Following years of high food and drink inflation, German grocery shoppers remain highly price sensitive. 87% of grocery shoppers compare prices between own-label and branded products, and 60% of grocery shoppers would buy PL groceries over branded ones if they were cheaper. Despite growing financial confidence in 2024 and inflation levels levelling off, PL maintained its strong consumer reach: 91% of Germans buy PL food and non-alcoholic drinks, with value PL leading ahead of standard or premium purchases.
Still, shoppers are less likely to cut back on premium private label and branded products in 2024 compared to 2022, showing first indications of grocery shoppers seeking upgrades in their purchases. Following a drop in PL and premium PL innovation during the onset of the cost-of-living crisis, innovation stagnated in 2024. To maintain such broad appeal among German shoppers, PL will have to push beyond affordability and utilise innovation to stand out via health-centric claims or unique flavour appeal.
With premium private labels showing strong growth among financially healthy Germans, growing financial confidence will likely open further doors. Local production labels will speak to demand for quality, while convenience features equally justify premium prices.
This report looks at the following areas:
- Overview of current market performance and discussion of the rising popularity of private label products amidst the cost of living crisis, as well as the outlook for the next five years
- The appeal of premium private label products to wealthier demographics and the need to revitalise their launches
- Factors prompting the purchase of own-label groceries over branded ones, with affordability, health and unique flavours mattering most
- Attitudes and behaviours relating to private label products, including quality perceptions and demand for regional own-label products, exclusive own-label stores and quality perceptions
- Key new product development trends in the category
Private labels enjoy loyal followings due to current price pressure. Look to strengthen their position by fuelling healthier choices and offering premium appeal at different price points.
Charlotte Sander, Research Analyst
Market Definitions
Products covered in this Report
- Manufacturer brands – products that are available in grocery stores and can be brand leaders or secondary brands. Examples include Heinz, Kellogg’s and Mars.
- Own-label – products that carry the retailer’s name, with subbrands segmented according to considerations such as health and price.
- Premium own-label – products positioned towards the higher end of the price spectrum and looking to compete with brands in terms of quality. Examples include REWE Feine Welt and EDEKA Genussmomente.
- Standard own-label – products positioned as retailers’ core range with a mid-tier price (typically undercutting brands by around 20%), generally covering the majority of product markets. Examples include REWE Beste Wahl and Kaufand’s K-Favourites.
- Value/economy own-label – products positioned at the lower end of the price spectrum, serving as the opening price point in each category. Examples include REWE’s Ja! and Lidl’s Milbona.
This Report focuses on private label food and non-alcoholic drinks.
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EXECUTIVE SUMMARY
- What you need to know
- Opportunities
- Outlook
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OPPORTUNITIES
- Future-proof private label’s success
- PL coming out as the clear winner during the cost of living crisis
- Focus on the food and drink categories where shoppers will need affordability the most
- Graph 1: % of private label launches in selected food and drink categories, 2022-24
- PL can grow in its appeal to younger shoppers and on online shops
- Fuel healthier choices
- Private label – the key to affordable healthy eating
- Close the gap to brands on healthy claims to further improve PL’s support for healthy diets
- Three in 10 grocery shoppers would choose a PL product over a branded one if it was healthier
- Premiumise your offering
- Explore a variety of premium aspects…
- …to cater to wealthier demographics
- Accentuate premium products with localism claims
- Enhance the convenience of premium PL groceries
- Partner up with children-centric charities to cater to parents
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CONSUMER
- Private label food and non-alcoholic drink purchases
- Private-label food and drink brands maintain their strong position
- Value PL food/drink leads the ranking ahead of standard PL products
- Graph 2: types of food and non-alcoholic drink products purchased in past three months, 2018-24
- Germans cut back on branded and increase value PL product purchases
- Graph 3: behaviour changes towards food and non-alcoholic drink product purchases in the last three months compared to before, 2024
- Value private label fulfils shoppers’ expectations
- First signs of trend reversal with shoppers less likely to cut back on branded and premium PL purchases
- Graph 4: % of product shoppers buying less of a type of food and non-alcoholic drink products in the last three months, 2022 vs 2024
- Graph 5: % of shoppers buying more of a type of food and non-alcoholic drink products in the last three months, 2022 vs 2024
- Premium PL can enhance staples into gourmet ranges
- In the pursuit of value at different price points, premium PL gains popularity
- Premium PL groceries gain ground among financially healthy Germans
- Graph 6: selected types of food and non-alcoholic drink products purchased in the last three months, by financial health, 2024
- Shopping locations
- Discounters and supermarkets share the leading position for PL purchases
- Graph 7: shopping location for own-label food and non-alcoholic drinks in the past three months, 2022-24
- Discounters to remain important
- Room to engage more younger buyers with discounter PL ranges
- Convenience stores hold premium appeal
- Drugstore presence can appeal to a female audience
- Factors prompting the purchase of own-label food/drink over branded products
- Affordability is key to sway grocery shoppers towards private labels
- Graph 8: factors prompting the purchase of own-label food and non-alcoholic drinks over branded products, 2024
- Beyond price, PL can broaden its appeal with unique flavours and a focus on health or sustainability benefits
- Link loyalty schemes with sustainable products
- Tap into social gatherings to spread uniqueness
- PL products can win over consumers by leading them towards sustainable action
- Highlight affordability of healthy diets…
- …to help PL products stand out
- Attitudes and behaviours
- PL products have a stronghold of German shoppers, outdoing brands at points
- Graph 9: behaviours towards own-label and branded food and non-alcoholic drink products, 2024
- Made and produced in Germany and clear labelling
- Persistent increase in German online grocery shoppers with minimal drop-offs
- Graph 10: use of online grocery shopping, NET, 2021-24
- Consumers pay attention to price, but quality differences do matter
- Graph 11: grocery shoppers’ behaviours towards branded and own-label food and non-alcoholic drink products, 2024
- Parents enjoy the quality of premium PL ranges and want to do good
- Product concept inspiration for parents
- PL groceries largely convince Germans with regards to taste and quality
- Graph 12: attitudes towards branded and own-label food and non-alcoholic drink products, 2024
- Premium PL is valued, but not worth spending more on than on branded items
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INNOVATION
- Private label launches in 2024 close to 2023 levels
- Brands continue to dominate in new product launches
- Graph 13: private label vs branded food and non-alcoholic drink launches, by launch type, 2022-24
- PL launching functional and fortified food and drink products
- Fish, meat and egg and meals and meal centres remain PL’s most dominant food categories
- Graph 14: % share of private label launches in top ten food categories, 2022-24
- Rising juice costs fuelling private label innovation
- Graph 15: % of private label launches in top five drink categories, 2022-24
- PL launches aim to keep juice affordable
- ALDI takes over ultimate company share in PL food/drink launches
- Graph 16: private label launches in food and non-alcoholic drinks, by ultimate company, 2022-24
- EDEKA’s packaging innovation reinforces quality and distinctiveness
- PL launches stand out with stronger positioning towards ethical and environmental claims and positioning claims
- Graph 17: private label and branded food and non-alcoholic drink launches, by claim category, 2024
- Expect a rise of plus claims in PL launches
- PL coming close to brands’ organic launch efforts
- Graph 18: private label vs branded food and non-alcoholic drink launches, by top five natural claims, 2024
- Room for PL growth in organic spreads and bakery
- Graph 19: % of private label launches in selected food and drink categories, by overall launches and organic launches, 2024
- Organic breakfast launches from PL brands
- Room for premium claims in PL launches to gain back some ground
- Graph 20: private label launches by selected positioning claims, 2020-24
- Premium PL launches embrace ethical, sustainable and convenient aspects
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MARKET DRIVERS
- A challenging economy makes Germans resort – and stick – to private labels
- Graph 21: consumer price index for food and non-alcoholic beverages, 2020-24
- PL is especially popular among Germans…
- Graph 22: financial confidence index, 2022-24
- …but even PL products need to increase their costs
- PL gradually shifting towards more functional food and drink launches
- Consumers place a high priority on healthy eating habits
- A focus on sustainability is more central than ever before
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APPENDIX
- Report scope and definitions
- Market definition
- Abbreviations
- Methodology – consumer research
- Consumer research methodology
- TURF Analysis Methodology
- TURF Analysis
- A note on language
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