EUR: Recession boosts private label soft drinks - research
The global economic downturn has boosted private label soft drink sales in the UK, according to a new report.
'Private Label Trends in the Global Soft Drinks Market' by research agency Canadean showed that private label products in the total soft drinks sector now account for over one in every ten litres traded in the global marketplace.
If you discount the on-premise sector, where private label use is marginal, then private label's share of the market rises yet further, says the report, published this week.
The rise of private label is proving a "considerable threat" to branded soft drinks, it says.
"The dramatic financial turbulence of recent times has undoubtedly provided a major opportunity for private label. Apart from the obvious factor that consumers are more inclined to seek out the value that private label products represent in a downturn, there has been another factor that has boosted the private label segment; the shift from on- to off-premise sales," the report states.
"In many markets the footfall in bars and restaurants has fallen back sharply but consumers are compensating for this by drinking more at home and buying soft drinks in the off-premise, where the bulk of private label products are found."
As the modern retail channel develops, B brand operators in particular are vulnerable to the expansion of private label ranges, the report states; both compete against A brands on price.
A brands are also losing out, as the quality of private label offerings improves and private label products take up a wider range of price positioning to now incorporate value, discount, mainstream and premium price positions.
"Private label products will continue to make headway but brands can be reassured that private label will always struggle to compete with brand heritage and ultimately consumers want retailers to provide them with the choice that brands provide," the report says.
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