Private label products are likely to prove a rising "threat" to established brands

Private label products are likely to prove a rising "threat" to established brands

Global retailers, such as Tesco, will become an increasing “threat” to international soft drinks brands as consumers turn to own label products, an expert has warned.

Speaking at the Soft Drinks International Conference in central London today (17 May), Andrew Dixon, Canadean's global commercial director, said that “private label” brands will look to take on corporate brands, pointing out that last year 25% of Tesco's business was from international markets.  “Private label is starting to eat into international brands and we see that as a threat,” said Dixon. 

He added: “There's a big opportunity for the retailers and as they expand, they will take their private label offering with them as well.”

However Dixon said it was not always about “better value” for consumers and suggested indulgence was more important than health for many, as evidenced by the success of the confectionary industry during the global downturn.  He said despite the drop in volume consumption in Western Europe and North America, there was still a lot of value in the marketplace. “Value, value, value, it's not just about volume,” he said. 

On emerging markets, particularly Asia, Dixon said China was a "key" region, even though it as an ageing popualtion. 

Meanwhile, Ratna Sita of Euromonitor International suggested growing consumer concerns over ageing and obesity are likely to drive further innovation in the soft drinks market as volumes drop in developed markets.

In North America, she said products that address “weight management” would prosper, while in Western Europe the “ageing process” was of interest to consumers. “Health and wellness products have even done well in the recession years,” she said.      

Innovations in packaging such as PET bottles and pouches would also drive growth, she added.