Australia’s Private Label Food Growth Clues: Should Global Brands Worry?

In a recent Nielsen's Homescan survey conducted in Australia found that “Private label products account for 18.3 per cent of Woolworths' packaged grocery sales, up from 16.8 per cent in April 2011”. The report found that sales of Australia's Woolworths private-label brands have grown two to three times faster than national, international brands; private-label products in the past two years.

Trader Joe’s in the United States has been embraced by consumers and in fact Trader Joe’s which is 95%+ private label also has the highest sales per square foot in the United Sates of all retail food companies.  What does that say for the future of national and international brands today?

In Australia consumers have embraced Aldi which like Trader Joe’s is near 95% private label. The growth of store brands by consumers threatens global branded food products viability.

Here is a clue to the size of the threat: “The Australian Competition and Consumer Commission has received complaints that the major supermarkets are deleting branded products in favour of private label products unless they agree to reduce prices, pay extra fees or agree to supply house brands -- behaviour vehemently denied by both major supermarkets.”

The consumer is dynamic not static brands must invigorate, invent and inspire shopping preferences. When they fail to do so others will leverage the 5 P’s of food marketing to take advantage. Today the ready-2-eat and heat-N-eat fresh food grocerant niche continues to garner strength and grow.

Invite Foodservice Solutions® to complete a Migration Marketing assessment, grocerant program assessment. For brand, product placement, menu positioning assistance simply call Foodservice Solutions® today.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant