Brazil

Chile

Argentina

Colombia

PL Share PL Growth

Puerto Rico

Mexico



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Detailed Findings Detailed Findings by Product Areaby Product Area


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Refrigerated FoodRefrigerated Food

47%

43%

33%

28%

21%

15%

0% 10% 20% 30% 40% 50%

Complete ReadyMeals

Milk

Cheese

Meat/Poultry/Game

Butter/Margarine

Yogurt

14%

8%

8%

9%

10%

5%

0% 5% 10% 15%

Complete ReadyMeals

Milk

Cheese

Meat/Poultry/Game

Butter/Margarine

Yogurt

PL Share PL Growth

Ranked 2nd, 3rd

and 10th on PL Share

Included in Top Ten PL Growth Categories


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Paper Products, Plastic Bags & WrapsPaper Products, Plastic Bags & Wraps

49%

40%

33%

31%

30%

24%

0% 10% 20% 30% 40% 50% 60%

Aluminum Foil

Garbage/RefuseBags

KitchenPaper/Towel

PlasticWrap/Rolls

Toilet Tissue

Facial Tissue

-2%

3%

4%

-2%

3%

-1%

-4% -2% 0% 2% 4% 6%

Garbage/RefuseBags

KitchenPaper/Towel

Toilet Tissue

Aluminum Foil

Plastic Wrap/Rolls

Facial Tissue

PL Share PL Growth

Ranked 1st, 4th and 9th


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Frozen FoodFrozen Food

39%

39%

38%

32%

18%

17%

16%

0% 10% 20% 30% 40% 50%

Meat/Poultry/Game

Fish/Shellfish/Seafood

Vegetables

Potato Fries

Ice Cream/FrozenYogurt

Pizza

Complete ReadyMeals

4%

7%

2%

0%

1%

1%

4%

0% 2% 4% 6% 8%

Meat/Poultry/Game

Fish/Shellfish/Seafood

Vegetables

Potato Fries

Ice Cream/Frozen Yogurt

Pizza

Complete Ready Meals

PL Share PL Growth

Ranked 5th, 6th and 7th


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Pet FoodPet Food

22%

20%

19% 20% 21% 22% 23%

Dog Food

Cat Food

12%

8%

0% 5% 10% 15%

Dog Food

Cat Food

PL Share PL Growth



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ShelfShelf--Stable FoodStable Food

36%

30%

28%

26%

23%

16%

12%

12%

11%

9%

7%

0% 10% 20% 30% 40%

Vegetables

Cooking Oil

Jam/Jelly/Marmalade

Rice

Dry Pasta

Ketchup - TomatoBased

Mayonnaise

Wet Soup

Breakfast Cereals

Savory/NeutralCrackers

Dry Soup

1%

12%

-1%

4%

4%

3%

4%

4%

7%

0%

3%

-5% 0% 5% 10% 15%

Vegetables

Cooking Oil

Rice

Dry Pasta

Ketchup - Tomato Based

Mayonnaise

Wet Soup

Breakfast Cereals

Savory/Neutral Crackers

Dry Soup

Jam/Jelly/Marmalade

PL Share PL Growth

Ranked 8th


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Diapers/Feminine HygieneDiapers/Feminine Hygiene

17%

10%

0% 5% 10% 15% 20%

DisposableBaby Diapers

FemininePersonalHygiene

0%

-1%

-1% -1% -1% -1% 0% 0% 0%

DisposableBaby Diapers

Feminine Personal Hygiene

PL Share PL Growth


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Health CareHealth Care

16%

14%

13%

0% 5% 10% 15% 20%

Self-AdhesiveDressings

ColdRemedies

Pain Relief

6%

8%

0%

0% 2% 4% 6% 8% 10%

Self-AdhesiveDressings

ColdRemedies

Pain Relief

PL Share PL Growth


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NonNon--Alcoholic BeveragesAlcoholic Beverages

19%

16%

14%

14%

13%

9%

8%

5%

0% 5% 10% 15% 20%

Juice/Juice Based Drinks

Flavored Milk Drinks

Water

Tea

Coffee

Drinking Yogurt

Carbonated Beverages

Sports Energy Drinks

Juice/Juice Based Drinks

PL Share PL Growth


-3%

9%

13%

0%

3%

28%

2%

8%

-5% 0% 5% 10% 15% 20% 25% 30%

Flavored Milk Drinks

Water

Tea

Coffee

Drinking Yogurt

Carbonated Beverages

Sports Energy Drinks


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Home CareHome Care

19%

17%

13%

13%

10%

8%

6%

3%

0% 5% 10% 15% 20%

Auto DishDetergent

Toilet Care

Hand DishDetergent

FabricSofteners

HouseholdCleaners

LaundryDetergent

Fresheners /Deodorizers

InsectControl

4%

7%

0%

0%

2%

0%

8%

-7%

-10% -5% 0% 5% 10%

Auto DishDetergent

Toilet Care

Hand DishDetergent

FabricSofteners

HouseholdCleaners

LaundryDetergent

Fresheners /Deodorizers

Insect Control

PL Share PL Growth


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Snacks/ConfectionarySnacks/Confectionary

16%

9%

8%

7%

1%

0% 5% 10% 15% 20%

Sweet Biscuits(Cookies)

Cereal/Fruit/MuesliBars

Chips/Crisps

Chocolate

Chewing Gum

6%

11%

2%

13%

23%

0% 5% 10% 15% 20% 25%

Sweet Biscuits(Cookies)

Cereal/Fruit/MuesliBars

Chips/Crisps

Chocolate

Chewing Gum

PL Share PL Growth



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Alcoholic BeveragesAlcoholic Beverages

19%

12%

11%

3%

0% 5% 10% 15% 20%

Vodka

Wine

Whisky

Beer/Lager/Ales

10%

-1%

3%

8%

-2% 0% 2% 4% 6% 8% 10% 12%

Vodka

Whisky

Beer/Lager/Ales

Wine

PL Share PL Growth


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Personal CarePersonal Care

13%

10%

9%

9%

6%

6%

6%

5%

4%

3%

3%

3%

3%

3%

0% 2% 4% 6% 8% 10% 12% 14%

Mouthwash

Cleansing - Bath/Shower

Toothbrushes

Skin Tanning (Protection)

Facial Cleansing

Body Moisturizers

Disposable Razors

Hair Styling

Toilet Soap

After Shave Preps

Face Moisturizers

Shampoo

Deodorants

Toothpaste

Skin Tanning (Protection)

Toothpaste

After-Shave Preps

PL Share PL Growth


2%

3%

1%

-12%

7%

6%

12%

2%

2%

0%

13%

3%

3%

-4%

-15% -10% -5% 0% 5% 10% 15%

Mouthwash

Cleansing - Bath/Shower

Toothbrushes

Facial Cleansing

Body Moisturizers

Disposable Razors

Hair Styling

Toilet Soap

Face Moisturizers

Shampoo

Deodorants


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CosmeticsCosmetics

4%

2%

0% 1% 2% 3% 4% 5%

Eye Shadow

LipStick/Gloss

PL Share PL Growth


34%

16%

0% 10% 20% 30% 40%

Eye Shadow

LipStick/Gloss


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Baby FoodBaby Food

2%

1%

0% 1% 2% 3%

BabyFormula

Baby Food

11%

20%

0% 5% 10% 15% 20% 25%

BabyFormula

Baby Food

PL Share PL Growth



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SummarySummary


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Private Label continues to grow… Private Label continues to grow…

Private Label outpaced manufacturer brands in over two-thirds of the markets measuredEurope remains the region with the highest share of Private Label

– Switzerland maintains its position as the country with the largest share of Private Label value sales at 45%

Refrigerated Food found to be the product area with the largest Private Label share (Paper, Plastic & Wraps still high at #2)Globally, Private Label products priced, on average, a third lower than manufacturer brandsRetailer concentration continues to be a contributing factor in the growth of Private LabelGrowth of hard discounters will continue to influence the development of Private Label


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Almost all Households Purchase Private Label…Almost all Households Purchase Private Label…

Private Label Share was highest among larger families and those with lower incomesFrequency of purchase was found to be a key driving factor

How far will Private Label go?How far will Private Label go?The growth of Private Label will continue.

– Private Label products today are being introduced into both new markets and categories

The introduction of more premium lines has changed both the shape and perception of what a ‘store brand’ can beHow far Private Label will grow???? It is yet to be determined.

Documents

Power of Private Label - UGentxgellync/Rob/PrivateLabel_RMS.pdf · Private Label share still only at 5% – For example, Shampoo Private Label products available in 37 of 38 countries