In the May/June 2024 edition of ESM, we spoke to several prominent operators across Europe about how they are enhancing their private-label offerings, including Sara Simón León, Head Of Own-Brands, BILLA CEE/IKI.
What recent trends in private label have you observed in your business, and also the wider market?
It is undeniable that private labels are becoming more and more popular. Major events, such the cost-of-living crisis, have led our customers to trade down, to look for savvy shopping, to seek value. Private labels have been an excellent answer to these needs, but not only this. Due mainly to the pandemic, our lifestyle habits have changed.
We work and eat more from home, we focus more on health and sustainability, so customers are asking us for an assortment evolution. With private labels, we are able to react to these trends quicker and more flexibly.
Most European countries have seen inflation ease in recent months. Do you think that this will affect private-label purchasing, as brands become more competitive?
Even though the growth of private labels has been driven by the recent major events mentioned before, I firmly believe that the evolution of private labels has not reached its limit. Nowadays, private labels have little to envy in the so-called ‘A-brands’.
We offer comparable quality, in nice packaging, and under a competitive price. Customers have now tried our products, and we will give them all the reasons to keep consuming them.
I am of the opinion that the phrase ‘private label’ is already old-fashioned, and not applicable to the current situation any more. We want to develop the most trendy and innovative brands, which compete with the traditional ones.
Private-label products are traditionally split into three tiers: value, standard and premium. Which of these has shown the most growth for you, and why?
Due to customers becoming more price-conscious, we expected to see growth in our price entry brand, Clever, which has indeed been confirmed by the sales results. We were ready for this demand and developed a strong basic assortment, which goes across all our categories – both food and non-food – with more than 400 articles.
Is it only the value tier that is showing an opportunity for private labels?
No, not at all. We have actually seen an important gap for the highest segment. Unfortunately, customers have not been able, recently, to go out for dinner as much as they used to do, or to spend that much money in premium articles as before. Still, everyone does want and need to treat themselves from time to time.
This is why we decided to relaunch our Billa Premium brand last Christmas. With the closest cooperation with our suppliers, we were able to offer more than 100 exquisite, premium products. One of those products – our Billa Premium Fruit Spread Seville Orange – won in the European Private Label Awards 2024, under the Breakfast category, and another three – Billa Premium Prosciutto Cotto with Truffles, Billa Premium Antipasto Misto, and Billa Premium Tagliatelle with Funghi Porcini – were finalists in different categories. We are proud that our products are not only liked by our customers, but by the most renowned juries in Europe.
If we talk about numbers, the relaunch of our Billa Premium brand brought us an increase of 121% in turnover, compared to last year, showing that customers do also trust us when purchasing the upper-market products.
What opportunities do you see for retailers to maximise the growth of private label in the years to come?
In my opinion, the key will be, now, to evolve from the traditional value-for-money private labels to start offering the trendiest brands, which can compete with A-branded products in the market.
One example I can tell you about is Nice Bites, an own-brand we have recently launched in our markets. This is a segment brand – with no Billa endorsement – covering all the snacking nuts and dry fruits and targeted to young adults. While analysing the most important factors for this target group, we drew the conclusion that health and sustainability are two of the major topics which concern them. This is why we came up with a brand concept which is transparent and straightforward, based on these two dimensions.
We achieved this through the colour-coding of our backgrounds – for example, if customers are looking for the healthiest option, natural nuts, they will find them under the beige-background line. In the case of dry fruits, they will find them under the orange-background line.
This is only an example of many projects where we intend to answer to the needs of our demanding customers, proving to them that we have the knowledge, skills and passion to develop those brands which will make them come back to our stores.
