Euromonitor International The rise of private label in savoury snacks Presented by Lamine Lahouasnia – Head of Packaged Food Research @SNACKEX #SNACKEX @Euromonitor @LLahouasnia
Euromonitor International
The rise of private label in savoury snacks
Presented by Lamine Lahouasnia – Head of Packaged Food Research
@SNACKEX #SNACKEX
@Euromonitor
@LLahouasnia
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Definition of snacks
Extruded Snacks 42%
Nuts 24%
Chips/Crisps 23%
Pretzels 7% Tortilla/Corn Chips 4%
Europe: The Size of the Savoury Snack Market in 2012
EUR 17 billion
What’s Really Driving Private Label?
Image courtesy of Jeff Eaton
How far has private label come in packaged food?
16%
17%
18%
19%
20%
21%
22%
-
100
200
300
400
500
600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Pri
vate
Lab
el S
har
e
Ret
ail V
alu
e R
SP -
€ b
illio
n
Packaged Food: Branded vs. Private Label in Europe, 2003-2012
Private Label Branded Food Private Label Share
So what about snacks?
16%
17%
18%
19%
20%
21%
22%
-
3
6
9
12
15
18
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Pri
vate
Lab
el S
har
e
Ret
ail V
alu
e R
SP -
€ b
illio
n
Snacks: Branded vs. Private Label in Europe, 2003-2012
Private Label Branded Food Private Label Share
How private label snacks fits in with the rest of packaged food
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Pri
vate
Lab
el V
alu
e S
har
e
Europe: Private Label Penetration in Packaged Food, 2012
Chilled processed food
Baby food Snacks
What has driven the rise of private label food in Europe?
Trust in private label
Looks the same, tastes the same Is it the same?
Economic Environment
Financial squeeze Can I get the same for less?
Retail consolidation
The success of modern retail Is there a choice?
Battle for industry consolidation: Germany
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009 2010 2011 2012
Top
5 C
om
pan
ies’
- R
etai
l Val
ue
RSP
%
of
the
Mar
ket
Germany: Consolidation in Packaged Food and Grocery Retailing, 2004-2012
Packaged Food Grocery Retailers
Battle for industry consolidation: Poland
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009 2010 2011 2012
Top
5 C
om
pan
ies’
- R
etai
l Val
ue
RSP
%
of
the
Mar
ket
Poland: Consolidation in Packaged Food and Grocery Retailing, 2004-2012
Packaged Food Grocery Retailers
Battle for industry consolidation: Russia
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009 2010 2011 2012
Top
5 C
om
pan
ies’
- R
etai
l Val
ue
RSP
%
of
the
Mar
ket
Russia: Consolidation in Packaged Food and Grocery Retailing, 2004-2012
Packaged Food Grocery Retailers
So, who has the upper hand?
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009 2010 2011 2012 Top
5 C
om
pan
ies’
- R
etai
l Val
ue
RSP
%
of
the
Mar
ket
Industry Consolidation: Packaged Food vs. Grocery Retailers, 2004-2012
34
%
25
%
0
10
20
30
40
50
0
20
40
60
80
100
SV
LT
ET
SK
CS
HU
LA
RO
PL
CR
BU
BS
RS
UK
BL
RU
MD
GG
AT
DE
FI
CH
SE
GB
DK
FR
NL
IE
BE
NO
PT
ES
IT
GR
TR
Eastern Europe Western Europe
Pri
vate
Lab
el P
en
etr
atio
n -
%
Shar
e o
f th
e T
op
5 C
om
pan
ies
- %
Europe: Consolidation in the Packaged Food and Grocery Retailing Industries, 2012
Packaged Food Grocery Retailers Private Label Penetration
The relationship between retail consolidation and private label
Private Label Priorities for Snacks
Image courtesy of Geoff Lane
0.00 0.50 1.00 1.50 2.00 2.50
Tesco
McCoys
Walkers Sensations
Walkers Extra Crunchy
Walkers Crinkles
Tesco Finest
Kettle Ridge Chips
Real Crisps
Nandos
Jack Pots
Burts
Kettle Chips
Kettle Select Vegetable
Red Sky
Tyrell's
Price per Unit - £
Chips/Crisps: Private Label Price Positioning, 2013
Private label positioning in snacks: Tesco
Creating the private label
space
Undercutting branded
competition
Private label positioning in snacks: Asda
- 0.50 1.00 1.50 2.00 2.50
Walkers Sensations
Walkers Extra Crunchy
Hunky Dory
Asda Chosen by You
Asda
Asda Extra Special
Lays
Mackies
Walkers Crinkles
Ruffles
Kettle Chips
McCoy's
Price per Unit - £
Chips/Crisps: Private Label Price Positioning, 2013
Crowding out the private
label space
Private label positioning in snacks: Sainsbury’s
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Walkers Sensations
Sainsbury's Taste the Difference
Kettle Chips
McCoy's
Red Sky
Tyrell's
Walkers Extra Crunchy
Tyrell's Vegetable Crisps
Price per Unit - £
Chips/Crisps: Private Label Price Positioning, 2013
Creating the private label
space
Private label positioning in snacks: Waitrose
0.00 0.50 1.00 1.50 2.00 2.50
Kettle Ridge Chips
Waitrose
Corkers
Walkers Sensations
Kettle Chips
Red Sky
Walkers Extra Crunchy
Walkers Crinkles
Burts
Tyrell's
Price per Unit - £
Chips/Crisps: Private Label Price Positioning, 2013
Creating the private label
space
Packaging imitation crucial for economy private label snacks
Packaging type Colour Imagery
Albert Heijn
Carrefour
Esselunga
Cross category ranges needed for standard and premium private label
What are the priorities for private label snacks in Europe?
Specialty ranges also becoming popular
Initial focus on health and wellness
Future likely to see establishment of ethical ranges
Premium ranges to be next challenge
Cross category range requirement
More of a priority than standard segment for retailers
Domination of the economy ranges
Price to be primary offering Imitation is key
What the Future Holds for Private Label Snacks
Image courtesy of Femto
So where now for private label snacks?
16%
17%
18%
19%
20%
21%
22%
-
3,000
6,000
9,000
12,000
15,000
18,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Pri
vate
Lab
el S
har
e
Ret
ail V
alu
e R
SP -
€ b
illio
n
Snacks: Branded vs. Private Label in Europe, 2003-2012
Private Label Branded Food Private Label Share
A perfect storm is brewing for private label in Europe
Disposable incomes stagnating
Retail modernisation to continue
Grocery retailers to prioritise PL
Trading down likely to return
-1
0
1
2
3
4
5
6
7
GG UK RU LA LT RO BU BS ET BL PL MD RS CR CS SV HU SK TR NO SE DK IE CH FI AT DE GB FR ES GR PT BE NL IT
Eastern Europe Western Europe
CA
GR
%
Europe: Outlook for Disposable Incomes, 2012-2017
Modern retail is everywhere
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SV
ET
LA
LT
SK
CR
H
U
CS
P
L
RU
U
K
BU
R
O
BS
R
S M
D
BL
G
G
DK
FI
N
O
AT
G
B
IE
NL
D
E
SE
FR
CH
P
T
ES
IT
BE
G
R
TR
Eastern Europe Western Europe
Mo
de
rn G
roce
ry R
etai
l Sh
are
Europe: The Rise of Modern Grocery Retail, 2002/2012
2002
2012
Where to invest…
Sales Growth
Margin Growth
…when expansion is no longer an option?
-20
-10
0
10
20
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Selli
ng
Spac
e -
Ye
ar o
n Y
ear
Gro
wth
(%
)
Western Europe: The Slowdown in Grocery Expansion, 2004-2012
Aldi Group Carrefour SA
Schwarz Beteiligungs GmbH Tesco Plc
Average
Is it inevitable?
Shapes ‘Pester Power’
Flavours Non-
traditional
Innovation
Event association
Party food
Health and Wellness
Healthier alternative
Marketing
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