PRIVATE LABEL INTERNATIONAL: SPRING 2017

SPRING 2017

PLUS Premium private brands Pasta and rice Oils and vinegars Coffee and tea Beauty care products

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Contents

12 22

18 24

30

FEATURES

REGULARS

Cover Story

4

Point of View

6

Market Report

12

Band of banners

Expert Insights 18

A cut above

Pasta & Rice

32 Ad Index 34 End Cap

22 Health kick

Oils & Vinegars

24 A taste for high quality

Coffee & Tea

26 Filling up the mug

About the Cover

Beauty Care

The photographs showcase a sampling of Ahold Delhaize’s 21 retail banners in Europe and the United States.

30 Superior products for ordinary consumers

Spring 2017

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POINT OF VIEW SP R I N G 2 0 1 7

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EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION

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Alan Glass Peter Hoyt Richard Rivera Jeff Greisch Len Farrell

Boer in charge, but he places customers first Dick Boer is a self-labelled supermarket “addict.” The CEO of Ahold Delhaize enjoys going into stores to peruse products and talk to customers.

“He’s emotionally invested in the business … the customers. That’s his world,” Rene Dahan, former Ahold chairman, told the Financial Times last year.

Ahold Delhaize, based in Zaandam, the Netherlands, is the result of the 2016 merger between Dutch grocer Ahold and its Belgium rival the Delhaize Group. Boer is in charge of an army of employees — 375,000 associates — who work at more than 6,500 stores under 21 banners in 11 countries. (See a profile of the company beginning on page 12.)

Like many of his peers, Boer grew up in the grocery business. As a teenager, he worked in his father’s store in Axel, a town in southwest Netherlands. Boer embraced the business and continues to do so.

Prior to the merger between Ahold and Delhaize Group, Boer was CEO of Ahold for six years. He previously served as CEO of Ahold’s Albert Heijn banner from 2000 until 2010 and as chief operating officer of Ahold Europe from 2006 until 2010. Boer joined Ahold in 1998 as CEO of Ahold Czech Republic.

Five years after he joined the company, Ahold endured a fraud scandal in which Boer was not involved and did not know about. Ahold’s former CEO and chief financial officer were found guilty and fined. Boer was shocked and wondered if Ahold, labelled as “Europe’s Enron,” would survive.

But Boer stuck with Ahold, despite the retailer taking a gigantic hit to its reputation. He made a name for himself for his operational efficiencies. In 2007, shareholders appointed him to the management board. He was named CEO of Ahold in 2010.

Last month, Boer addressed Ahold Delhaize’s first meeting of shareholders since the merger. A month earlier, Ahold Delhaize reported fourth-quarter earnings at the top end of estimates, which impressed analysts.

The solid earnings report is a reflection of Boer’s customer-centric approach.

“The wheel starts with our commitment to continuously drive savings to invest in the customer proposition and fund growth in our key channels,” said Boer, a champion of Ahold Delhaize’s private brands. “Saving to invest is core to how we do business.”

Throughout his address, Boer reiterated the relevance of serving customers through value (“being frugal is the new normal,” he said), health and well-being (“diet-related diseases like diabetes and obesity are a growing global issue”), convenience (“customers have busy lifestyles and still want to eat healthy and sustainable food”) and transparency (“customers demand relevant and personalized offers and information”).

Boer wants to serve them through Ahold Delhaize’s thriving store brands.

It’s a challenging but exciting time to be in the grocery industry. With Boer at the helm — and with his customer-first doctrine permeating the business — it appears that Ahold Delhaize is off to a favourable start nearly a year after the merger and has a bright future in front of it. n

Korry Stagnito Ned Bardic

Lawrence Aylward, Editor-in-Chief laylward@ensembleiq.com

Joel Hughes Greg Flores

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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We Do It All For Them

What is at the heart of store brands success? The consumer.

The men and women who shop in supermarkets and drug chains, mass merchandisers and convenience stores.

They are the reason that retailers offer their own brands and why manufacturers help supply the products. Make plans now for the store brands event of the year. More than 2,700 exhibit booths from the world’s leading private label suppliers. To exhibit or attend, contact PLMA today. Telephone +1 212 9723131 or email info@plma.com

12 -14 November•Chicago

MARKET REPORT

Industry Update

Fresh food, confectionery/snacks drive grocery growth in Western Europe Fresh food and confectionery/ snacks accounted for 61 per cent of the growth in the grocery market across Western Europe last year, according to recent Nielsen retail performance data.

Consumers spent €4.3 billion more on fast-moving consumer goods (FMCGs) at grocery retailers across the nine major Western European markets in 2016 than in 2015 — a growth

of 0.9 per cent. Fresh foods accounted for €1.6bn (38 per cent) of the overall growth, followed by confectionery/snacks (€1.0bn, 23 per cent) and alcoholic beverages (€849 million, 20 per cent). These three categories alone accounted for 80 per cent of increased grocery spend in 2016.

“Fresh food and confectionery’s growth were primarily driven by consumers buy-

ing more items, whilst alcohol’s was mainly driven by paying higher prices,” said Olivier Deschamps, senior vice president of Retailer Services Europe. “Interesting to see this significant growth coming from fresh food: fresh is clearly a strong focus for retailers, in order to attract shoppers and have a positive impact on their image. In terms of sub-categories, fresh meals, beer, fresh fruit and vegetables, and mineral water contributed the most to the grocery sector’s overall growth.”

Manufacturers outside the 10 biggest players accounted for 70 per cent of the growth in the Western European grocery market, whilst retailers’ private brands accounted for the other 30 per cent, according to Nielsen. Half of the growth (€2.2bn) in the overall grocery market was due to promotional items which “retailers increasingly used in 2016 to great success to encourage shoppers to add more items to their shopping baskets which was a major factor in the sector’s growth.”

French to remove ‘controversial’ substances from private brands French supermarket chain Super U, a division of the Rungis, France-based retailer coopera-

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tive Système U, has vowed to remove or reduce 90 “controversial” substances from its private brands, including palm oil, monosodium glutamate, aspartame, bisphenol A and highfructose corn syrup, noting consumer fears and the “cocktail effect,” according to a recent FoodQualityNews.com report.

The retailer based the list of chemicals on consumer concerns. “These concerns are amplified by television, print media and some scientific discussions but also by a lack of information,” Super U stated. “Consumers, rightly or wrongly, came to the conclusions on the toxicity of these substances.”

Super U also stated that it is targeting the chemicals partly because of the “cocktail effect” — the cumulative effect of many substances in the body even though they may individually be safe.

Lidl Germany obtains animal welfare seal for premium private brand milk Citing “quality and responsible behaviour having a top priority,” Lidl Germany said it has acquired an animal welfare seal, “Für Mehr Tierschutz,” for its premium private brand fresh milk in Bavaria. The milk will be sold under the brand “Ein Gutes Stück Bayern,” which means “a good piece of Bavaria.”

Private brands growing across C-stores in South Korea Convenience stores have begun producing their own private brands in South Korea, thanks to chains’ wide distribution capacities, according to a story in The Korea Herald.

“The private brand business here will continue to grow across all industries, centered on firms with strong distribution channels,” Suh Yong-gu, a professor of marketing at Sookmyung Women’s University, told The Korea Herald recently.

According to the report, the launch of 7-Eleven Korea’s private coffee brand Seven Café is a solid example of how an affordable private brand product has become a serious threat to existing brands. According to 7-Eleven Korea, Seven Cafe ranked No. 1 in terms of the number of products sold at the chain’s stores between 1 July and 16 November in 2016, marking the first time that a private brand outperformed established branded items sold at 7-Eleven outlets in South Korea.

“We are delighted that Lidl is our first partner to confirm the collaboration and that it has already launched its first product under our premium animal protection label, ‘For Animal Protection,’ ” said Thomas Schröder, president of the German Animal Protection Association. “Consumers have a buying alternative and can consciously opt for more animal protection when shopping. [Through] the entry into the animal protection label, Lidl takes a real step and gives a signal to other trading companies to also allow more animal protection in the markets.”

Aldi, Lidl reign in the UK Discounters Aldi and Lidl captured a record share of the grocery market in the United Kingdom, according to recent reports. According to Nielsen, the two supermarkets’ combined market share passed 12 per cent for the first time, accounting for almost £1 in every £8 spent on groceries. In the 12 weeks to 25 February, Aldi’s sales grew 12 per cent year on year and Lidl’s, 9.1 per cent.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said Aldi and Lidl have been “very astute at promoting the quality and price of their private label range to appeal to a wider array of shoppers.”

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MARKET REPORT

Industry Update

Vietnam’s convenience market will grow by double digits Vietnam is forecast to be the fastest-growing convenience market in Asia by 2021, according to recent data released by international grocery research organisation IGD, followed by the Philippines and Indonesia.

Asia’s grocery market is the largest in the world, with a predicted 6.3 per cent compound annual growth rate up to 2021.

Its size is forecast to reach €4.4 trillion by 2021: equivalent to Europe’s and North America’s combined.

In the convenience channel, IGD is forecasting high doubledigit compound annual growth over the next four years in Vietnam (37.4 per cent), the Philippines (24.2 per cent) and Indonesia (15.8 per cent), based on the performance of the leading convenience store operators in each

market. “The retail markets in these three countries are gradually shifting from traditional to modern trade, and there are several factors driving this: a positive economic outlook; a signifi-

cant increase in GDP per capita; deregulated markets encouraging more foreign investment; and rapidly changing shopper habits,” said Nick Miles, head of Asia-Pacific at IGD.

SP ON SORE D C ON TE N T

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All of the exhibitors on the Ireland stands are participating in Origin Green, Ireland’s national sustainability programme. Origin Green is helping businesses put their sustainability beliefs into practice.

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DIA Group, Eroski sign venture to develop private brands Spanish retailers DIA Group and Eroski Group are teaming to develop private brand products to “maximise the price-quality ratio” offered to customers. The new venture will work to improve the competitiveness of private brands and optimise the supply chain required to create these products, focusing on efficiency, according to a report in European Supermarket Magazine.

Eroski was the first coopera-

Spain, Portugal, Brazil, Argentina and China.

In a related matter, Eroski is revamping and expanding its gourmet SeleQtia range.

New products include fresh and frozen pizzas, fresh and dry filled pasta, Cantábrico sardines, and sweet pastries.

SeleQtia products do not contain GMOs, artificial colours or preservatives, or partially hydrogenated vegetable fat. Each product has a nutrition label on the front of the package.

tive distribution group in Spain, operating 1,877 establishments.

DIA group has 7,799 stores across

Premium private brands continue growth in UK Kantar Worldpanel expects premium private brand products to continue to grow in the UK this year.

Almost 90 per cent of shoppers buy “top tier” priACC_2017_PLMA_Ad_outlined 1 4/25/2017 3:04:08 PM vate-brandedcopy.pdf products, including Tesco Finest,

Sainsbury’s Taste the Difference and Morrisons’ The Best, according to Kantar’s latest grocery share figures. Premium own label sales accounted for 6.3 per cent of total private label sales in 2016.

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MARKET REPORT

Industry Update

Online private brands sales booming in India The private label segment of online retailing in India is expected to triple in sales to €4.6 billion in 2017, according to BusinessStandard.com, an Indian business news website.

According to Livemint.com, another Indian financial news site, online grocer BigBasket.com plans to extend its private brand offerings to non-food categories and offer more SKUs under its existing private brand lines.

As part of the expansion, BigBasket has developed private label wet wipes and disposable bags as well as other items. The company currently offers the following own brands: Fresho vegetables, fruit, meat and bakery products; Royal tea, cereal and other staple products; Tasties snacks; Fresho Signature cookies, dehydrated fruit and exotic baked

goods; and HappyChef condiments and ready-to-eat products.

Operate by Bangalore, Karnataka-based Supermarket Grocery Supplies Pvt. Ltd., BigBasket is “the best funded home-grown online grocer,” according to the Livemint article.

According to Hari Menon, chief

executive officer of Bigbasket, private brand revenue is increasing.

According to Livemint.com, BigBasket recently raised funds from venture debt firm Trifecta Capital to set up new warehouses and facilities for reprocessing fruits and vegetables and for strengthening the cold chain infrastructure.

Tesco leads growth of organic in Britain Organic foods in Britain are experiencing the strongest growth in customer demand in over a decade, according to Food & Drink Business Europe.

British grocer Tesco has seen organic sales rise by 15 per cent in the past year. The retailer has seen increasing numbers of customers looking to buy organic fish, dairy produce and general grocery items in addition to fruit and vegetables.

Tesco has committed to offering customers a wider range of quality organic foods in more of its stores and lower more stable pricing, according to the report.

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Free-from, organic food sales climb in Europe Sales of free-from and organic foods are climbing in Europe, according to recent data from Euromonitor International. In Eastern Europe sales of free-from and organic products were up 10.6 per cent and 8.8 per cent respectively in 2016 compared to 2015. In Western Europe, free-from foods increased 11.5 per cent while sales of organic rose 5.4 per cent.

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COVER STORY

Ahold Delhaize

By Lawrence

By SusanAylward Fenton

Band of Ban

Ahold Delhaize aims to have the best store brands in Europe under “Better Together.” It is a simple motto to what has been an intricate undertaking — the combining of Ahold and the Delhaize Group to form Ahold Delhaize, one of the world’s largest supermarket groups based in Zaandam, the Netherlands.

The merger was announced in June 2015 and became effective on 24 July 2016. Ahold Delhaize operates 21 retail banners throughout Belgium, the Netherlands, central and southeastern Europe and the United States. The company, which traces its roots back nearly 150 years, serves more than 50 million customers weekly in 11 countries through more than 6,500 stores.

Ahold Delhaize also maintains a robust assortment of store brands that are unique to each of its retailers, some of which in Europe include Delhaize, Ahold Delhaize’s banners include:

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Proxy Delhaize, Albert Heijn and Shop & Go in Belgium; Albert Heijn and Etos in the Netherlands; Alfa Beta and AB Food Market in Greece; Maxi and Shop & Go in Serbia; Mega Image in Romania; and Albert in the Czech Republic.

Since becoming CEO of Ahold Delhaize at the merger, Dick Boer, who once professed his passion for the business by saying he is “addicted” to supermarkets, has been talking up the company’s store brands. He says European consumers “believe in and trust” Ahold Delhaize’s private brand offerings and points to a 50 per cent penetration rate of store brands in Europe, which he calls “astonishing.’ ” “We have own brands which are loved by customers — a huge asset,” Boer said in April at Ahold Delhaize’s annual general meeting of

r ‘Better Together’ philosophy

shareholders. “If your store’s own brand is in your customer’s fridge, then it becomes personal. They allow us to distinguish from [brand] manufacturers’ [products]. And it is where we are innovative.”

Last December, Boer unveiled Ahold Delhaize’s “Better Together” strategy to fully capture the benefits of its retail banners to drive profitable growth in supermarkets, ecommerce and stores with smaller formats.

Under the “Better Together” strategy, Boer identified four themes to unite its banners: • affordable for all; • best own brands; • fresher and healthier; and • most local and personal service.

Photos courtesy of Ahold Delhaize

nners

Dick Boer says Ahold Delhaize’s private brands are “a huge asset.”

Boer says there is great potential to leverage best practices across the company’s banners, citing a “continuous improvement of own brands” and “transparent communication to customers.” Ahold Delhaize will study each banner’s store brand strategy and share best practices across banners to help improve those

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COVER STORY

Ahold Delhaize

LEFT: In Serbia, Tempo and other Ahold Delhaize banners have placed a great emphasis on personalisation.

RIGHT: By 2020, Ahold Delhaize wants 45 per cent of private brand sales to come from healthy products.

strategies, adds Ellen van Ginkel, the company’s director of external communications.

Those involved in that research will surely look to one of the company’s Belgium banners, Delhaize, which operates 141 stores, for its best practices. Fifty-five per cent of Delhaize’s sales come from private brands.

Delhaize offers three tiers of store brands: premium, mainstream and value. The premium tier, called Taste of Inspirations, features 146 products of “first quality,” with a focus on gourmet, authenticity and originality. The mainstream or Delhaize tier is the largest tier with 5,479 products that are billed as “quality products with great value.” Also in the mainstream line are the Care and Home store brands. The value tier, called 365, offers 471 products and consists of the “basic products at the lowest price.”

In addition to the three tiers, Delhaize also offers five “extra niche brands” that trumpet innovation. They include Bio, an organic line of 429 products that is one of Delhaize’s flagship

‘Better Together’ Under Ahold Delhaize’s “Better Together” strategy, there are four themes to unite the company’s 21 banners: 1 - affordable for all, 2 - best own brands, 3 - fresher and healthier, and 4 - most local and personal service.

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brands; Natural, a line of personal care products with made with natural ingredients; and Pamuka, consisting of 24 “specific qualitative nutritious but funny and tasty products” for kids.

Pamuka was created to address rising obesity issues among children.

Roel Dekelver, Delhaize’s head of external communications, says the banner is constantly researching new innovative products. “It’s part of our DNA,” he adds.

It’s also strategic in the sense that Delhaize works with local suppliers to develop such products that it knows won’t end up commercializing them.

How powerful are Delhaize’s private brands?

Consider that it offers 7,000 SKUs of store brands and 24,000 SKUs of national brands, yet the 7,000 SKUs of store brands generate 55 percent of the banner’s sales.

“That’s proof that we are going in the right direction,” Dekelver adds. “People are convinced in the quality of our private brands.”

Heeding Boer’s call for Ahold Delhaize to have the “best own brands,” Delhaize and the other company banners have a clear goal to use their store brands to differentiate from the competition. While price is still a motivating factor for European consumers to purchase private brands, so is personalization, Dekelver says.

“So we are launching private brands that meet the needs of our clients,” he says. The Pamuka line is a perfect example.

In Serbia, where there are three Ahold Delhaize banners, the emphasis is also on personalization, especially transparency. Consumers in Serbia are studying labels closely, says Milica Popović, corporate communications associate for Delhaize Serbia.

Photos courtesy of Ahold Delhaize

Ahold Delhaize’s three Serbian banners, including Shop & Go, offer more than 3,500 private-branded products, which were evaluated by a third-party research organisation as brands with good price/quality ratios.

“Consumers [want to know] the ingredients being used to make products,” Popović says.

“First, they want to know if natural products are made with as little additives as one product can possibly contain. Second, Serbians like to eat domestic, local products and therefore they appreciate products that are made in Serbia.”

“We have own brands which are loved by customers — a huge asset. If your store’s own brand is in your customer’s fridge, then it becomes personal. They allow us to distinguish from [brand] manufacturers’ [products]. And it is where we are innovative.”

— Dick Boer, CEO of Ahold Delhaize

Popović says the three Serbian banners — Maxi, Tempo and Shop & Go — have expanded their private-branded healthy offerings to include organic products, baked goods made with whole grains, and products enriched with vitamins and minerals that are also gluten-, sugarand lactose-free. The three banners offer several private label brands, including Premia, 365 and Od naše zemlje.

Premia, a mainstream tier with more than 1,000 locally sourced products, recently won the best private label brands category at the 2016 Best of Serbia awards, staged by the Serbian Chamber of Commerce. It was the third time in 12 years that Premia won the award, Overall, Ahold Delhaize’s three Serbian banners offer more than 3,500 products. According to GfK, an international market research organ-

isation, the banners’ private brands have been evaluated as brands with good price/quality ratios, which has spurred consumer confidence in them, Popović says.

GfK also listed Premia as having the highest awareness level among Serbian consumers.

“Our private label products are being bought significantly more than our competitor’s products,” Popović says. “But most important is the fact that customers recognize our private label products for their quality … We are constantly improving recipes and are expanding our assortment with new products that will comply with the eating and living habits of the people of this new age.”

While keeping prices low for private brands is not the only initiative — again, quality and innovation are vital — it is important. Boer says saving for customers begins with “buying better” and “operating smarter.” It is a reason why

Ahold Delhaize is taking a fresher, healthier approach at all of its banners, including Proxy Delhaize in Belgium.

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Ahold Delhaize

Photos courtesy of Ahold Delhaize

COVER STORY

LEFT: In Belgium, 55 per cent of Delhaize sales come from private brands. RIGHT: Premia, a mainstream tier with more than 1,000 locally sourced products, recently won the best private label brands category at the 2016 Best of Serbia awards.

Ahold Delhaize joined both AMS and Coopernic, two strategic buying alliances for European food retailers. According to Retail Analysis, which provides worldwide retail and consumer goods industry insight and analysis, buying from both allows Ahold Delhaize to benefit from both alliances’ strongly focused strategies and differentiated buying focus.

Boer recently announced that Ahold Delhaize is on track “with clear visibility to generating €500 million in net synergies in 2019.” While Ahold Delhaize will be “rigorously focused on cost discipline,” according to Boer, it will invest where there is opportunity, such as ecommerce.

Boer says Ahold Delhaize says it will build the leading ecommerce platform in the Netherlands and Belgium and plans to double net online consumer sales by 2020 from €2.3 billion in 2016.

Van Ginkel says online sales of Ahold Delhaize’s private brands will go “hand in hand” with the company’s goal to double sales.

Private brands will undoubtedly also play a role in Ahold Delhaize’s sustainability efforts. Boer says he wants the company to promote healthier eating and to reduce food waste, among other things.

“Our private label products are being bought significantly more than our competitors’ products. But most important is the fact that customers recognize our private label products for their quality.”

— Milica Popovic, corporate communications associate for Delhaize Serbia

“By 2020, we want 45 percent of own brand sales to come from healthy products,” he adds.

It all comes down to giving consumers what they want, with private brands playing a vital role.

“We are meeting the needs of customers today and anticipating those of tomorrow, by providing more value, quality and convenience,” Boer says. “Food retailers are evolving in line with these trends, our landscape is changing.

We see consolidation, we see new competitors coming in and our traditional ones are upping their games as well. We not only need to adapt constantly, we need to predict the next change and lead the way. n Delhaize’s Bio, an organic line of 429 products, is one of the banner’s flagship brands.

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Aylward is editor-in-chief of Private Label International.

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ANALYSIS

l

Premium Products

By Kathie Canning

A cut above

Premium private label products are in growth mode as UK consumers seek t

UK retailers of consumer packaged goods are learning that it pays to get into the premium private label game. According to Kantar Worldpanel, part of London-based Kantar, premium store brand food and drink sales rose 13 per cent in the 12 weeks to 4 December 2016.

“Following 18 months of deflation in the UK, retailers are looking for innovative ways to increase sales and win market share,” says Fraser McKevitt, grocery spokesperson for Kantar Worldpanel.

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“Premium own-label ranges represent the best a retailer has to offer in terms of quality, packaging and experience and can be an important factor in attracting shoppers looking for something special [and] who are willing to splash a little extra cash.”

Emma Clifford, senior food analyst with global market research firm Mintel, cites a rise in UK consumers’ disposable incomes — growth in average earnings has consistently outstripped inflation since October 2014 — as

a contributing factor to the recent success of premium private brand lines. But despite that rise, consumers “remain cautious” when it comes to spending.

“Trading up to premium [private brand] food and drink products requires a relatively small increase in spend, making this easily justifiable when people start to feel they have more money in their pockets,” she says.

Another plus for UK retailers: Premium private label products help them differentiate themselves

message on quality as well as value,” McKevitt says.

Natalie Berg, retail insights director for Planet Retail in London, says the discounters’ investment in premium private brands sends a “very clear message” to UK consumers: “You no longer need to go to Marks & Spencer or Waitrose to get luxury food.”

Meanwhile, premium private brand ranges help more upscalemarket retailers “reinforce their emphasis on excellence, creating a new ‘super-premium’ tier,” McKevitt adds.

to splurge, but cautiously

from the competition, McKevitt points out.

And it’s not just the traditional and upmarket retailers that are leveraging premium store brand ranges as a differentiation tool — the discounters are doing so, too. In fact, German retailer Aldi reported a 25 per cent sales increase in the UK, 2016 versus 2015, for its premium Specially Selected food range.

“For the discounters, this is a useful tool in changing brand perception and communicating a

SUPPORTING IN-HOME DINING The growth of premium private brands also meshes with shifting consumer behaviours related to dining out and “ordering takeaways,” Clifford notes. Because consumers only recently exited more austere times, premium store brand food ranges are positioned to thrive as consumers continue to limit dining out and takeaways to “occasional treat” status.

“The onus has been on the supermarket to rival restaurants’ and takeaways’ offerings in terms of quality and excitement,” she says, “and they have stepped up to this challenge, with foodservice trends being echoed in ownlabel innovation. Provenance and authenticity cues have also become ingrained here.”

Clifford says that private brand ranges, particularly on the premium side, are driving growth in chilled pizza and chilled ready meals. She says Marks & Spencer’s Taste brand has realized noteworthy success within the chilled ready meal space, continuing to introduce innovative cuisine. And London-based Marks & Spencer also is making the most significant gains in chilled pizza, but The Co-operative Food (part of The Cooperative Group in Manchester, England) is gaining share here, too

— fuelled by introductions under its premium Irresistible brand.

EMPHASIS ON INNOVATION, QUALITY Whether replacing a dining out/ takeaway occasion or fulfilling another consumer want or need, UK’s premium store brand products boast plenty of innovation and quality among them. And those attributes are highly critical to success in the current challenging private brands market.

In a 4 November 2016 webinar titled “Has Private Label Reached the End of its Shelf Life in Europe?”, Wiebke Schoon, senior research analyst for London-based Euromonitor International, explains that private brands have been losing share overall in Western Europe, including in the UK, following improvements to the economic outlook and rises in disposable income. But retailers are reacting.

“Retailers are focusing on quality, added value and innovation instead of just low prices,” Schoon explains.

Berg says all UK supermarkets have really “raised their game” when it comes to store brand innovation. For example, Bracknell, England-headquartered Waitrose introduced a meal kit bag, and Aldi launched “F&M-like hampers” during the Christmas season.

Speaking of Waitrose, the retailer’s super-premium Waitrose 1 range, introduced with 500-plus items in April 2016, has been a “resounding success,” Clifford says, showing that shoppers are inclined to trade up even at an upmarket retailer known for premium products.

The innovation here is tied to ingredient authenticity.

At the time of launch, Waitrose unveiled a TV advertising campaign that focused on the farms and plantations around the world that produce the ingredients for Waitrose 1 food items. The ads showed oranges being grown in SPRING 2017

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ANALYSIS

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Premium Products

Sicily and cocoa beans being grown in Tanzania to create Waitrose 1 Tanzanian Chocolate Ice Cream with Blood Orange Sorbet.

“This new Waitrose 1 campaign shows the care taken by our expert buyers to source fabulous flavours and authentic ingredients from this country and around the world,” said Rupert Thomas, Waitrose’s marketing director, of the ad launch.

Morrisons, headquartered in Bradford, England, also has been busy on the innovation front. The retailer relaunched its premium range, The Best, in October 2016, helping to drive strong performance over the Christmas period, Clifford says.

“Following 18 months of deflation in the UK, retailers are looking for innovative ways to increase sales and win market share.”

Fraser McKevitt, grocery spokesperson for Kantar Worldpanel.

Morrisons’ The Best range, which also promises authentic, high-quality ingredients, includes such products as Belgian Milk Chocolate Cookies, Red Thai Chicken Pizza and Chunky Thai Salmon & Prawn Fishcakes.

For London-based Sainsbury’s, cheese and coffee have been two

notable areas of private brand development under the premium Taste the Difference label.In March 2016, the retailer launched Taste the Difference coffee pods in four varieties: Intenso, Lungo, Ethiopian and Colombian.

“With high-quality taste at a reasonable price, our new Taste the Difference pods will delight coffee aficionados across the UK,” said Victoria March, Sainsbury’s product developer for hot beverages, at the time of launch.

And Sainsbury’s said in 2016 that it “continues to spearhead great British cheese.” The retailer works with more than 40 British cheesemakers and creameries to create numerous varieties, many of them under the Taste the Difference label.

For example, Sainsbury’s calls its Taste the Difference Shropshire Red cheese, also known as Red Fox, “the most successful new territorial cheese to be developed in the UK for many years.”

Similar to a Red Leicester cheese, it is aged for approximately 18 months to develop depth of flavour with caramel notes and a smooth, slightly crunchy texture.

“Our own-brand ranges account for around half of our foods sales,” Sainsbury’s states in its 2016 annual report. “Our premium Taste the Difference range grew volumes by nearly 2 per cent and continues to gain industry recognition, voted the Best Supermarket Range by the Good Housekeeping Institute for the third year running.”

AWARD-WORTHY The high quality of today’s premium UK private label products can be substantiated by the numerous recent awards bestowed on them.

For example, Welwyn Garden City, England-based Tesco, the ABOVE AND LEFT: Coffee and cheese have been two areas of private brand development for Sainsbury’s Taste the Difference range. Sainsbury’s said it “continues to spearhead great British cheese” and works with more than 40 British cheesemakers and creameries to create numerous varieties.

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UK’s largest grocery retailer, took home 64 medals in the UK’s second 2016 International Wine Challenge, with the majority of the winning wines offered under the Tesco finest premium brand. (The retailer had already received 43 medals in the first 2016 competition.)

Three Tesco finest wines won Gold Medals: 10 Year Old Tawny Port, Vintage Port and Viña del Cura Rioja Reserva.

“We’re delighted to have such a strong showing for our wines at the International Wine Challenge Awards,” said Jason Tarry, Tesco’s chief product officer, in a press release. “They demonstrate once again that our wines [offer] great quality as well as a great price, offering outstanding value for the money.”

And Leeds, England-headquartered Asda saw high praise for the mince pies it sells at Christmas time under its Extra Special premium label. The generous pies, which Asda says rely on modern technology to remove air, were lauded by BBC Good Food, the Good Housekeeping Institute and Delicious magazine.

GOING BEYOND FOOD Not all of the UK’s premium product development is taking place within the food and beverage space, of course. Aldi, in particular, is worth a mention for its development of premium private brand skincare products under its Lacura brand. In October 2016, the retailer introduced its Lacura Cuvée Royale Collection, a limited-time-only “luxury” anti-ageing skincare range said to combine “the very finest active ingredients with the latest high-tech research.”

And in February of this year, the retailer introduced the Lacura

Waitrose’s super-premium Waitrose 1 range, which includes ice cream, has been a major success.

Icellage Collection — a limited-edition, luxury anti-ageing skincare range for women aged 35-60. The collection features PhytoCellTec nunatak, which is said to contain a new generation of stem cells derived from the alpine flower, Saponaria Pumila.

OUTLOOK UNCERTAIN Despite all of the product development activity and growth, the future for premium private brand products in the UK is uncertain as the shopping environment continues to change.

“Inflation is already beginning to hit supermarket shelves, so we’re expecting shoppers to tighten their belts once again and

trade down to standard and value lines,” Berg says.

Clifford agrees that challenges to premium store brands are on the horizon.

“Retailers are focusing on quality, added value and innovation instead of just low prices.”

Wiebke Schoon, senior research analyst, Euromonitor International

“Only the products which have a tangible added-value point of difference are likely to keep their place in the shopping baskets of consumers who start feeling the squeeze,” she stresses. n

RIGHT: Aldi has released a range of premium private brand skincare products in its Lacura brand.

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PASTA AND RICE

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Category Update

By Rich Mitchell

Health kick

Retailers can add vitality to mature pasta and rice markets by marketing more functional store brands A focus on health could be the recipe for greater wealth in the pasta and rice sectors. With more consumers seeking betterfor-you items, retailers that frame store brands as healthier alternatives to traditional offerings can help invigorate an increasingly mature arena.

“The trend for gluten-free and low-carb diets and the vilification of wheat as a contributor to a variety of ailments and weight gain, have contributed to the flat and declining sales of pasta in many key markets,” notes Mintel, a global market research firm. “As a result, the pasta category is vastly different from what it was even five years ago, and wheat-free, gluten-free and better-for-you options are now part of the standard pasta range.”

Organic pasta also is becoming more popular as consumer demand increases for natural, unprocessed foods, Mintel adds in its January “Pasta, Rice and

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Noodles Global Annual Review 2017” report.

Gluten-free rice, meanwhile, is faring well compared to pasta in many markets as it becomes a key staple in a wider variety of cuisines, Mintel states. “Rice brands have also been quick to leverage the healthy image of ancient grains by producing rice and grain blends,” Mintel notes.

Indonesia is the leading international market for retail rice sales, with consumers purchasing an estimated 13.1 million tons in 2016, Mintel reports.

Next is China with 9.9 million tons, India at 3.3 million tons and Japan with 3.1 million tons.

Brazil is the top pasta sector, with estimated retail sales of 1.3 million tons in 2016. Next is Russia with 1.2 million tons, Italy at 917,000 tons and Germany with 618,000 tons.

Because Italy and many other core pasta markets are reaching saturation, merchandisers seek-

ing greater sales will need to offer more premium or value-added products, notes Euromonitor International Inc. in its December 2016 “Staples Overview: Exploring Possibilities for Growth in Rice, Pasta and Noodles” report.

Yet, there remain growth opportunities for both pasta and rice throughout the world, particularly among Middle Eastern, African and Asia Pacific countries that produce products locally, which makes the items more affordable, Euromonitor states. “If manufacturers are willing to invest, countries such as Iran, Egypt, Saudi Arabia and Malaysia could be lucrative, but partnerships will be needed,” Euromonitor reports.

A SHIFT FOR STORE BRANDS Indeed, because price is a major shopper issue, many international retailers already are leveraging private label items to attract cost-conscious consumers, and the improving quality of store brands also is helping to further squeeze the national brands’ market share, Euromonitor notes.

“Increasing private label sales has to be considered not only from a quantitative point of view, but also in terms of quality,” says Gianluca Ciamillo, marketing responsible at De Matteis Agroalimentare, a Flumeri, Italy-based pasta supplier.

“It’s not just a ‘save money’ choice as consumers are also looking for quality products.”

The merchandising of higher-end pasta is becoming increasingly important because of the maturity in many regions of standard semolina pasta, including Italy and other parts of Europe, he notes. The popularity of items that have high fibre and protein content also is likely to increase as more consumers focus on health and wellness, he states.

“Increasing private label sales has to be considered not only from a quantitative point of view, but also in terms of quality. It’s not just a ‘save money’ choice as consumers are also looking for quality products.”

Gianluca Ciamillo, De Matteis Agroalimentare

“Consumers are recognizing that pasta is not just a traditional and affordable comfort food but also a functional food that offers such benefits as omega and being gluten-free,” says Laura Dal Bo, director of marketing, communications and import brands for Canadabased Italpasta Ltd., a pasta supplier in Brampton, Ontario.

“They want clean labels with ingredients they both know and understand the benefits of.”

Yet, diverse shopper lifestyles and preferences in different regions are resulting in varying demands for products.

Organic pasta, for instance, is more popular in northern than southern Europe, while consumers in many other regions mostly focus on basic offerings, Ciamillo states.

“The diversity by culture is predominantly related to the type of wheat grown in each country and region,” Dal Bo adds.

“Traditional pasta thrives in climates where a good harder durum can grow, such as in Canada,

the U.S. and Italy, while a softer wheat is grown in Asia, lending itself better to noodles found in the region. But now there is a big ‘East meets West’ trend and consumers are experimenting with foods from different regions.”

To most effectively merchandise store brands in the divergent territories, retailers should list attractive attributes on packages and spotlight recipes in which the product is an ingredient, Ciamillo adds.

It also is important that retailers educate consumers on the benefits of the functional ingredients, Dal Bo notes. “Too many retailers look to launch a highprotein or high-fibre product but don’t take that extra step to have the proper information on the box,” she says. “Consumers are thirsty for better-for-you products and to capitalize on that trend, private label retailers need to inform the shopper better than the national brands.”

NEW RICE REQUIREMENTS Similar to the pasta sector, the rice market also is evolving as consumers become more sophisticated in their tastes, says Brett Vegas, marketing manager for U.S.-headquartered Sage V Foods LLC, a producer of ricebased ingredients in Boulder, Colorado.

“Simple parboiled white and brown rice, while still staples, don’t necessarily cut it anymore,” he states. “Consumers are wanting more interesting grains and exotic flavours, and are also expecting higher quality.”

More brand developers, meanwhile, are seeking differentiation by offering products with unique ingredients such as ancient or exotic grains, Vegas says.

“Those are particularly popular in the Middle East and Asia where the majority of the diet is grain-based,” he notes.

In addition, an increasing number of shoppers are seeking rice that they perceive as being more nutritious, he adds.

“Consumers are viewing plain white rice as being full of empty carbs and calories,” Vegas states.

“They are turning to more nutritionally dense grains like brown rice and wild rice that bring added protein, fibre and other nutrients to the plate.”

Indeed, the merchandising of products that are healthier and novel is a global trend, says Agron Kosova, manager of U.S.-based Fine Italian Foods, a supplier of rice and pasta in Naperville, Illinois.

“Many consumers are looking at what is new and different,” he states. “They are seeking more Asian grains like quinoa and higher quality and specialty pasta.”

Retailers, meanwhile, can further make their store brands more attractive by publicizing the origins of products and using different brand names in accordance with the country of origin, Kosova states. That may include, for instance, having a Chinese name on selections from the country.

There remain growth opportunities for both pasta and rice throughout the world, particularly among Middle Eastern, African and Asia Pacific countries that produce products locally, which makes the items more affordable.

Euromonitor International

“It is important that retail chains are always evolving their private label selections,” he notes. “Competition is growing every day in every market and consumers also can find any product on the Internet.

Only by offering more options can retailers survive in the marketplace.” n SPRING 2017

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Category Update

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OILS AND VINEGARS

By Dana Cvetan

A taste for high quality International private brand oil and vinegar markets reflect U.S. trends Foodie and health trends converge in the international edible oils and vinegars marketplace, where what is prized among those who value good taste is prized among the health-conscious as well.

If there is one over-arching theme, it’s that global consumers are expressing their preference for high-quality oils and vinegars much more so than they have in the past.

The reasons for this follow U.S. trends as well: evolving palates, increasing sophistication and concern for health and well-being.

“Quality and authenticity — those are the trends we see,” says Liz Tagami, general manager for U.S.-based Lucero Olive Oil in Corning, California. Lucero is an artisan producer that grows and mills 17 varieties of olives into extra virgin olive oil and exports to buyers in Canada, Central America, Hong Kong and Japan.

Lucero provides its buyers tasting notes and information on growing conditions to help them demonstrate product quality and authenticity to their consumers.

In the international private brand

market of a mere five years ago, “everyone was looking for the best price, and quality did not so much matter,” but that has changed, says Agron Kosova, manager of Naperville, Illinois, U.S.-based Fine Italian Food, the North American branch of Italy’s Compagnia Alimentare Italiana. The fourth-generation, family-owned company exports its products to 45 countries, including India, Australia, China, South Korea and Singapore.

Now, says Kosova, consumers want good quality oils and vinegars, and offering that is key to developing those private label markets internationally. “Over the years, consumers have gone from shopping for price alone to shopping for the best quality at a competitive price,” he notes.

Tagami agrees, adding that high-quality product offerings function as an effective marketing tool for retailers. “We’re finding an increasing number of retailers and entrepreneurs seeking unique flavours and high-quality oils to match their brand ideal,” she adds.

While the private brand market

is maturing, especially in Europe, offering high-quality product is the most effective way to grow the market, Kosova says. This strategy has worked very well in the United States for club retailer Costco, which he says is successful because of its high-quality standards for private brand merchandise.

France, Germany and England are following this tactic as well, Kosova says. “They are, of course, looking for the best price, but they are more concerned with trying to bring the best private brand to the marketplace.”

Consumers have the luxury of more options these days, and international consumers are more knowledgeable about edibles, says Andre Loyola, marketing consultant to U.S.-headquartered La Megara, a gourmet food distributor in Beverly Hills, California, with offices in Tunis, Tunisia. The familyowned company exports olive oil, dates, preserved vegetables, sardines, couscous and the condiment Harissa from Tunisia.

Australia is investing significantly in private brands, Loyola says. “People are shifting. They prefer high-quality, good-quality food, not junk. The market is responding.

The world’s markets are responding like they are in the U.S. to private label. Maybe not as fast as they do in the U.S., but they are responding.”

The opposite is occurring in cautious Japan, where government and economic policies as well as cultural norms discourage taking on a lot of risk or moving too quickly, Loyola says.

TRENDS AND TASTES Vinegar may have an unglamorous side — for instance, in its use as a household cleaner and weight-loss aid — but it’s the

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high-end, gourmet products that have traction in the international marketplace, Kosova says.

Organic vinegars, red and white wine vinegars and especially balsamic are increasingly popular with consumers. “In vinegar, we are seeing more and more that the higherend products are selling. Many chains are selling high-end vinegar in private label,” Kosova adds.

Tunisian olive oil, prized for its low acidity, boasts a pleasing taste and a texture that Loyola describes as “soft on the tongue.”

It is popular in Asia, especially Southeast Asia, though sesame oil is the more popular edible oil on that continent, Loyola says.

“People want to try more of the world’s tastes, and Tunisia has very good products because it has the Mediterranean climate and fertile soil,” Loyola adds.

Two main olive varieties are

grown in Tunisia. The Chetoui trees produce an all-purpose oil used in dressings, on salads and in cooking.

Oil from Chemlali olives has a light, smooth consistency and a contrast of fruity and bitter flavours. Chemlali is mostly used to drizzle over pasta, vegetable and grilled proteins.

Increasingly, retailers are looking for specific chemical and sensory parameters in the olive oils they sell, Tagami says.

Lucero promotes the quality of its product though its participation in the strictly monitored, mandatory Olive Oil Commission of California’s grade standard. This government agency regulates the authenticity and quality of olive oil under the general oversight of the California Department of Food and Agriculture. Lucero is also a member of the Extra Virgin Alliance, a global trade group of premium olive oil producers from 14 nations.

Gourmet olive oils are popular among the middle class in China, where premium-grade edibles are considered a status symbol, Loyola adds.

South America tends to follow U.S. product trends closely, as does Australia, Loyola notes. Flavoured olive oils, especially those infused with rosemary and garlic, are hot products, Loyola adds.

Another up-and-coming product is olive oil in a spray can, which allows for controlled, measured use. Compagnia Alimentare Italiana offers spray-can olive oil in a variety of flavours.

“We have had a lot of success with the spray olive oil all over the world, especially in the Middle East, in Dubai, and in South America,” Kosova says. “This packaging has been very successful. It’s easier, and simple to use. We are the only ones in Italy to make it this way.” n

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COFFEE AND TEA

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Category Update

Filling up the mug Retailers can add to the appeal of store brands by offering broader selections Greater worldwide demand for coffee and tea is generating abundant growth opportunities for product merchandisers. This includes retailers of store brands that are in position to bolster activity by responding to greater consumer interest in wide flavour options and convenience-oriented selections.

The global coffee market is growing steadily with an estimated retail volume sales increase of 2.7 per cent in 2016 following a 2.5 per cent rise in 2015, states Mintel, a global market research firm, in its January “Coffee Global Annual Review 2017” report.

Areas with the greatest expansion potential include Asia, as more consumers in traditional tea-drinking countries convert to coffee. The Latin American, North African and Middle Eastern markets also are set for vibrant retail coffee sales because of an emerging coffee shop culture, Mintel notes.

“The continuing worldwide consumption growth of coffee is dynamic,” says Clay Dockery, vice president of retailer brands for Massimo Zanetti Beverage USA, a Portsmouth, Virginia, U.S.-based coffee supplier. “Many coffee-producing countries such as Brazil, Indonesia and Vietnam also are some of the fastest-growing coffee consumers in the world, partly because many people who primarily drink tea as a hot beverage are switching to coffee.”

Indonesia is registering the strongest increase in retail coffee sales with a 19.6 per cent compound annual growth rate (CAGR) over the past five years, Mintel notes. Following are Turkey with a 17.5 per cent CAGR, India at 15.1 per cent, Vietnam with 14.9 per cent and Chile at 12.9 per cent.

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Countries with the slowest growth rates are Belgium and the Netherlands, both with a 0.5 per cent CAGR, Poland at 0.1 per cent, Australia at 0 per cent and Finland with a 3.7 per cent decrease.

While the European sector is highly mature, other Western countries still have strong expansion potential because of the popularity of coffee pods and capsules and chilled ready-to-drink coffee, Mintel states.

A COFFEE CONVERSION “In Western markets, coffee drinking has shifted from a commodity into a ‘craft,’ with a greater interest in coffee styles and sourcing of the best beans, and emerging markets will in time see the same process as their coffee ‘life-cycle’ evolves,” Mintel notes. “However, all consumers still value convenience intensely, hence the rise of the inhome coffee pod/capsule.”

The single-serve pods accounted for 26 per cent of all global coffee retail innovations in 2016, up from just 11 per cent in 2011, and are becoming prominent in such wealthier emerging markets as South Korea and China, Mintel reports.

Fuelling the popularity of ready-

By Rich Mitchell

to-drink coffee sales, Mintel adds, are younger consumers who have grown up on cold drinks and with a coffee shop culture that has heavily pushed cold coffee innovations.

By leveraging such products, retailers will be able to better position their store brands as affordable alternatives to away-from-home coffee options, Dockery states.

Merchandisers also will benefit from offering certified selections in response to growing shopper interest in social responsibility, he says.

Such certifications include Rainforest Alliance, in which coffee growers must meet stringent environmental, social and economic standards, and Fair Trade, which addresses poverty and the empowerment of producers in the poorest countries.

The greater interest by consumers in coffees from specific countries also is creating strong revenue opportunities for retailers that spotlight the origins of their store brands, Dockery says.

“Having the right variety of selections is very important for enticing consumers and driving sales, regardless of the preparation method shoppers use to make their coffee,” he states, “and that can include offering organic, non-organic, whole made and ground coffee.”

Retailers throughout the globe, meanwhile, also can boost interest in store brands through in-store product samplings, by merchandis-

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COFFEE AND TEA

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Category Update

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ing selections from a wide array of countries, and by listing specific roast levels on products.

“There should be strong visuals on packages to help consumers understand whether it is light-, medium-, medium dark-, or dark-roasted coffee,” he states. “Many brands also do an ineffectual job in helping consumers navigate between ground and whole bean coffee.

Having packaging with various colour combinations can make it easier for shoppers to differentiate the products.”

A CHANGING CUP OF TEA Retailers that meet the growing demand for diverse options also will add zest to the tea sector, particularly as more consumers, and especially younger shoppers, are seeking healthier alternatives to carbonated soft drinks, Mintel states.

“The march of single-serve teas is continuing outside the U.S,” notes Keith Wright, vice president of sales for Intelligent Blends LP, a San Diego, California, U.S.-based tea and coffee supplier. “Many companies below the southern U.S. border and in Asia have expressed interest and laid plans for expansion in these markets.”

Countries with the largest tea volume sales in 2016 were India with an estimated 618.9 million tons, China at 594.2 million tons, Turkey with 169.1 million tons, Russia at 135.2 million tons and Japan with 85.4 million tons, Mintel notes in its January “Tea, Malt and Other Hot Drinks Global Annual Review 2017” report.

“The tea category in developing markets like India and China continue to register sustained volume growth,” Mintel states. “Consumption of hot tea, however, is on a long-term downward trajectory in some traditional markets, most notably the U.K. Younger consumers are increaingly choosing other tea varieties over standard black tea, though not at the same frequency, while other tea segments, most notably green, fruit and herbal, continue to register good growth across a range of countries.”

Indeed, a large percentage of the tea launches in 2016 involve a range of flavours, Mintel reports. Peach and lemon were the most prevalent new product varieties in Europe, Latin America and the Middle East/Africa region, with lime, berry, apple, jasmine and mint among the other prominent selections.

“Consumers are tired of the same old choices and want something new and different,” Wright states, adding that retailers can differentiate their private label selections from the national brands by working with suppliers to develop novel alternatives.

Further demonstrating consumers’ shifting tastes and preferences is the strong expansion of green tea in markets where most consumption is in black tea, such as India, Mintel adds.

“Teas have the potential for tremendous growth because of the availability of wider varieties of flavours,” Wright states. n

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BEAUTY CARE

l

Category Update

By Dana Cvetan

Superior products for ordinary consumers Lure of luxury beauty care is driving the world’s markets Internationally, premium beauty care products outperformed the mass segment for the second year in a row, according to market research provider Euromonitor International.

Industry standards are improving, Euromonitor notes, making superior products more available to ordinary consumers.

Growth was close to 6 per cent for the€€18.4 billion premium beauty and personal care market in 2016, Euromonitor reported in “Beauty and Personal Care Key Insights for 2017,” authored by analyst Nicholas Micallef and released 6 April.

The color cosmetics segment achieved growth of 7.2 per cent for 2016. Skin care products notched 5 per cent growth for the year, according to the report.

Euromonitor forecasts that China and the United States will account for just over half the category’s international growth through 2021.

Other growth markets, according to Euromonitor, are Brazil, Russia, India and Indonesia.

LIFESTYLE MATTERS Understanding consumers and how they view the role of beauty care products in their lives is key to converting them to a new brand, Karen Grant, senior vice president and global beauty industry analyst for global information company The NPD Group, recently reported.

Consumers are pursuing experiences that make them feel

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good while they aspire to healthier lifestyles, Grant added, noting that beauty care products make consumers look and feel their best.

Shifting consumer lifestyles and priorities are influencing the beauty care products category, Micallef writes for Euromonitor.

They include, he says, “the quest for healthy living, environmentally responsible consumption, ‘experiencing’ over ‘owning,’ and (the) demand for targeted products.”

In its “Trends 2025 Beauty & Personal Care” report, market intelligence agency Mintel notes an increased and continuing consumer attraction to natural beauty care products for health and environmental reasons.

In the United Kingdom, Mintel found half the men surveyed believe facial skincare products with natural ingredients are better for their skin. Additionally, 42 per cent of United Kingdom consumers report buying natural and organic personal care products because they believe they are better for the environment, Mintel reports.

Mintel also found that nearly half (48 per cent) of Italian and Spanish consumers buy natural and organic personal care products because they believe the products are better for their health.

INDUSTRY ADVOCATE The Washington, D.C.-based Personal Care Products Council, advocating for the industry globally, works to improve its 600 member companies’ access to international markets.

The Council works to harmonize global regulatory standards and eliminate trade barriers for cosmetics and personal care products sold worldwide. Regulations cover the importation, manufacture, sale, marketing, advertising and registration of these products.

According to its “2016: Year in Review,” the Council led two industry delegations to China last year to meet with Chinese government officials. In those meetings, the Council encouraged Chinese officials to eliminate what it considers burdensome cosmetics regulations and streamline regulations to more closely align with the regulatory approaches of modern economies.

The Council reports that “for the first time, cosmetics regulatory issues were included in the government (to) government dialogue.”

China is one of the world’s largest and fastest-growing markets for cosmetic products, the Council reports. n

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Private Label Manufacturers Association . 5

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Trend Watch

Challenges, opportunities for private brands Euromonitor recently released its Top Global Consumer Trends for 2017, which analyze the trends shaping the consumer landscape this year. Clearly, the trends provide challenges and opportunities for private brands.

“Consumers are now more demanding of products, services and brands than ever before and are using digital tools to articulate and fulfil their needs,” said the report’s author, Daphne Kasriel-Alexander, consumer trends consultant at Euromonitor International, in summarizing the report. “They want authenticity in what they buy and expect elements of personalisation in mass-produced as well as upscale items.”

Some of the top trends include: In 2017, almost a quarter of the world’s population is over 50, a record number. These consumers are transforming what it means to be older in terms of lifestyle and are more demanding in their consumption needs, creating what is increasingly referred to as the “longevity economy.”

u AGEING: A changing narrative

Today’s family demands are launching youngsters into consumption at an earlier stage. Typical factors include parents struggling with work/life balance and a consequent greater consumer reach for paid-for convenience, extended online time for all and youngsters staying in the home, often into their 20s and beyond. Increasingly, the input of children in purchasing decisions is welcomed by their parents.

u Consumers in training

Consumers are impatient.

They are impulsive and in pursuit of immediate gratification. Companies are responding with a slew of speed-up business models, from one-hour delivery to offers via beacon technology, used by retailers to broadcast messages to nearby consumers via their smartphones. u Faster shopping

We have come to accept the idea that an industrially produced product can be customised or personalised, at least in part. This trend is changing consumer expectations, as customers demand that products fulfil or even predict their needs. u Personalise it

Authenticity is a standout consumer value. Authenticity was identified as the key word helping to sell items on eBay in 2016, by researchers Andrew Kehoe and Matt Gee from Birmingham City University’s School of English, when looking at the most lucrative words used by sellers. u GET REAL: The allure of authenticity

The desire to be fit and healthier seems to be almost universal. Healthy living is becoming a status symbol, as more consumers opt to flaunt their passion for wellness through food with health-giving properties and other factors. n u Wellness as a status symbol

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Resilient food businesses only grow from sustainable sources In today’s world, businesses and consumers alike are becoming increasingly aware of the source of the food they buy. Origin Green, Ireland’s national sustainability programme, enables Irish food and drink suppliers to incorporate sustainability into all areas of the supply chain, with independent verification of their commitments.

• Over 90% of Irish food and drink exporters have been verified under Origin Green, by international auditors SGS. • 90% of our beef exports have been audited and carbon footprinted to an independently verified standard.

• 80% of our dairy production has been audited and carbon footprinted to an independently verified standard.

Ireland is working towards its vision of 100% verified sustainable exports.

The Origin Green sustainability programme is tried and tested at every point along the supply chain. It’s that very resilience that can help make your food business grow more resilient too.

See how we are delivering for business at Origingreen.ie/resilience

an initiative by