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Private Label Food and Non-alcoholic Drink - UK - November 2015

“That three in 10 shoppers would like to have a say in new products being added to own-label ranges, indicates this an a valuable route for own-brands to canvas the opinions of shoppers whilst also helping to build engagement and loyalty.”

Emma Clifford, Senior Food and Drink Analyst

This report covers the following areas:

  • Inviting shoppers to influence NPD can help to elicit trust and build quality perceptions
  • Scope to harness interest in how own-label products are made
  • Supporting small producers can enhance the appeal of own-label products

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Figure 1: Retail value sales and forecast of private label food and drink, UK, 2010-20
          • Market factors
            • Price wars fuel food price deflation
              • Figure 2: Retail Price Index of all food, January 2010-September 2015
            • Private label becomes a more important differentiator
              • Consumers find themselves in a better financial situation
                • Companies, brands and innovation
                  • Branded products increase share of NPD in 2014
                    • Tesco and Asda reviews their entire product ranges
                      • The consumer
                        • Most people shop across brands and own-label
                          • Figure 3: Purchasing of own-label and branded food and non-alcoholic drinks, September 2015
                        • Premium own-label needs to innovate and prove its value
                          • Figure 4: Attitudes towards premium own-label food and non-alcoholic drinks, September 2015
                        • Majority compare own-label and brand prices
                          • Figure 5: Behaviour relating to purchasing of own-label and branded food and non-alcoholic drink, September 2015
                        • A poor own-label offer is a put-off
                          • A third would not spend extra on their grocery shop
                            • Figure 6: What food and non-alcoholic drink shoppers would spend extra money on, September 2015
                          • Everyday low pricing appeals
                            • Figure 7: Attitudes towards own-label and branded products, September 2015
                          • Independent awards help to build perceptions of quality
                            • Figure 8: Attitudes towards retailer exclusive brands, September 2015
                          • What we think
                          • Issues and Insights

                            • Inviting shoppers to influence NPD can help to elicit trust and build quality perceptions
                              • The facts
                                • The implications
                                  • Scope to harness interest in how own-label products are made
                                    • The facts
                                      • The implications
                                        • Supporting small producers can enhance the appeal of own-label products
                                          • The facts
                                            • The implications
                                            • The Market – What You Need To Know

                                              • The private label food market is worth £47.9 billion
                                                • Falling prices saw private label sales slip into decline in 2015
                                                  • Private label outperforms brands thanks to booming sales at discounters
                                                    • Rising consumer spending should promote trading up within own-label
                                                      • Non-alcoholic drinks tend to be dominated by private label
                                                        • Own-label has a near monopoly in fresh fruit and veg, meat and fish
                                                          • Confectionery is the domain of brands
                                                          • Market Size and Forecast

                                                              • Figure 9: Retail value sales of private label food and non-alcoholic drink, at current and constant prices, 2010-20
                                                            • The future
                                                              • Figure 10: Retail value sales and forecast of private label food and drink, UK, 2010-20
                                                          • Market Segmentation

                                                            • Milk continues to be dominated by private label
                                                              • Figure 11: Share of private label in retail* sales of non-alcoholic drinks, by category, 2014 and 2015
                                                            • Own-label has a minor presence in CSDs and sports/energy drinks
                                                              • Own-label continues to lose out in tea and coffee
                                                                • Own-label has a near monopoly in fresh fruit and veg, meat and fish
                                                                  • Brands play a small role in ready meals
                                                                    • Figure 12: Share of private label in retail* sales of food, by category, 2014 and 2015
                                                                  • Confectionery is the domain of brands
                                                                  • Market Drivers

                                                                    • Discounters continue to steal share, providing a boost to private label
                                                                      • Grocery retailers compete fiercely
                                                                        • Consumers find themselves in a better financial situation
                                                                          • Figure 13: Consumers’ financial wellbeing index, February 2009-April 2015
                                                                        • Price wars fuel food price deflation
                                                                          • Figure 14: Retail Price Index of all food, January 2010-September 2015
                                                                      • Key Players – What You Need to Know

                                                                        • Branded products increase share of NPD in 2014
                                                                          • The branded to private label ratio varies widely between categories
                                                                            • Tesco and Asda review their entire product ranges
                                                                              • M&S launches a ‘Tastes of the British Isles’ range
                                                                                • Lidl launches major price comparison campaign against brands
                                                                                  • Tesco introduces Brand Guarantee
                                                                                    • Frozen food is put in the limelight
                                                                                    • Launch Activity and Innovation

                                                                                      • Branded products increase share of NPD in 2014
                                                                                        • Figure 15: New product launches in the UK food and non-alcoholic beverages markets, branded vs private label, 2011-15
                                                                                      • The branded to private label ratio varies widely between categories
                                                                                          • Figure 16: Share of private label in new product launches of food and non-alcoholic drink products in the UK, by product category, 2015*
                                                                                          • Figure 17: Percentage point change in the share of private label in new food and non-alcoholic drinks launches, by product category, 2013-14
                                                                                        • M&S launches a ‘Tastes of the British Isles’ range
                                                                                          • Ethnic Cuisines is also a strong focus for M&S
                                                                                            • Asda launches Good & Balanced and Good & Counted ranges
                                                                                              • Private label offers up ethical solutions
                                                                                                • ‘Project Reset’: Tesco reviews its entire product range
                                                                                                  • Asda also unveiled a new strategy
                                                                                                    • Aldi seeks to offer organic at an affordable price
                                                                                                    • Brand Communication and Promotion

                                                                                                      • Lidl launches major price comparison campaign against brands
                                                                                                        • Tesco introduces Brand Guarantee
                                                                                                          • Marks and Spencer introduces Sparks ‘members’ club’
                                                                                                            • Sainsbury’s pushes its private label ingredients
                                                                                                              • Iceland launches a Power of Frozen campaign
                                                                                                                • Waitrose allows shoppers to choose their own discounted products
                                                                                                                  • Asda brings back the ‘pocket tap’
                                                                                                                    • Aldi sponsors Team GB ahead of Rio 2016 Olympics
                                                                                                                      • Grocers take very different approaches in their Christmas 2015 advertising
                                                                                                                      • The Consumer – What You Need To Know

                                                                                                                        • Over-55s are top buyers of premium own-label products
                                                                                                                          • High levels of mix and matching across brands and own-label
                                                                                                                            • Premium own-label has to innovate and prove its value
                                                                                                                              • Giving the shoppers a say can drive engagement
                                                                                                                                • A poor own-label offer is a put-off
                                                                                                                                  • A third would not spend extra on their grocery shop
                                                                                                                                    • Everyday low pricing appeals
                                                                                                                                      • Shoppers are keen to support small producers
                                                                                                                                        • Independent awards help to build perceptions of quality
                                                                                                                                        • Purchasing of Own-label and Brands

                                                                                                                                          • Over-55s are top buyers of premium own-label products
                                                                                                                                            • Majority buy both value and premium own-label
                                                                                                                                              • Figure 18: Types of own-label and branded products bought, September 2015
                                                                                                                                          • Attitudes towards Premium Own-label

                                                                                                                                            • One in two happy to receive premium own-label as a gift
                                                                                                                                              • Premium own-label has to innovate…
                                                                                                                                                • …and prove its value
                                                                                                                                                  • Figure 19: Attitudes towards premium own-label food and non-alcoholic drinks, September 2015
                                                                                                                                              • Shopping Behaviour

                                                                                                                                                • Majority compare own-label and brand prices
                                                                                                                                                  • Figure 20: Behaviour relating to purchasing of own-label and branded food and non-alcoholic drink, September 2015
                                                                                                                                                • Half of shoppers compare ingredients
                                                                                                                                                  • A poor own-label offer is a put-off
                                                                                                                                                    • Giving the shoppers a say can drive engagement
                                                                                                                                                    • What Shoppers Would Spend Extra Money On

                                                                                                                                                      • Two thirds of people would spend extra on their grocery shop
                                                                                                                                                        • Figure 21: What food and non-alcoholic drink shoppers would spend extra money on, September 2015
                                                                                                                                                      • One in three would trade up to more expensive foods
                                                                                                                                                        • Brands and premium own-label see limited appeal
                                                                                                                                                          • One in four would spend extra at specialist stores
                                                                                                                                                          • Attitudes towards Own-label and Branded Products

                                                                                                                                                            • Everyday low pricing appeals
                                                                                                                                                              • Own-label is seen as savvy shopping
                                                                                                                                                                • Figure 22: Attitudes towards own-label and branded products, September 2015
                                                                                                                                                              • Transparency can win over own-label shoppers
                                                                                                                                                                • Shoppers are keen to support small producers
                                                                                                                                                                • Qualities Associated with Own-label, Private Label Brands and Brands

                                                                                                                                                                  • Methodology
                                                                                                                                                                    • Correspondence analysis
                                                                                                                                                                      • Dairy Milk excels on quality perception
                                                                                                                                                                        • Figure 23: Correspondence analysis – Private label and branded chocolate products, September 2015
                                                                                                                                                                        • Figure 24: Private label and branded chocolate products, September 2015
                                                                                                                                                                      • Dairy Milk also scores the highest on indulgence and fun
                                                                                                                                                                        • Moser Roth seen to be as special as Cadbury’s Dairy Milk
                                                                                                                                                                          • Many people are unsure about Lidl’s Fin Carre
                                                                                                                                                                          • Attitudes towards Retailer Exclusive Brands

                                                                                                                                                                            • Shoppers want the best of both
                                                                                                                                                                              • Figure 25: Attitudes towards retailer exclusive brands, September 2015
                                                                                                                                                                            • Tertiary brands more acceptable as gifts than premium own-label
                                                                                                                                                                              • Independent awards help to build perceptions of quality
                                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                  • Abbreviations
                                                                                                                                                                                    • Consumer research methodology
                                                                                                                                                                                      • Fan chart forecast
                                                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                                                          • Figure 26: Best- and worst-case forecasts for private label food and non-alcoholic drink, by value, 2014-19

                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                      Private Label Food and Non-alcoholic Drink - UK - November 2015

                                                                                                                                                                                      US $2,478.79 (Excl.Tax)