American consumers in the future will be more like their European counterparts, who are seen as less influenced by name brand marketing. This was one of five private label trend predictions for 2011 made exclusively for PLBuyer by Carl Munyon, who spent 22 years as vice president of corporate purchasing with Aldi, which specializes in limited-assortment private branding. Munyon is a member of PLBuyer’s newly formed editorial board.
“There is a substantial difference in consumers’ approach to buying products in Europe versus the United States. The European consumer is technical-minded, very interested in product details,” Munyon says. “The American consumer is very much influenced by marketing. Feel and image drive the US consumer’s decisions. I believe that the US consumer will over time be more interested in the actual product itself.“
Munyon’s top five PL trends for 2001 are:
1. Quality expectation and involvement
“Innovation in private label has a twofold meaning,” Munyon says. “First, it means you stay ahead of the other private label products and packaging. Second, it is okay for private label to take the lead against the branded competitors: making important ingredient changes – such as sea salt or less sodium – or developing new and unique packing to better deliver the product to the consumer.
“Some retailers out there today, like H-E-B, have become the standard for a product even as a private label. This puts them in a strong position against the discounters and the normal chains that aren’t forward thinking enough to take these risks.”
2. Sustainability – packaging reduction, responsible farming and supply chain practices
Munyon sees premium packaging elements moving into private label. “Value-added and custom convenience will be demanded by the consumer,” Munyon says. “They will look for ‘easy-opening’ and re-sealable packaging. Portion-sized packaging and use of foil printing will move into private label.”
In addition, there will be pressure for more environmentally friendly packaging, through reducing the amount of packaging and its carbon footprint. Sustainability will be on consumers’ minds. “Private label will need to tell this positive story through images and words,” says Munyon.
3. Top retailers truly partnering with their top 20 suppliers – to develop the future
4. Shopper marketing and engagement – someone will create a holistic approach to private label within the store’s four walls
5. Continuing European influence in terms of what’s possible.
“Canada is a hybrid of the U.S. and Europe when it comes to the consumer and business approach,” Munyon concludes. ”The U.S. retailer can learn from some of the larger Canadian retailers, like Loblaws, that have had private label success. These retailers stay true to what the shopper is looking for in a private label product: quality, consistency and price. Private label, to the successful Canadian retailer… is about offering great quality, uniqueness and consistency in creating your own brand. The bottom line is to win and maintain the customer’s loyalty to your brand. However, you can’t do that by selling and “off-brand” product to just hit a price point.”
To see predictions from other members of the PLB editorial board, go to PrivateLabelBuyer.com’s A Closer Look section and click on their individual outlooks.