Private Labels to Squeeze out Smaller Brands from Indian Market

Thursday 18 April 2013, Amsterdam

Better margins and increasing consumer acceptance to drive private label sales in coming years. Private labels are not affecting market share of leading brands instead are eating out sales of secondary brands or B level brands in India.

“The private labels in food & beverage segment in India are expected to grow at compounded annual growth rate of 30 percent for next five years due to improved quality of products at low price point. As per the study, the margins from private labels range between 10%-15% in case of FMCG products and as high as 40%-60% in case of apparel sales. 85% of surveyed consumers have shown their willingness to repurchase the private label promoted by the respective retailer. The consumption of private label has helped Indian consumers bring down their monthly consumption bill by 8%-10% depending upon the product category” said Tanvi Sharma, Retail Analist.

Products of private label brands are manufactured for sale under a specific retailer. These are designed to compete against the other national brands in the market. Although a lot of factors can be pointed to be responsible for the general increase in shopper demand for private label products across the grocery industry, economy, quality and marketing are the three most important ones. In general, the consumer is not brand conscious while making a purchase of a grocery product which has given opportunity to retailers to fill in the gap. Instead, the availability of product, product placement, pricing and similar in-store marketing initiatives are more responsible for the final purchase decision in case of groceries. Packaged rice, packaged aata and pulses are the most preferred products in the private labels in food & beverages segment.

According to the recently published report  ‘India Food & Beverages Private Label Market Forecast & Opportunities, 2017’, the market for private labels in food & beverages will expand enormously in the coming years. The private label market is expanding as the low prices of these brands are increasingly attracting larger customer base. Almost all the retailers in India have a private label product within each segment in the retail store. The market is further forecasted to expand as the retailers increase their focus on the quality of the product. Bakery products are also expected to perform well in the coming years, as the retailers are increasing the level of involvement in such products. The upcoming initiatives of freshly grounded aata and in-store kneading processes for dough can help the retailers in retaining the customer.

‘India Food & Beverages Private Label Market Forecast & Opportunities, 2017’, gives a detailed and unbiased overview on private labels in food & beverage market in India. This report will help the readers identify the ongoing trends and estimated growth for the coming years, as a consequence of changing industry dynamics. The report will help industry consultants, retailers, distributors, vendors, investors and other stakeholders to align their market centric strategies according to ongoing and expected future trends.