Private Label Increases Market Share across Europe

By CPGmatters Staff

Retailer brands keep gaining popularity across Europe. The latest Nielsen data shows that market share for private label increased last year in 12 of 19 countries. It now stands at 30% or more in 17 countries.

Private label reached an all-time high in Europe’s largest retail market, Germany, with its market share there climbing to over 45% for the first time. Market share also increased to its highest levels ever in six other countries: The Netherlands, Belgium, Sweden, Norway, Hungary and Turkey.

“What accounts for this growth is the continued weakness of national brands,” Brian Sharoff, president of the Private Label Manufacturers Association told CPGmatters in an interview in Amsterdam at the recent PLMA International trade show where the association’s coveted Salute to Excellence Awards for wine were announced.

“Look at all of the different companies and countries here at the show,” he said. “Small companies feel they can compete in categories where there are big national brands. It’s partially due to retailers changing who can be on the shelf and knocking out certain companies. Add to that the spectacular growth over the last couple of years of Aldi and Lidl offering 90% private label. They know how to build traffic in their stores. That’s the catalyst in the marketplace.”      

Private Label’s gains in Europe have come even in countries where store brands already had very high penetration. Market share for retailer brands climbed in the United Kingdom, Germany, Belgium and Portugal, where share was more than 40%.

In the UK, where supermarkets are investing in their private label programs to meet competition from the discounters, market share climbed to more than 46%. 

Private label still accounts for half of the products sold in Spain and Switzerland. Market share in France remained above 30%, but declined as some retailers reduced their price entry brands and moved toward more premium products.

The biggest market share gain was posted in Turkey, where private label climbed by 3 points to nearly 26%. In Greece, retailer brands still account for one of every three products sold in the country.

In Scandinavia, there were gains in Sweden, Norway and Finland, with market share in all three countries above 30%. Private label share also was at 30% or above in four central and eastern European countries—Poland, Hungary, Czech Republic and Slovakia—led by Hungary climbing to 34%. Market share remains above 40% in Austria.

Market share stayed at or above 20% in Italy for the sixth consecutive year, but declined by a point last year. Prospects for retailer brands look to improve as Aldi with its strong private label program enters the country.

Meanwhile, at the trade show in Amsterdam, 28 retailers from 10 countries were named winners of PLMA’s 2018 International “Salute to Excellence Wine Awards.” The awards aim to recognize supermarkets, hypermarkets, discounters and other grocery retailers for quality and value of their private label wines. In all, 58 wine awards were announced in categories covering reds, whites, roses, sparkling, and fortified wines.

The importance of food retailers in wine sales has emerged as trade statistics reveal that more than 50% of wine purchased in the United Kingdom, France, Germany, Spain and Italy is bought at a supermarket, hypermarket or discounter.

Sharoff of PLMA said, “This is resulting in a significant growth of private label wines in all categories as these retailers are well-known for their private label food, snacks, beverages, health and beauty and household products. According to Nielsen, private label sales in these categories is already more than 40%-50%.”

The awards demonstrate that private label wines are succeeding in all price ranges and varieties. “It is not a situation where consumers are shopping for cheap wine. It is clear from the awards that shoppers are looking for quality and good value. That is why the awards reflect both best quality and best value,” Sharoff said.

Analyzing the wine awards by country or format, discounters, such as Aldi and Lidl, won 12 awards, which is a continuation of a trend found at other wine competitions over the past few years. By country, retailers in France won 12 awards, retailers in the UK won 8 awards, retailers in Spain and Portugal won 7 awards, retailers in Italy won 6 awards, retailers in The Netherlands won 5 awards and retailers in the US won 4 awards. The top score in red wines for Best Quality was Albert Heijn’s AH Excellent Selectie Côtes-du-Rhône Villages. The top score for Best Value was Auchan’s Pierre Chanau Cahors Malbec. Among white wines, top score for Best Quality was Central Food Retail in Thailand for its Joy Rhein Riesling. Top score for Best Value was Aldi Süd’s Mario Collina Pinot Grigio Valdadige.

More than 300 wines were submitted or purchased for judging. Panels were composed of approximately 18 wine professionals, Masters of Wines, sommeliers, wine writers, and industry experts. Each panel was led by a Master of Wine.