The Largest Food & Beverage Importers Directory
Subscribe   |   Log In   |   Help   |  
Home > Resources > Trading Elements
Resources
Country Profiles
Market Reports
International Business Associations
International Trade Statistics
Free Newsletter  
Get TradeNews, member info and HOT Trade Leads delivered by email.

Marketing Your Products
 
Rabobank predicts consolidation wave to flow from private label trend
June, 2011
 

Private label growth will set off a wave of consolidation in the European food industry but how each product category is affected will vary significantly, according to Rabobank.

Back in March, the bank released a report predicting that the global market share of private label will double from 25 per cent today to 50 per cent by 2025.

Now Rabobank has laid out its predictions on how the European food manufacturing industry will be affected by the change.

Big threat to smaller brands

Sebastiaan Schreijen, a Rabobank analyst, said private label poses the biggest threat to smaller brands who will have to decide whether to pursue market niches or production scale.

Schreijen said: "Even more than before, the strategic focus for many suppliers will be on achieving cost leadership. This pursuit of economies of scale is expected to trigger a wave of specialisation and consolidation among smaller suppliers."

The analyst added that many manufacturers will be looking to target the private label market but here size will be crucial to meet the tough cost requirements of retailers. A consolidation wave among private label specialists is therefore expected.

In the long term, the private label trend is anticipated to create food markets divided between A-list brands from big multinational powerhouses, niche brands and a few large private label producers.

Different category, different pace

But the pace of movement in this direction is likely to vary significantly across the industry.

"Each product category is different and has to be assessed on its own merits,"said Schreijen. "The pace appears to depend on catalysts such as the interest of private equity or A-brand presence, and typical hurdles to consolidation such as physical distance, consumer perception, ownership structures and barriers to entry."

For example, Schreijen said private label investors, with their focus on economies of scale, have driven consolidation in categories such as juice and wet cooking sauces.

Other factors may act as a brake on change C if family businesses or cooperatives dominate a segment, for instance, then heritage or member interests may block or delay consolidation.


Other Articles View all...
Minister Ashfield Boosts Market Access and Advances International Cooperation in China November, 2011
Taylor of FDA: private audits won't replace public oversight November, 2011
Local Business Listing: A Marketing Opportunity and a Security Challenge July, 2010
Legal issues about Trademarks and Domain Names April, 2010
How Much Should You Spend on Your Yellow Page Advertising Budget? April, 2010
Google
 
Web www.BusinessChannel1.com
Contact Us   |   About Us  |  Term and Conditions  |  Privacy Policy  |  Advertise with Us  |   Importers Registration (Free)
Feedback  |  Bookmark This Page |  Tell a Friend  |  RSS / XML Feeds