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The Private Label Food Consumer - UK - September 2018

“Despite facing undeniable – and significant – headwinds, it is by no means all doom and gloom for brands. Nurturing perceptions of offering the ultimate in enjoyment, a unique taste, superior quality, and exciting flavours will be key to promoting brand loyalty. That brands are still seen to have the edge in innovativeness is a big advantage, particularly in terms of engaging with the younger generation.”

– Emma Clifford, Associate Director – Food and Drink

This report examines the following issues:

  • A need to boost availability and visibility of products supporting British food producers
  • Crowd-sourcing inspiration for NPD can enhance own-labels’ image as exciting and innovative
  • Experiential events can boost the appeal of own-label ranges
  • A focus on own-label in convenience stores is timely

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Table of contents

  1. Overview

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

          • The market
            • Real wages return to growth, easing pressure on consumers
              • Figure 1: Annual percentage change in CPI and AWE (regular pay), monthly basis, January 2012-June 2018
            • A savvy shopping mentality is well-entrenched
              • The rise of the discounters
                • Range rationalisations and the move towards ELDP are bad news for brands
                  • Companies and brands
                    • Own-label gains share almost across the board
                      • Brands retain the overall edge in NPD, but own-label draws equal in food launches
                        • Premium own-label launches reach a five-year high in 2017
                          • Led by Tesco, a greater focus on tertiary and exclusive brands
                            • Own-label ingredients take centre stage in supermarkets’ meal inspiration campaigns
                              • Supermarkets draw attention to traceability and provenance
                                • M&S The Collection enjoys a strong all-round positive image, Tesco Finest is most trusted
                                  • Figure 2: Attitudes towards and usage of selected premium own-brands, June 2018
                                • The consumer
                                  • Own-label has the edge over brands
                                    • Figure 3: Purchasing of own-label and branded food and non-alcoholic drink products in a typical month, June 2018
                                  • Brands are losing out, as consumers shift towards the value end of the market
                                    • Figure 4: Changes to purchasing of branded and own-label food and non-alcoholic drinks, June 2018
                                  • Taste and quality hold a lot of sway
                                    • Figure 5: Enticements to choose a branded product over an own-label product, June 2018
                                  • Support for British food producers chimes with older consumers
                                    • Figure 6: Concepts consumers would be interested in seeing more of from own-label ranges, June 2018
                                  • Demand for more own-label products in the convenience channel
                                    • Figure 7: Attitudes towards branded and own-label food and non-alcoholic drink, June 2018
                                  • An equal split between consumers who do and do not buy retailer exclusive brands
                                      • Figure 8: Attitudes towards retailer exclusive brands, June 2018
                                    • What we think
                                    • Issues and Insights

                                      • A need to boost availability and visibility of products supporting British food producers
                                        • The facts
                                          • The implications
                                            • Crowd-sourcing inspiration for NPD can enhance own-labels’ image as exciting and innovative
                                              • The facts
                                                • The implications
                                                  • Experiential events can boost the appeal of own-label ranges
                                                    • The facts
                                                      • The implications
                                                        • A focus on own-label in convenience stores is timely
                                                          • The facts
                                                            • The implications
                                                            • The Market – What You Need to Know

                                                              • Real wages return to growth, easing pressure on consumers
                                                                • A savvy shopping mentality is well-entrenched, own-label playing an important role in this
                                                                  • The rise of the discounters
                                                                    • Range rationalisations and the move towards ELDP are bad news for brands
                                                                    • Market Drivers

                                                                      • 2017 characterised by the return of income squeeze
                                                                        • Household spend is subdued
                                                                          • Real wages return to growth, easing pressure on consumers
                                                                            • Figure 9: Annual percentage change in CPI and AWE (regular pay), monthly basis, January 2012-June 2018
                                                                          • Consumer sentiment improves in first half of 2018, but falls in August
                                                                            • Figure 10: “How would you generally describe your financial situation at the moment?”, August 2018
                                                                          • Two in five were spending more cautiously on food in early 2018
                                                                            • A savvy shopping mentality is well-entrenched
                                                                              • Own-label plays an important role in savvy shopping
                                                                                • The rise of the discounters
                                                                                  • Range rationalisations are bad news for brands
                                                                                    • The grocers move towards EDLP
                                                                                    • Companies and Brands – What You Need to Know

                                                                                      • Own-label gains share almost across the board
                                                                                        • Brands retain the edge in NPD overall, but own-label draws equal in food launches
                                                                                          • Premium own-label launches reach a five-year high in 2017
                                                                                            • Led by Tesco, a greater focus on tertiary and exclusive brands
                                                                                              • Own-label ingredients take centre stage in supermarkets’ meal inspiration campaigns
                                                                                                • Supermarkets draw attention to traceability and provenance
                                                                                                  • M&S The Collection enjoys a strong all-round positive image, Tesco Finest is most trusted
                                                                                                  • Own-label and Selected Brand Performances

                                                                                                    • Own-label gains share almost across the board
                                                                                                      • Individual brands continue to perform strongly
                                                                                                        • Cadbury Dairy Milk grows volume sales in declining chocolate market
                                                                                                          • A strong performance from Häagen Dazs and Kelly’s in ice cream in 2016/17
                                                                                                            • Own-label is the bigger winner in crisps and savoury snacks, but some brands do well
                                                                                                              • Charlie Bigham’s goes from strength to strength in ready meals
                                                                                                                • Yorkshire Tea bucks the downward volume trend in tea
                                                                                                                  • Impressive performances from Coca-Cola Zero Sugar and Pepsi Max
                                                                                                                    • Naked Juice bucks the downward trend in fruit juice
                                                                                                                    • Launch Activity and Innovation

                                                                                                                      • Brands retain the edge in food and drink
                                                                                                                        • Figure 11: New product launches in the UK food and non-alcoholic beverages markets, branded vs private label, 2013-18
                                                                                                                      • NPD in main meals is dominated by own-label
                                                                                                                        • Figure 12: Share of private label in new product launches of food and non-alcoholic drink products in the UK, by product category, 2017
                                                                                                                      • Premium own-label launches reach a five-year high in 2017
                                                                                                                        • …helping quality perception and with discounters upping the ante
                                                                                                                          • Figure 13: Share of private label in new product launches of food and non-alcoholic drink products carrying a premium claim, 2013-17
                                                                                                                        • Tesco focuses on tertiary brands in value own-label overhaul
                                                                                                                          • 2017 and 2018 see tertiary brands in ready meals, bread, deli foods, and dairy
                                                                                                                              • Figure 14: Examples of tertiary brands from Tesco, 2018
                                                                                                                            • Tesco introduces Wicked Kitchen range of plant-based meals
                                                                                                                              • Figure 15: Examples from the Wicked Kitchen range exclusively for Tesco, 2018
                                                                                                                            • Sainsbury’s introduces The Supper Club luxury range of ready meals
                                                                                                                              • Figure 16: Examples from Sainsbury’s Supper Club range of chilled ready meals, 2018
                                                                                                                            • Iceland blurs the lines between own-label and tertiary brands
                                                                                                                              • Figure 17: Examples from Iceland’s Mumbai Street Co range of frozen ready meals, 2018
                                                                                                                              • Figure 18: Examples from Iceland’s Hungry Heroes range of frozen ready meals, 2018
                                                                                                                            • Morrisons has relaunched its M Savers lineup
                                                                                                                              • Healthy own-label ranges get updates
                                                                                                                                • Morrisons renames NuMe as EatSmart
                                                                                                                                  • Figure 19: Examples from the Morrisons Eat Smart range, 2017
                                                                                                                                • Asda overhauls chilled ready meals with healthier and premium variants
                                                                                                                                  • Nisa and Spar focus on quality in own-label product development
                                                                                                                                    • A major own-label overhaul for One Stop
                                                                                                                                    • Advertising and Marketing Activity

                                                                                                                                      • Own-label ingredients take centre stage in supermarkets’ meal inspiration campaigns
                                                                                                                                        • Tesco Food Love Stories campaign inspires meals through personal stories
                                                                                                                                          • Waitrose’s Beautifully Simple campaign puts the focus back on food and cooking
                                                                                                                                            • Sainsbury’s aims to capture the joy of cooking in “Food Dancing” campaign
                                                                                                                                              • Co-op and Spar focus on bringing people together with food
                                                                                                                                                • Co-op unveils its ‘year of eating together’ strategy
                                                                                                                                                  • Spar invites people to host barbeque parties in its new ‘Sparbecue’ campaign
                                                                                                                                                    • Iceland and M&S focus on recommendations
                                                                                                                                                      • Iceland continues its Power of Frozen campaign
                                                                                                                                                        • M&S looks to personal recommendations from staff
                                                                                                                                                          • Supermarkets draw attention to traceability and provenance
                                                                                                                                                            • Morrisons’ new TV push puts its suppliers in the limelight
                                                                                                                                                              • M&S emphasises its unparalleled traceability standards for beef
                                                                                                                                                                • Waitrose spotlights tuna provenance
                                                                                                                                                                  • Lidl Surprises goes behind the scenes to their suppliers
                                                                                                                                                                    • Aldi showcases its ethical credentials in its debut “Everyday Amazing” ad
                                                                                                                                                                      • Co-op raises awareness of its 100% British Meat Pledge
                                                                                                                                                                        • The discounters make cost savings tangible
                                                                                                                                                                          • Lidl ‘Big on quality, Lidl on price’ campaign makes price comparisons
                                                                                                                                                                            • Aldi’s ‘Swap and save’ campaign puts real families to the test
                                                                                                                                                                            • Brand Research

                                                                                                                                                                                • Brand map
                                                                                                                                                                                  • Figure 20: Attitudes towards and usage of selected brands, June 2018
                                                                                                                                                                                • Key brand metrics
                                                                                                                                                                                  • Figure 21: Key metrics for selected brands, June 2018
                                                                                                                                                                                • Brand attitudes: Tesco Finest has an all-round strong brand image
                                                                                                                                                                                  • Figure 22: Attitudes, by brand, June 2018
                                                                                                                                                                                • Brand personality: Premium own-labels from Asda, Tesco and Aldi lead in accessibility
                                                                                                                                                                                  • Figure 23: Brand personality – Macro image, June 2018
                                                                                                                                                                                • M&S wins on specialness, deliciousness, and indulgence
                                                                                                                                                                                  • Figure 24: Brand personality – Micro image, June 2018
                                                                                                                                                                                • Brand analysis
                                                                                                                                                                                  • Marks & Spencer The Collection enjoys a strong all-round positive image
                                                                                                                                                                                    • Figure 25: User profile of Marks & Spencer The Collection, June 2018
                                                                                                                                                                                  • Aldi Specially Selected stands out for its good value for money image
                                                                                                                                                                                    • Figure 26: User profile of Aldi Specially Selected, June 2018
                                                                                                                                                                                  • Tesco Finest is the most trusted premium own-label
                                                                                                                                                                                    • Figure 27: User profile of Tesco Finest, June 2018
                                                                                                                                                                                  • Morrisons The Best falls below average on quality and innovativeness
                                                                                                                                                                                    • Figure 28: User profile of Morrisons The Best, June 2018
                                                                                                                                                                                  • Sainsbury’s Taste The Difference has strong quality connotations
                                                                                                                                                                                    • Figure 29: User profile of Sainsbury’s Taste The Difference, June 2018
                                                                                                                                                                                  • Waitrose 1 needs to build awareness around its offering
                                                                                                                                                                                    • Figure 30: User profile of Waitrose 1, June 2018
                                                                                                                                                                                  • Asda Extra Special scores well on value for money
                                                                                                                                                                                    • Figure 31: User profile of Asda Extra Special, June 2018
                                                                                                                                                                                  • The Co-op Irresistible needs to boost its associations with quality
                                                                                                                                                                                    • Figure 32: User profile of The Co-op Irresistible, June 2018
                                                                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                                                                  • Own-label has the edge over brands
                                                                                                                                                                                    • Shoppers mix it up
                                                                                                                                                                                      • Brands are losing out, with a shift towards the value end of the market
                                                                                                                                                                                        • Taste and quality hold a lot of sway
                                                                                                                                                                                          • Support for British food producers chimes with older consumers
                                                                                                                                                                                            • Influences for own-label NPD can come from varied sources
                                                                                                                                                                                              • Demand for more own-label products in the convenience channel
                                                                                                                                                                                                • Brands have a more innovative image
                                                                                                                                                                                                  • Exclusive own-label preview events appeal to two fifths
                                                                                                                                                                                                    • An equal split between consumers who do and do not buy retailer exclusive brands
                                                                                                                                                                                                      • Ambiguity over retailer exclusive brands risks alienating shoppers
                                                                                                                                                                                                        • Widespread openness to gifting non-branded products
                                                                                                                                                                                                        • Purchasing of Branded and Own-label Food and Non-alcoholic Drinks

                                                                                                                                                                                                          • Own-label has the edge over brands…
                                                                                                                                                                                                            • …helped by associations with savvy shopping
                                                                                                                                                                                                              • …but purchasing of branded products doesn’t lag far behind
                                                                                                                                                                                                                • Figure 33: Purchasing of own-label and branded food and non-alcoholic drink products in a typical month, June 2018
                                                                                                                                                                                                              • Purchasing solely own-label is most common among young consumers
                                                                                                                                                                                                                • Own-label’s tiered offering caters to consumers’ spending priorities
                                                                                                                                                                                                                  • Figure 34: Purchasing of food and non-alcoholic drink products in a typical month, by financial situation, June 2018
                                                                                                                                                                                                                • Shoppers mix it up
                                                                                                                                                                                                                    • Figure 35: Repertoire of purchasing of food and non-alcoholic drink products in a typical month, June 2018
                                                                                                                                                                                                                • Changes to Purchasing of Branded and Own-label Food and Non-alcoholic Drinks

                                                                                                                                                                                                                  • Most consumers have not changed their habits
                                                                                                                                                                                                                    • Figure 36: Changes to purchasing of branded and own-label food and non-alcoholic drinks, June 2018
                                                                                                                                                                                                                  • Brands are losing out
                                                                                                                                                                                                                    • Standard and value own-label gain ground
                                                                                                                                                                                                                    • Enticements to Choose a Branded Product over an Own-label Product

                                                                                                                                                                                                                      • Taste holds most sway
                                                                                                                                                                                                                          • Figure 37: Enticements to choose a branded product over an own-label product, June 2018
                                                                                                                                                                                                                        • Some of the industry’s biggest brands focus on their iconic taste
                                                                                                                                                                                                                          • Quality perceptions play an important role in decision making
                                                                                                                                                                                                                            • Having more exciting flavours holds most allure for under-25s
                                                                                                                                                                                                                              • Brands have a more innovative image
                                                                                                                                                                                                                              • Concepts Consumers Would Like to See More of from Own-label Ranges

                                                                                                                                                                                                                                • Support for British food producers chimes with older consumers
                                                                                                                                                                                                                                  • A need to boost availability and visibility of products with these ethical credentials
                                                                                                                                                                                                                                      • Figure 38: Concepts consumers would be interested in seeing more of from own-label ranges, June 2018
                                                                                                                                                                                                                                    • Partnerships with local producers appeal widely
                                                                                                                                                                                                                                      • Many supermarkets supporting local suppliers
                                                                                                                                                                                                                                        • Influences for own-label NPD can come from varied sources
                                                                                                                                                                                                                                          • Inspiration can be taken from brands in getting consumers involved in future NPD
                                                                                                                                                                                                                                          • Attitudes towards Branded and Own-label Products

                                                                                                                                                                                                                                            • Demand for more own-label products in the convenience channel
                                                                                                                                                                                                                                              • A focus on own-label in convenience stores is timely
                                                                                                                                                                                                                                                • Figure 39: Attitudes towards branded and own-label food and non-alcoholic drink, June 2018
                                                                                                                                                                                                                                              • Own-label is a key competitive tool
                                                                                                                                                                                                                                                • Exclusive own-label preview events appeal to two fifths
                                                                                                                                                                                                                                                • Purchasing of and Attitudes towards Retailer Exclusive Brands

                                                                                                                                                                                                                                                  • An equal split between consumers who do and do not buy retailer exclusive brands
                                                                                                                                                                                                                                                      • Figure 40: Purchasing of retailer-exclusive brands, June 2018
                                                                                                                                                                                                                                                    • Under-25s are the core buyers of retailer exclusive brands
                                                                                                                                                                                                                                                      • Figure 41: Purchasing of retailer-exclusive brands, by age group, June 2018
                                                                                                                                                                                                                                                    • Ambiguity over retailer exclusive brands risks alienating shoppers
                                                                                                                                                                                                                                                        • Figure 42: Attitudes towards retailer exclusive brands, June 2018
                                                                                                                                                                                                                                                      • Widespread openness to gifting non-branded products
                                                                                                                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                                          • Abbreviations
                                                                                                                                                                                                                                                            • Consumer research methodology
                                                                                                                                                                                                                                                            • Appendix – Launch Activity and Innovation

                                                                                                                                                                                                                                                                • Figure 43: Share of new launches in the UK food and non-alcoholic drinks market, by launch type, 2013-18
                                                                                                                                                                                                                                                                • Figure 44: Percentage point change in the share of private label in new food and non-alcoholic drinks launches, by product category, 2016-17
                                                                                                                                                                                                                                                                • Figure 45: Company share of private label new product launches of food and non-alcoholic drink products in the UK, 2013-18*

                                                                                                                                                                                                                                                            The Private Label Food Consumer - UK - September 2018

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