The Irish FMCG market has experienced a rollercoaster of change over the last 10 years. While convenience, indulgence, health and wellbeing were key growth drivers in the past, as the current economic situation continues to put pressure on consumers’ pockets a focus on value, price, promotions and private label are becoming more prevalent. Consumers are turning to private label as a belt tightening strategy and are finding that it is not necessarily the step down or trade off they were expecting.
According to Nielsen’s latest New Products Sentiment Survey, 67% of respondents said they would buy a new product store brand or value option when available, indicated openness to buying private label. Furthermore, they have indicated strongly that their intention is to buy even more private label in the future. Can mainstream brands compete? Market analysis in the past suggests that there is no single response strategy for manufacturers competing against store brands. Indeed, what works for one brand/category may not work for another. However, not competing against store brands means lost opportunity. Manufacturers need to actively compete against store brands in the same way they would against any other growing brand. Retailers will continue to drive premium store brand ranges as this is the area where they can achieve real margins. Brands need to ensure that they keep relevant, and more importantly, drive customer loyalty to ensure the repeat purchase, otherwise their future is at risk.