Editorial Are private brands spelling the end of small premium brands?

Are PRIVATE BRANDS spelling the end of small PREMIUM BRANDS?

Interesting trends emerge from NielsenIQ's latest analysis of the first four months of 2022. First, the positive trends in the FMCG sector recorded during the two-year full pandemic have been shaken by rising inflation and slowing economic growth due to the current geopolitical scenario. Above all, the combination of these elements is creating an entirely new landscape for the large-scale retail sector in Italy, which will have a profound impact on Italians' buying behaviors and habits and outline new consumption scenarios. Private label trends also highlight these trends. As we had seen in the analysis entrusted to Plef in the January issue of PLM, private brands - born as an emulation of industrial brands - have today totally changed their skin, segmenting themselves and becoming promoters of innovation. But lately we are witnessing one more evolution. Already visible over the past few years and also evidenced by NiensenIQ's unequivocal data: the premium segment of PL is growing more than any other (+9.6% on a total PL average of 2.9%). These numbers are a testament to how private label is increasingly seeking both to satisfy customers and to capture emerging trends. Where customers are looking to PL for the quality and gratification they can no longer discern in industrial brands. Even to the detriment of both other private supply segments and lesser-known industrial brands, which are in danger of disappearing. So the real question will be how PL will reconcile their convenience nature with an increasingly premium demand. In second place in terms of performance, however, we find first price with +6.7%. Even in private label, therefore, we see the same phenomenon that involves FMCG in general: the progressive polarization of purchases. A phenomenon that occurs not only in Italy, but all over the world. Two growths at the extremes of the price scale that come at the expense of the belly of the market, where PLs were born. So the chase has begun on the one hand to the top of the range, perhaps absorbing the plurality of small premium brands, and on the other to the discount store, which is then the fastest growing channel after e-commerce. The challenge will be in being able to find the balance between these two extremes.

Maria Teresa Manuelli Editorial director