Olly Abotorabi
Senior Regional Insights Manager
July 2018
PRIVATE LABEL IN WESTERN ECONOMIES
IRI Special Report
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Executive Summary
1 | Market Context
2 | Market Performance
3 | How to Win
Agenda
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Executive Summary
Despite improved economic conditions
Private Label wins ahead
• PL is in the ascendancy at a regional level. Share grew to
39.4% (+0.4pt yoy). Unit share increased to 48.2% (+0.1pt)
• Range and Price are key levers driving trade-out from Brand.
Greater acceptance and trust in PL prevails over recessionary
behaviour still evident in some EU countries
• Value share grew in UK, Germany, Italy, Spain. Brand price
war legacy negatively impacted share in France & Greece.
Netherlands saw no topline change yoy.
• In Europe share is highest in UK (52.5%) and Spain (42.6%),
lowest in Italy (18.1%) & Greece (16.3%).
• Price gap to Brand closed to 29% on average. Material cost
increases, PL premium range development are influential.
• % Promoted volume decreased in 5 of 7 EU countries as
retailers fought to offset price increases and focus on quality
• PL Premium & organic ranges win ahead in France & Italy yoy.
• In the US PL share grows yoy led by range, price and
shopper uptake ahead of Brand. Share at 14.9% however
remains lower vs EU countries.
Product and retail evolution
• From Private Label to Private Brand. Innovative,
consumer focussed ranges with a finely balanced price-
quality ratio bid to drive differentiation and loyalty.
• New concepts emerge; from dedicated stores to ‘Private
Brands’ capitalising on evolving shopper trends
• The retail landscape is broadening. Amazon and Google
drive the latest wave of channel disruption and provide
yet more opportunities for PL to grow.
• 37% of European shoppers look for cost savings online
2/3 of this consumer group making a saving.
• IRI US studies showcase PL’s loyalty credentials,
increasing purchase preferences across income levels
and age groups, with millennials leading the way.
• Consumer centric planning is key, as are multiple
external factors, from regulatory to environmental.
Gains across macro categories
• PL ‘EU’ share is highest in Frozen (47.1%) and
Chilled and Fresh (44.8%) lowest in Personal care
(16.2%) and Confectionery (15.6%)
• The highest levels of share growth yoy occurs in
Chilled (+0.8pt) Baby (+0.5pt) and Ambient (+0.4pt)
• Dairy price inflation and increased uptake in premium
ready meals drives growth in Chilled Retailers
embracing on the go savoury snacking trends gain a
better foothold in Ambient.
• PL gains in Baby led by quality products at everyday
lower prices helping sway shoppers from Brand.
• Biggest share in decline is in leading PL category
Frozen (-0.4%pt) yoy. Brands identify the recent
renaissance in category sales and innovate.
• US PL share strengthens across the majority of
macro categories, particularly in Frozen (ready meals,
meat) and Baby (wipes, food, accessories).
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MARKET CONTEXT
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From imitator to disruptor… Private Label (PL) virtues have come a long way
Source: IRI US Growth Summit 2018
1980 2018
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Private Label to Private Brand
Innovative, consumer focussed ranges with a good price-quality ratio. PL is at the forefront of European retailer communications, bidding to
drive shopper loyalty and take retailer own products from supporting cast to lead performers.
Source: Retailer websites: Mercadona, Co-op Italia , The Grocer (UK) May / June 2018
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New concepts…from dedicated stores to ‘Private Brands’ capitalise on evolving shopper trends
Healthy snacking on the go, affordable facial cosmetics, healthier food ranges characterise key retailer plays across Europe
Source: Retailer websites May / June 2018
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The retail landscape broadening… and is ripe for further Private Label expansion
Spend saving opportunities, faster and more convenient deliveries, more variety sponsored by big, up and upcoming Private Label players…
New competitor products across categories
covering both ends of the PL spectrum
New partnerships, new distribution
opportunities
Market entry and expansion
continues for hard discounters Specalised store banners with own
product focus
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Cost savings are high on the agenda of online shoppers in Europe…an opportunity for PL
Source: IRI European Shopper Survey 2017
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In the US Private Label builds momentum across all income groups in the US
Purchasing of PL products grows across all age groups…..Millenials show the most inclination, retirees and seniors less so.
Source: IRI US Growth Summit 2018
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 11 Source: IRI US Growth Summit 2018
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Doing the right thing…
• Governing bodies and shoppers scrutinise ethical business practices
more than ever. New regulations, health and lifestyle changes,
competitive market conditions and sustainability have been influential in
shaping products on our shelves and screens.
• Retailers and manufacturers are fast to put the shopper at the heart of
range development
• These factors need to remain at the core of retailer product development
with an openness to tackling new high profile challenges…
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MARKET PERFORMANCE IRI EU MARKETS
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• This report contains data gathered from France, Germany, Italy, Spain, Netherlands , Greece, UK and the USA. The data has been sourced from IRI Infoscan® MAT p/e
Dec 2017 (ITA p/e Feb 2017), IRI Market Advantage MAT p/e Dec 2017) IRI EU Price elasticity benchmarks 2018, IRI US Growth Summit 2018, IRI European Shopper
Survey 2017
• The market channels used for each country in this report are as follows:
Other key notes for readers:
• Data availability, coding and segmentation varies by IRI country. 10 Macro Category definitions used to provide a consistent grouping of comparable products.
• Macro Categories analysed: Chilled and Fresh, Ambient , Frozen food, non-alcoholic drinks (including tea and coffee), Household, Personal care (Beauty + OTC) Baby
(food and accessories), Confectionery, Pet (food and accessories), Alcoholic drinks.
• Packaged and random weight fresh produce included for Italy in this report.
Resources
Country Channels used
UK IRI Infoscan: hypermarkets and supermarkets, convenience, specialist, forecourts
Germany IRI Infoscan: hypermarkets, supermarkets, discounters
Netherlands IRI Infoscan: hypermarkets and supermarkets
Italy IRI Infoscan: hypermarkets, supermarkets, small traditionals, discounters and drugstores
France IRI Infoscan: hypermarkets and supermarkets, convenience, discounters, ecommerce
Spain IRI Infoscan: hypermarkets and supermarkets, including Canary Islands
Greece IRI Infoscan: Hypermarkets and Supermarkets
USA IRI Market Advantage: Total Store Multi-outlets and Convenience
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20,8
4,4
16,5
11
9,1
3,5
4,2 (-0.4pt)
(-0.4pt)
(-0.8pt)
(-0.7pt)
(-1pt)
(-2pt)
(-2.6pt)
Positive movements across the region with GDP in growth and unemployment reducing
1,8
3,2
3,1
1,5
2,2
2,2
1,8
Euro zone (19): Down from
9.6% to 8.7% in Dec 2016
Euro zone (19) GDP
+2.4% for 2017
Source: Eurostat GDP 2017 full year vs 2016, Unemployment Dec 2017 vs Dec 2016
GDP change and Unemployment rate% vs 2016
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FMCG in Europe full year 2017
Price increases support industry growth in UK and France, good underlying unit growth in Germany, Spain , Italy and Greece
-1,6
1,6
0,3
1,9 2,1
0,3
3,1
1,7
4,3
1,5
2,9 2,7 3,1
2,3
Total FMCG change% | 2017 vs 2016 | IRI EU countries
VALUE
UNITS
Source: IRI UK Hypers, Supers, Convenience, IRI France Hypers, Supers, Convenience, Discounters, e-commerce. IRI
Germany Grocery and Discounters IRI Spain, Italy, Netherlands, Greece Hypers and Supers
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Private Label (PL) outperforms vs National Brands in UK, Germany, Italy, Spain
+4.3%
+1.7% +5.8%
+4.3%
+0.7%
+2.3%
+3.6%
+2.1%
-1%
+1%
+4%
+2.9%
+2.7%
+2.7%
P/L vs National Brand performance | MAT value sales YoY%
Total IRI Region
P/L +4.3%
Brand +2%
Source: IRI UK Hypers, Supers, Convenience, IRI France Hypers, Supers, Convenience, Discounters, e-commerce. IRI
Germany Grocery and Discounters IRI Spain, Italy, Netherlands, Greece Hypers and Supers
Outperformance vs PL
Underperformance vs PL
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PL share for the region grows, supported by range expansion retail price inflation
Value share% Unit share% Assortment share% % of PL Volume on
Promo
% PL share of
promoted volume Unit price index: PL
vs NB
39.4% +0.4pt
48.2% +0.1pt
27.2% +0.1pt
13.1% -1.5pt
22.9% -2.2pt
71.5pt +0.6pt
PL Share and explanatory KPI’s | MAT and Change YoY% | IRI EU countries
Source: IRI UK Hypers, Supers, Convenience, (Kantar for UK value & unit shares) IRI France Hypers, Supers, Convenience,
Discounters, e-commerce. Germany Grocery and Discounters Spain, Italy, Netherlands, Greece Hypers and Supers
Premium tier development across countries helps to sway savvy shoppers from Brand into PL
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PL share highest and growing most in the UK, share is lowest in Greece
52,5
40,1
32,9
18,1
42,6
29,2
16,3
PL MAT value share and pt change vs a year ago | IRI EU countries
+0.2pt +0.6pt +1.0pt 0.0pt -0.3pt -0.7pt +0.5pt
Source: UK Kantar Worldpanel, IRI France Hypers, Supers, Convenience, Discounters, e-commerce.
Germany Grocery and Discounters Spain, Italy, Netherlands, Greece Hypers and Supers
MAT share
change
YoY%
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Reduced volumes sold on deal across the majority of countries
19,7
11,1
8,1
18,8
10,1 9,4
8,1
PL % volume sold on promotion and pt change vs a year ago | IRI EU countries
-1.2pt -1.1pt -6.7pt +1.8pt -0.7pt +0.7pt -2.3pt
Source: IRI Hypers and Supers (UK, France, Italy, Spain, Netherlands, Greece)
Germany Grocery and Discounters
* %Value sold
on deal for
Greece
MAT volume on
promo change
YoY%
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PL price index: Gap between PL and Brand closes across the majority of countries
PL price increases but behind the rate of Brands in the UK. Conversely PL price declines ahead in Greece yoy in response to aggressive
Brand price cuts. The greatest differentials are in France, Germany, least in Italy where PL share is one of the lowest.
78,1
63,5 61,3
83,7
74,9
65,9 67,2
Private Label vs National Brands | PL Unit Price Index 2017 vs 2016 | IRI EU countries
+0.9pt +2.1pt -1.3pt +0.8pt -0.1pt +0.8pt +0.8pt
Source: UK Kantar Worldpanel, France Hypers, Supers, Convenience, Discounters, e-commerce.
Germany Grocery and Discounters Spain, Italy, Netherlands, Greece Hypers and Supers
MAT price
index change
YoY%
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Price Elasticity for FMCG in the region is -0.89, with several countries quite inelastic
IRI studies suggest relative inelasticity for EU FMCG markets at a regional level…..yet elasticity contrasts across key EU markets,
categories and by Brand. Understanding this lever in bespoke detail is critical to positioning your Brand.
-0.89
Average Price Elasticity
in EU
Average
Price
Elasticity
in Italy is…
Source: IRI Price elasticity index, analyses with modelling period 2015 – 2017
…in
France -0.72
-1.27
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PL ‘EU’ share is highest in Frozen and Chilled, where growth is highest at regional level
7 of 10 macro categories boost their standing across the region yoy. Only Alcohol, Frozen and Soft Drinks lose out. Biggest gains in Chilled
and Baby.
18,1
35,0
21,9
44,8
15,6
47,1
37,6
16,2
33,0
23,5
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
-0.1pt +0.4pt +0.5pt +0.8pt 0.0pt -0.4pt +0.1pt +0.2pt +1.1pt -0.1pt MAT share
change
YoY%
Macro Categories | MAT Value share% and ppt change yoy| Total IRI EU Countries
Source: IRI UK Hypers, Supers, Convenience, IRI France Hypers, Supers, Convenience, Discounters, e-commerce.
Germany Grocery and Discounters Spain, Italy, Netherlands, Greece Hypers and Supers
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-8
-1,2
11,2
Premium and Organic PL forges ahead in France & Italy, while retailer rationalisation sees
mainstream PL outperform in the Netherlands
/
-2,4
3,9
-3,2
-8,2
2,3
10,8
Source: IRI France Hypermarkets, Supermarkets, Convenience, E-commerce, Discount, IRI Italy and
Netherlands Hypermarkets and Supermarkets. 5% of Italy PL uncoded
Value YoY% Share of
total PL%
Share of
total PL% Value YoY% Value YoY%
12.6 (-0.6pt)
Share of
total PL%
82.4 (+1pt)
5.0 (-0.3pts)
4 (-0.7pt)
75.1 (-0.4pt)
17 (+0.3pts)
6 (-0.5pt)
83 (-0.6pt)
11 (+1.1pts)
PL Tiers including Organic | MAT Value change yoy% and value share% |
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UK
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P/L growth led by price inflation, premium range development & trade-down from Brand
Stronger Brand Price inflation ahead of PL increases price gap
Value share% Unit share% Assortment share% % of P/L Volume on
Promo
% P/L share of
promoted volume Unit price index: PL vs
NB
52.5% +1pt
58.7% +1.4pt
29.4% +0.1pt
19.7% -6.7pt
22.7% -7.7pt
78.1pt -1.3pt
PL Share and Explanatory KPI’s | MAT and Change YoY% | UK
Source: Kantar Worldpanel for share and price, IRI Major Multiples for assortment and promo
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PL stable to growing across all Macro Categories
Recessionary behaviour is evident as consumer price increases rise ahead of wages inside the latest year. Reduced levels of Brand and P/L
promotions make the latter a more attractive option Share is strongest in Chilled, Frozen and Ambient, lowest in Confectionery.
17,5
32,1
17,4
60,0
8,4
44,6
29,5
11,4 20,9 19,7
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
+0.7pt +1.4pt 0pt +0.4pt 0pt 0pt +1.5pt +0.6pt +1.1pt +0.1pt MAT Share
Change
YoY%
Source: IRI UK total market
IRI EU Macro Categories | PL MAT Value share% and ppt change yoy | UK
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PL Insights: UK
• PL share grows for a 4th consecutive year, partially due to consumer switching as prices
rise but also as premium ranges showcase quality credentials and are expanded further.
• Retailer range cuts continued in a bid to reduce complexity and cost, however Brands are
being culled ahead of PL ranges.
• Promotional support decreased for both PL and Brands in a bid to offset rising material costs,
benefitting the topline.
• Brexit continues to generate uncertainty. While full implications are still to be realised, a
weaker pound has led to hikes in ingredient costs. International businesses within FMCG and
beyond are reluctant to invest inwardly, others continue to weigh up and implement plans to
move production away from the UK. Downward revisions in economic growth, pressures on
income lead to reduced consumer confidence and cautious shopper spending.
• Brand ‘shrinkflation’ exercised by FMCG manufacturers in the wake of the referendum has
not been lost upon consumers and has partly helped to trigger trade out from Brand in to PL.
• Looking forward the continued FMCG incursion led by online retailers Amazon and Google
into FMCG markets signals a new wave of disruption, adding to the challenges posed by hard
discounters that helped drive acceptance of PL to this point. New distribution opportunities for
Brand and PL are opening up, but if the retailers expansion plans in other countries are a
blueprint, the opportunity could be greater for the latter to continue an upward trajectory.
• Homecare - delivers the most notable share gain from PL as shopper
recessionary behaviours extend to household products. PL wins ahead of Brand in
dishwash kitchen roll, toilet paper and air freshners yoy.
• Personal care - mirrors homecare, PL benefits from trade-down into equivalent
products, particularly within OTC health, hair care products and toiletry gift packs.
• Ambient sees the second biggest value share increase in this UK Macro category
yoy. Retailer range expansion within on trend categories such as savoury and
sweet snacking is evident. Crisps, Nuts, Popcorn and Biscuits are all specific
segments in which P/L outperformed and evolved premium tier products yoy.
• Alcohol – PL value grew despite the dynamic growth of Branded premium beers
and spirits yoy. P/L wins ahead in wines, sparkling wines yoy as well as the
emerging ready to drink mixes segment.
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GERMANY
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Topline share growth led by food price inflation and assortment growth
Value share% Unit share% Assortment share% % of P/L Volume on
Promo
% P/L share of
promoted volume Unit price index: PL
vs NB
40.1% +0.6pt
51.4% -0.3pt
28.8% +0.7pt
11.1% -1.1pt
27.2% -2.7pt
63.5pt +2.1pt
PL Share and Explanatory KPI’s | PL MAT and Change YoY% | Germany
Source: IRI Germany infoscan total market including hard discounters for share and price. Grocery
and drugstores for promotions
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PL wins ahead in food categories
26,0
43,1
25,4
54,1
20,7
55,2 45,0
21,0
54,2
31,0
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
-0.3pt +0.5pt +0.3pt +1.6pt 0.0pt -0.2pt -0.9pt -0.4pt -0.3pt -0.6pt MAT Share
Change
YoY%
IRI EU Macro Categories | PL MAT Value share% and ppt change yoy| Germany
Source: IRI Germany Grocery and Discounters
Hike in Dairy prices drives up Chilled & Fresh and total P/L share in Germany. Non-food categories continue to be impacted by
increased Brand listings in hard discounters, placing PL ranges under pressure
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PL insights: Germany
• PL share passes 40% in the latest year, growing strongly in value ahead of Brands
against the backdrop of a more buoyant economy.
• PL price index in Germany sees the biggest change, closing the gap to Brand by
+2.1pts in the latest year. PL products are on average are 36.5% lower. High price
inflation in dairy combined with retailers investing in quality and more premium tier
products are key factors.
• Range is growing at the expense of Brands within food generally yoy and quality is
improving particularly in Frozen and Chilled categories. This overshadows the
growing acceptance and influx of Brands into discounters, which has a negative
bearing on underlying unit share.
• Hard discounters promote PL in Germany for the first time, helping push up %
volume sold on promo from a traditionally low base.
• Opportunities - On shelf availability is often an issue amongst local retailers, one
which could provide an opportunity for PL which is less impacted by conditional
battles between manufacturer and retailer. The continued expansion of online retail
amongst leading players provides a platform for PL to build it’s profile.
.
• Chilled – sees the biggest increase in PL share (+1.6pts yoy). Shelf space is
tight, making it harder for Brand to gain a foothold. Dairy categories continue to
witness high levels of price inflation, helping push up value share
• Frozen – PL share is highest here at 55.2% as hard discounters dominate.
Innovation from PL has been key to maintaining a stronghold. Fish however lost
to stronger performing Brands in the latest year causing some erosion.
• Ambient - Pre-baked goods, Coffee, Oil and Nuts each grow well for P/L yoy.
Canned foods with a traditionally strong P/L share grow value, partly due to
packaging innovation
• Soft drinks - Poor summer ’17 weather, Brand premiumisation in soft drinks,
including tonics, as well as downsizing in packs and increased listings in hard
discounters continue to tip the scale heavily in favour of Brands.
• Homecare, Personal Care, Pet lose out yoy, led by hard discounters listing
more Brands impacting PL sales of Heavy Duty Detergents, Toilet Cleaners and
Dishwash. The same dynamic negatively impacts PL in Personal care and Pet.
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FRANCE
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Brand price war legacy and reduced assortment impact PL performance
Value share% Unit share% Assortment share% % of P/L Volume on
Promo
% P/L share of
promoted volume Unit price index: PL
vs NB
32.9% -0.7pt
44.4% -1pt
26.5% -0.2pt
8.1% +0.7pt
22% +1.7pt
61.3pt +0.8pt
PL Share and Explanatory KPI’s | PL MAT and Change YoY% | France
Source: IRI France Hypermarkets & Supermarkets Convenience and Discounters, Ecommerce for
value, unit shares and price, Hypermarkets and Supermarkets for range and promo
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Multiple categories lose out in France long-term influenced by Brand price wars
Share is strongest but declining most in both Frozen, Chilled categories . Homecare, lowest in Confectionery
10,6
29,1 23,2
34,6
9,6
40,0
30,2
9,9
22,2 19,3
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
-0.7pt -0.4pt +1.3pt -0.9pt -0.1pt -1.6pt -0.3pt 0.0pt -1.1pt -0.1pt MAT Share
Change
YoY%
Source: IRI France Hypermarkets & Supermarkets, Convenience and Discounters, Ecommerce
IRI EU Macro Categories | MAT value share% and ppt change yoy | France
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 36
PL Insights: France
• P/L share declines consistently during the last 4 years due to price war led by National
Brands. In 2017 this trend slowed to an extent, as key retailers outline intentions to
reverse this trend through greater PL investment.
• Price gap vs Brand closes yoy thanks to enhanced focus on premium product ranges,
which grow +9% in total yoy.
• Development of organic PL ranges signals a switch in emphasis and retailers better
meeting changing consumer habits. Over 50% of P/L launches in the latest year are
organic, leading to high annual growth of +15% yoy.
• Evolution across channels is visible, value ranges gain some traction within ‘Drive’ e-
commerce yoy, while new concepts such as Carrefour’s ‘Bon App’ urban convenience
stores stock a large range of P/L Snacks tailored to on-the-go consumers. Leading
retailers such a Leclerc and System U move to focus on more premium, indulgent and
healthier lines respectively.
• Legislation change – will restrict the aggressive nature of Brand price cuts locally and
push retailers to re-focus on new ways to win a share of transaction.
• Opportunities to diversify retailer ranges with more focus on organic and healthier
products will be essential to retailer portfolios to limit negative campaigns around food
quality, win shoppers and drive store loyalty as tougher sanctions on price take shape.
• Chilled & Fresh sees the most notable decrease in P/L share yoy. Heavy
decline in milk, foie grois and other chilled meats drive. Brands win ahead in
ready meals, sandwiches and fresh salads
• Alcohol’s rise is led by Branded premium beers and spirits, which impacts
PL share negatively yoy. This is typified by big label companies riding the
trend toward craft beers and modern spirits such as gin, whisky and vodka.
• Pet category share declines for PL yoy as Brands win ahead with more
premium priced products within cat food in particular.
• Baby is the one category in which P/L wins value share yoy. This is largely
due to sales gained from Brand in nappies and to a lesser extent infant milk
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ITALY
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Price inflation and shopper trading up support topline PL growth in Italy
Value share% Unit share% Assortment share% % of P/L Volume on
Promo
% P/L share of
promoted volume Unit price index: PL
vs NB
18.1% +0.2pt
20.9% +0.1pt
24.1% -0.2pt
20% -1.2pt
22% 0pt
83.7pt +0.9pt
PL Share and Explanatory KPI’s | MAT and Change YoY% | Italy
Source: IRI Italy Hypermarkets and Supermarkets
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PL strongest in Frozen, Chilled, Homecare. Growth coming mainly from food categories
5,0
18,3
9,2
25,2
5,1
28,1 23,4
7,6
20,5
9,9
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
-0.1pt +0.2pt +0.5pt +0.8pt +0.2pt -0.2pt -0.3pt -0.2pt 0.0pt -0.1pt MAT Share
Change
YoY%
IRI EU Macro Categories | PL MAT Value share and ppt change yoy| Italy
Source: IRI Italy Hypermarkets and Supermarkets
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PL Insights: Italy
• P/L share grew favourably in 2017 thanks to trading up across ranges while consumers
maintain a perceived continued focus on value for money. This led to the highest value
share point since 2013. Gains mostly came from food and drink segments, overshadowing
erosion in home care.
• Price increases yoy across macro food and drink categories also paint a comparatively
positive picture as non-food departments came under price pressure.
• New product development is instrumental in boosting PL position. Top retailers Co-op
Italia, Conad, Esselunga, Selex, Auchan and Carrefour have all moved to improve product
relevance and quality. Though range grows behind Brand it has generated more consumer
buy-in across top retailers Co-op Italia, Conad, Esselunga, Selex, Auchan and Carrefour
• Challenges and opportunities – Brands promote more aggressively yoy, so retailers will
need to maintain innovation and segment expansion which has seen perceptions of PL
improve significantly. Though at it’s highest point for 4 years, share is still comparably low
vs other countries, leaving opportunity for retailers to gain more of a foothold
• Aldi entered the market in March 2018 and will surely challenge the current market
complexion, with a compelling mix of low prices and quality PL products.
• Chilled & Fresh sees the biggest increase in PL share yoy. Increased focus on healthy
eating and snacking drives Fruit and vegetables upward . Interestingly, convenience wins
through too, despite a local preference for fresh, ready to eat meals experience high
double digit growth yoy, with Private Label at the forefront. Lastly, high price inflation in
dairy, particularly on Butter further strengthens value share.
• Frozen Brands increase dominance helped by more promotions and increased presence in
Frozen fish and Ice Cream categories. Consequently they benefit from the trend toward
buying more frozen, particularly the latter sub-category benefitting from a warm Summer ’17
• Baby – PL steals share yoy, owing to competitive positioning on products such as wipes,
nappies and to a lesser extent in infant milk
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 41
SPAIN
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 42
Trade out of Brand, price and strong range growth maintain PL gains
Value share% Unit share% Assortment share% % of P/L Volume on
Promo
% P/L share of
promoted volume Unit price index: PL
vs NB
42.6% +0.4pt
49.9% +0.3pt
34.1% +0.6pt
10.1% -2.3pt
35.1% -3.9pt
74.9pt +0.5pt
P/L Share and Explanatory KPI’s | MAT and Change YoY% | Spain
Source: IRI Spain Hypermarkets and Supermarkets
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 43
Share growth across the majority of macro categories, excluding Alcohol, Baby, Frozen
Frozen and Homecare are dominated by retailers, with almost 60% share of value but experience contrasting fortunes yoy
21,2
49,8
29,4
46,3
23,2
57,6 57,8
27,6
48,7
25,1
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
-0.4 pt +0.4pt -0.2pt +0.9pt +0.2pt -1.2pt +0.7pt +0.6pt +1.6pt +0.7pt MAT Share
Change
YoY%
Source: IRI Spain Hypermarkets and Supermarkets
IRI EU Macro Categories | PL MAT Value share% and ppt change yoy | Spain
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 44
PL Insights: Spain
• P/L share is the second highest across the region (42.6%) in Spain , accounting
for ½ of all consumer unit sales in 2017, and maintaining it’s upward trajectory
despite notably improved economic conditions in the last couple of years. Value
Share is above 40% in 5 of 10 key macro categories; strongest in Frozen and
Homecare, lowest in Confectionery and Alcohol
• Strong retail brand evolution – Leading retailer Mercadona drive shopper
loyalty and bridge the gap to national brands through trusted and continuously
evolving own brands such as Hacendado. Health, premium quality and
indulgence outline the spectrum of consumer trends catered for by Spain’s No.1.
• Challenges and opportunities – Consumer expectations are heigh with a need
for sustained low prices and a continuation of a strong retailer innovation
programme. Nevertheless growing credentials present opportunity to take further
share from Branded products
• Pet – sees the strongest PL share growth yoy aided by range development and
increased sales of more premium dog and cat food products.
• Chilled and Fresh – Gains comes from retailer ready meals, charcuterie and
yogurt based products.
• Ambient PL sales expansion is aligned to the on trend growth of savoury snack
products including nuts and seeds, aperitifs as well as canned goods including
tuna.
• Household – Domestic paper including toilet steals share from Brand in the latest
year.
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 45
NETHERLANDS
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 46
Recent growth plateaus as retailer own ranges are rationalised
Value share% Unit share% Assortment share% % of P/L Volume on
Promo
% P/L share of
promoted volume Unit price index: PL
vs NB
29.2% +0.0pt
35.5% -0.3pt
21.1% -1pt
9.4% +1.8pt
29.8% +3.6pt
65.9pt +0.8pt
P/L Share and explanatory KPI’s | MAT and Change YoY% | Netherlands
Source: IRI Netherlands Hypemarkets and Supermarkets
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 47
Mixed performances with inflationary and deflationary pressures driving the biggest movers
14,6
36,8
20,6
40,6
15,2
34,6 29,9
11,2
27,5 25,2
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
-0.3pts -0.8pt +1.1pt +1.6pt -0.8pt -0.6pt -0.7pt +0.2pt -0.6pt +0.1pt MAT Share
Change
YoY%
Source: IRI Netherlands Hypermarkets and Supermarkets
IRI EU Macro Categories | PL MAT Value share% and ppt change yoy | Netherlands
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 48
PL Insights: Netherlands
• P/L share - After a period of long-term growth P/L sales and share are now
stabilising. There are 3 main reasons:
• Firstly assortment growth has plateaued,
• Secondly, retailers have rationalised, moving from 3 PL tiers to 1 good quality
product tier, priced competitively. Consequently mainstream PL products
continue to dominate, and growth of organic, premium as well as value ranges
are curtailed in the latest year.
• Lastly, the diminishing growth of hard discounters reduces the momentum of PL
sales growth from this channel .
• Leading retailers like Albert Heijn are taking steps to improve quality and appeal of
everyday ranges, by reducing sugar content, or evolving fresh options for on-the-go
consumers. Number 2 player Jumbo is focussed on fulfilling the full food journey by
integrating foodservice labels within retail and expanding with the acquisition of Emté
• Opportunities remain to re-focus PL as a quality, differentiated range of products as
opposed to a cheaper alternative. The latest retailer initiatives can be a stepping stone
to building trust and driving future trade-up to more premium propositions.
• Chilled and Fresh PL growth is sustained due to high price inflation across dairy
categories, Milk prices in particular increasing as much as +12% yoy. This has
resulted in reduced consumption.
• Baby- Small scale growth in Baby food and babycare products boost share yoy.
• Ambient PL share trends downward due to increased pick-up of Branded Cereals,
Soups and savoury snacks yoy.
• Confectionery PL share squeezed yoy due to premiumisation and increased
promotions in Chocolate.
• Homecare – Increased ‘A’ Brand listing within discounters come at the expense of PL
and provide a more attractive price point to Grocery shoppers.
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 49
GREECE
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 50
Aggressive Brand price cuts and the exit of key Grocery chains stifle PL performance
Value share% Unit share% Assortment share% % of P/L Value on
Promo
% P/L share of
promoted value Unit price index: PL
vs NB
16.3% -0.3pt
20.9% -0.3pt
18.6% -0.7pt
11%(value)
0pt
8.1%(value)
-0.7pt
67.2pt -0.1pt
PL Share and Explanatory KPI’s | MAT and Change YoY% | Greece
Source: IRI Greece Hypermarkets and Supermarkets
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 51
P/L down across Categories as Brands trade aggressively to win share
13,8 12,9
20,8
10,7
31,1
19,1
32,2
19,2 24,3
6,8
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
+0.1 pt +0.1pt -1.4pt -0.1pt -0.1pt -1.9pt -0.6pt -0.1pt -3.3pt -1.3pt MAT Share
Change
YoY%
Source: IRI Greece Hypermarkets and Supermarkets
IRI EU Macro Categories | PL MAT Value share and ppt change yoy| Greece
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 52
PL Insights: Greece
• P/L share has suffered across macro categories during 2015 and 2016 and has only
lately showed signs of stabilising in 2017. This despite continued consumer demand
for low cost products. The pressure derives mainly from deep cut Brand promotions.
Add to this the exit of Grocery chain Carrefour / Marinopoulos, PL has been harder to
attain for shoppers in Greece.
• Assortment - Branded ranges increase faster resulting in a loss of share for PL.
• P/L price index gap to Brand increases in contrast to other countries in the region..
Retailers look to stay competitive and bring shoppers in.
• Challenges and opportunities exist to re-position PL both physically and mentally for
local consumers. Visibility on shelf positioning next to leading Brands on-shelf through
to tiering and developing quality value for money propositions. PL share is comparably
low vs other EU countries across core macro categories Frozen, Chilled and Ambient.
Could these be key focus areas from which equity can be built up?
• Branded manufacturers promoted aggressively in 2017 to win a share of transaction.
This won’t be sustainable, so the challenge of justifying higher price points and re-
building brand equity as conditions steadily recover, needs careful consideration.
• Pet – Heavyweight decline for PL as Brands win sales due to more frequent and
aggressive promotions on pet food yoy.
• Frozen is dominated by Brand in contrast to other countries in the region. PL share
decreases as Brands expand in key categories such as Vegetables and Pies.
• Baby- Strong category price deflation drives PL value share down ahead of Brand,
underlying demand for products does not improve as a result.
• Soft drinks - More frequent and aggressive Brand promotions take share away from
PL yoy.
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 53
USA
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 54
PL share increase led by premiumisation, increased range and uptake ahead of Brands
Value share% Unit share% Assortment share% % of P/L Units on
Promo
% P/L share of
promoted units Unit price index: PL
vs NB
14.9% +0.5pt
17.7% +0.6pt
12.3% +0.2pt
29% -1.5pt
15.6% +0.5pt
81.1pt -0.6pt
A strong year for PL with topline value sales growth of +4.3% vs Brand at +0.8%. PL price gap to Brand opens up. Average price
for the latter grows ahead yoy.
Source: IRI USA Total Store Multi-Outlets + Convenience
PL Share and Explanatory KPI’s | MAT and Change YoY% | USA
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 55
Share gains across the vast majority of US Macro categories, particularly Frozen & Baby
0,1
16,8 11,0
30,2
2,7
20,3
7,7
23,2 23,4
8,6
Alcohol Ambient Baby Chilled Confectionery Frozen Homecare Personal Care Pet Soft Drinks
0.0 pt +0.4pt +1.2pt +0.8pt 0.0pt +1.1pt +0.2pt +0.5pt +0.8pt +0.5pt MAT Share
Change
YoY%
Source: IRI USA Total Store Multi-Outlets + Convenience
IRI EU Macro Categories | PL MAT Value share% and pt change yoy| USA
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 56
PL Insights: USA
• A positive year for PL as topline sales (+4.3% yo) and share outperform total FMCG
(+1.3%). Value share jumped by+0.5pt to 14.9% yoy. Retailers took a bigger
proportion of sales across 8 of 10 key macro categories
• Channel performance varies. Share is up in Club, with Frozen and Beverages showing
strength. Convenience also sees positive momentum, mainly in Chilled and Beauty.
• PL price index gap increases despite an upturn in average price yoy. Brand prices
increased faster. The differential is though small, PL products are only 20% cheaper
on average vs Brand in the US. Only Italy has a smaller price gap in the EU.
• All income groups show a marked uptick in PL sales, emphasising increased
relevance, quality and trust deployed across the spectrum amongst consumers
• Millennials lead the charge as PL sales grow across all US consumer generations.
• Opportunities for PL to gain a stronger foothold remains. Share in the US is
comparably low benchmarked vs 7 IRI EU countries. Consumers evidently are more
trusting, particularly younger generations. Confectionery, Alcohol in particular have low
PL equity, retailers could focus their attentions in the future to premium tiers here.
Discounter, specialist and online retailer expansion will give ample opportunity for a
continued rise in PL presence.
• Frozen growth is powered by strong gains in fresh seafood followed by ready meals,
Meat , Vegetables and Pizza categories.
• Chilled PL upturn stems from strength in Meat, Seafood, Pasta categories and high
growth in from lunch solutions.
• Pet share gains for PL are by way of premiumisation in pet treat and pet supplies,
where underlying pack sales are actually flat yoy.
• Baby category sales growth in wipes and food signal increased equity of retailer own
products , a trend mirrored by many EU countries. a platform that enables growth in new
sub-categories such as baby and gifts and toys
• Personal Care sees PL share benefit from explosive growth in facial cosmetics, hair
accessories, while in health growth ahead of Brand in anti-smoking, vitamins and adult
incontinence
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 57
HOW TO WIN
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 58
Key takeouts
So What?
Expect intense consumer scrutiny to continue and understand what value means to
the consumer. Bargain hunting is now a popular hobby.
Anticipate all possibilities in the event that markets become less stable.
PL is focussed on competitively priced innovation in a bid to keep shoppers. Brand
manufacturers need to stay close to the latest consumer trends, be clear on their
USP’s and justify their premium. Target ing is key, millennials in the USA for
instance are less Brand loyal and open to PL.
Close collaboration between Manufacturer producers and retailers is essential.
Price and promo planning can be the difference between success or failure, in an
increasingly complex FMCG suite of PL and Brand products.
Ensure you are positioned to assess new channel potential and how much to invest
in a bid to win or defend against an inevitable increase in competitor products.
Private Label to Private Brand
• It’s perhaps surprising to see PL in growth given improving economic prospects in the EU and
USA. However, consumers increased willingness to attain value for money, recognition of
enhanced product quality supported by more and differentiated products wins shopper spend.
• Similarly, PL decline against a tougher economic backdrop may seem unlikely. A spotlight on
Greece and France reveals aggressive Brand price cutting, diluting PL potential to win here.
• From imitator to disruptor and now leaders – positive results are visible across a variety of
macro categories. Conscious effort to differentiate and drive loyalty is clear and evidenced by
the growing importance of premium PL tiers across EU countries.
• Continued innovation, premium tiering and trusted value propositions will help foster loyalty.
• Establishing the precise balance between price and quality is key. IRI studies identify price
elasticity variations across key EU markets, categories and Brands.
• The retail landscape is expanding rapidly. Discounters, specialists and nowAmazon and Google
are driving a new wave of disruption within FMCG and provide a greater platform for PL to thrive
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 59
How to Win: 3 ways IRI can help you stay ahead of the game
Price & Promo Assortment Digital
Getting pricing and promotions right are
critical to the overall profitability of any brand.
IRI analysis shows that 40%+ of promotions
are ineffective at profitably driving sales.
Through identifying the price points that work,
along with the supporting promotional
mechanics, brands can effectively plan with
their retail partners to deliver sustainable,
profitable growth.
With the continuous influx of new product
offerings and with limited space to
accommodate everything, the fight for shelf
space has never been so intense.
Manufacturers & Retailers who can
demonstrate the category growth delivered by
their products will win.
IRI's range review tools help retailers optimise
their assortments, and help manufacturers
understand how to avoid the cull.
Media is becoming increasingly fragmented,
especially with Digital on the rise. Consumers are
becoming frustrated with irrelevant, out of context
advertising.
Trying to reach the right consumer, through the
right channel, at the right time is incredibly
complex and expensive.
IRI Media analytics help brands understand which
channels to invest in, and how much should be
invested in each channel.
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 60
THANK YOU
For More Information, Contact Us…
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