Transcript Top Trends in Global Private Brands Innovation

Presented by
Lynn Dornblaser,
Director, Innovation & Insight
Mintel Group Ltd.
© 2016 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel.
Top Trends in Global Private
Brands Innovation
Who we are
The insights behind your next big idea
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Consumers
Markets
Innovation
Trends
We ask 30,000 people for their
opinions each month.
We track consumer spending in
3,000 markets across 34
countries.
We cover 33,000 new product
launches from 62 countries
each month.
We track more than 70
consumer lifestyle trends and
thousands of observations on a
daily basis.
Today’s presentation
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•
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First, some comments about the US market, and
US consumers
Five trends from European private label to
explore
Thoughts for the future
Private label accounts for 25% of all product launches in the US
In any given year in the US market, private label accounts for about 25% of all new products
introduced. This percentage is up considerably from the 17%-18% we saw before the recession.
However, it is quite different from the contribution made by private label in other parts of the world.
US new product introductions, 2011-May 2016, by branded or private
label
100%
80%
60%
Private Label
40%
Branded
20%
0%
2011
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Source: Mintel
2012
2013
2014
2015
Jan-May
2016
But the percentages are quite different by category
US new product introductions, by branded and private label, by
category, 2011-May 2016
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Branded
6
Source: Mintel
Private Label
Also, the pattern is quite different in other parts of the world
The percent of product introductions that are private label differ significantly from one country to
another. Those countries with relatively few retailers tend to have greater percentages of private label
introductions.
New product introductions, selected countries, 2011-May 2016, by
branded and private label
100%
80%
60%
40%
20%
0%
Branded
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Source: Mintel
Private Label
Consumers look to private label to deliver “simplicity”
About a third of consumers say that minimal or simple ingredients influences their purchases, far
more than does an organic or US-made claim.
Factors influencing private label purchases, % responding, USA
Minimal/simple ingredients
Organic
US region-specific
Seasonal offerings
Sustainably produced
Premium packaging
0
8
Source: Mintel
5
10
15
20
25
30
35
Private label lags in some “better for you” claims
Branded and private label introductions,
USA, 2011-May 2016, by selected claims
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Branded
9
Source: Mintel
Private Label
Room for expansion
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Although private label accounts
for more than a quarter of all
new product introductions in the
US market, only 15% of
products labeled as All Natural
are private label, and only 22%
are organic.
•
Note, however, that private
label over-indexes when it
comes to more basic claims
such as Vitamin/ Mineral
Fortification.
The value provided by private label appeals to specific groups
The groups that are most likely to purchase private label instead of national brands appear to
be those with children (which often includes Older Millennials), and men. Note also that those
with the highest income overindex on purchase as well.
Percent of US consumers who say they always or often buy private label
instead of national brands, by select demographics, USA
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Source: Mintel
Millennials a key target for premium private label
Although most consumers are not willing to pay more for premium private label, they are interested in
purchasing more of it. This is particularly true of Millennials.
Attitudes regarding private label, US, % responding
I would be willing to buy store brand products that
cost more than national brands
I would be interested in buying more premium store
brand products
0
Non-Millennials
11
Source: Mintel
10
20
30
Millennials
40
50
60
70
80
90
Millennials more likely to look for natural values
Factors influencing store brand purchase, USA, by generational
group, % agree
I would pay more for store brand
products with minimal ingredients
I would pay more for store brand
products with simple ingredients
Non-Millennials
Millennials
I would buy more store brand products if
they used locally-sourced ingredients
0
12
Source: Mintel
10
20
30
40
50
60
70
80
90
Super U: Making transparency into a funny marketing operation
When shoppers pass by the
screen their shopping carts will
be enlarged and an animation
will appear based on the
contents. For instance, if a
customer is purchasing milk, the
screen will show a cow in their
cart as well as some further
information about the particular
dairy product, such as the farm it
has been sourced from.
37% of French consumers say that milk packaging should have more information about
where the milk came from (eg dairy farm/ farmer)
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Source : Mintel Trends
What you can learn from
European private label
Five potential areas to explore
• Go your own way
• Tiers with a strong difference
• Go ethnic
• Try artisanal
• Get in front of trends
First, a few comments on the UK consumer
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UK consumers: More at home with private label of all kinds
82%
51%
32%
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UK consumers who have purchased private label
products in the last three months
UK consumers say they would be happy to receive a
premium private label product as a gift
Expect premium private label offerings to be more
innovative than standard private label
Go your own way
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European private label has done a good job of creating
trends and introducing products that are not similar to
anything else on the market
While we see some US retailers doing the same, there is
still room for more
Why? Products unique to only you will keep consumers
coming to YOUR store rather than your competitors’
Unique items can bring in new customers, keep existing ones
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Unique flavor: Toddler
smoothie with fruits and
vegetables
Unique flavor:
Apple mousse with
raspberries
Unique form and
positioning:
Crepes with a soccer tie-in
Rema 1000 Lev Vel
Organic Smoothie with
Sweet Potato &
Blueberries, Norway
Coop Naturaplan Bio Betty
Bossi Organic Apple
Mousse with Strawberries,
Switzerland
Netto Olé Olé Mascarpone
& Orange Football Crépes,
Germany
Tiers with a strong difference
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UK retailers pioneered the concept of private label tiers,
and continue to innovate
The tiers function as new brands might, telling consumers
what is unique or new about them
US retailers have been embracing private label tiers, but
more can be learned from abroad
– Make value private label seem less “value”
– More limited-time tiers (e.g. holidays)
– Going beyond “premium”?
Private label for a specific time of year
Marks & Spencer offers its Spirit of Summer private label line for a limited time, and with
a focus on summertime flavors and eating occasions.
M&S Spirit of Summer Pina
Colada Luxury Yogurt, France
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M&S Spirit of Summer Tinga
Chicken & Chorizo Pizza,
Ireland
Going even MORE premium
Waitrose, long seen as a premium retailer, has introduced its Waitrose 1, a premium line
that brings together several earlier premium lines from the company. The aim is to
provide customers “the best of the very best.”
Waitrose 1 Spanish Stuffed Olives
Waitrose 1 Boneless Scottish
with Almonds, Pimiento, Hazelnuts,
Prime Fillet of Salmon, UK
Silverskin Onions and Capers, UK
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Good, better, best from a traditional UK retailer
Morrison’s offers a range of tiers in its private label offerings; these represent
standard good (value), better (standard) and best (premium).
M Savers Strawberry
Cheesecakes, UK
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M Slow Cooked Bourbon
Boneless Beef Ribs, UK
Morrisons The Best British
Beef Chuck Steak Burgers,
UK
More segmentation in private label offerings
Morrison’s doesn’t stop at good, better, best, but offers a variety of additional sub-lines
of private label, usually more premium than the “best” offerings.
Morrisons Fresh From Market
St Smoked Haddock Florentine
Portions, UK
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M Signature Wm Morrison
Hazelnut Praline Tart, UK
Sainsbury’s basics: Value with values
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Ad campaign used Jamie Oliver and
promoted affordable family meal solutions
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Sales grew by 50% that year, the retailer
claimed
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Sainsbury's has long enjoyed an outstanding
reputation for quality, and allying that to value
created a much broader appeal
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The retailer used messages such as 'live well
for less' and 'feed your family for a fiver‘,
underlining value and health and quality,
which have been very contemporary issues
for consumers
Go ethnic
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European private label is often more adventurous
when it comes to authentic ethnic foods
US Millennials are especially interested in trying new
cuisines, and they also are more interested in private
label
Consider sub-lines of specific ethnic food types, or
food truck offerings, or ranges varying in level of
authenticity
Ethnic private label offerings span cuisines and prices
Authentic ethnic foods don’t have to be premium—in Europe hard discounters such as
Aldi and Lidl have extensive lines.
Lidl’s Vitasia Japan Dried
Roasted Nori Seaweed
Sheets, Portugal
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Aldi’s Specially Selected
Malaysian Style Chicken
Laksa Soup, UK
AH Albert Heijn Green &
White Tea with Lychee &
Lotus, Netherlands
Try artisanal
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“Artisanal” is open to interpretation, which can be a
good or a bad thing
However, the trend toward small-batch or unusual
ingredients and provenance continues to grow
In the US market, private label does not leverage
this as well as it could
There are many ways to incorporate artisanal values
Unique ingredients
Auchan "Les Recettes du
Traiteur..." Emmental,
Smoked Pork Belly,
Raclette Cheese & Onion
Pizza, France
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“Fresh from the farm”
image
Albert Heijn AH Excellent
Italian Stir Fry Vegetables,
Netherlands
Provenance
Co-op British Crème
Fraîche, UK
Get in front of trends
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Don’t wait for the major CPG companies to create or
capitalize on a trend
European private label is more likely than US private
label to jump into trends early, and also will drive
completely new products as well
Private label often gets into trends early in other markets
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Getting into the healthy
protein trend
Everything kale
Layered “cup” salads
Exito’s Taeq Roasted
Almonds with Salt,
Colombia
Asda Vegetarian Kale,
Pesto & Sweetcorn Bites,
UK
7-Eleven Cofoco
Superfood Salad with
Chicken, Cabbage &
Pesto, Denmark
And sometimes leads the market in new trends
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Agua fresca juice/water
drinks
Cold-brew coffee
Baobab as a functional
ingredient
M&S Spirit of Summer
Watermelon & Lime Agua
Fresca, UK
Migros Classic Original
Cold Brew Coffee,
Switzerland
Axfood’s Garant Dark
Chocolate with Baobab,
Sweden
Final thoughts
Adopt
Keep an eye on European private label for ideas and
concepts that you can bring into your stable of
products. Look at provenance, chilled items, premium
values.
Adapt
Remember that the markets differ significantly—modify
your approach to better fit into the US marketplace.
Chilled may not be right for many categories in the US;
provenance isn’t about “local,” but about “where”
Improve
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Fine-tune your offerings so that they resonate best
with your specific consumer base. Wegmans can do
chilled, Aldi likely cannot; Whole Foods’ organic
message differs from Safeway’s
For more information:
mintel.com
© 2016 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel.
Lynn Dornblaser
Director, Innovation & Insight
Mintel Group
312 450 6117
[email protected]
@LynnMintel