A new report from Circana’s, Private Labels: Transformation for Growth, found that own label achieved 9.4% growth in value sales and a 2.2% increase in volume sales across the largest six European markets (EU6 – UK, France, Germany, Italy, Netherlands and Spain) as of March 2024.
Own label now commands a 39% market share in value sales and a 46% share in unit sales, driven by chilled and fresh foods and notable gains in baby food.
Ananda Roy, senior vice president of thought leadership at Circana, said: “Private labels have redefined the competitive landscape, not just by offering lower prices but by consistently delivering quality, innovation, and sustainability.
‘Aligned with values’
“Their success underscores a broader consumer shift towards brands that align with their values, particularly in health-conscious and eco-friendly categories.”
Circana’s report outlined four strategic options for brands looking to compete effectively: diversify into adjacent categories; grow the category through innovation; preimmunise distinctively; and collaborate strategically.
Sales of own label products were expected to continue their strong momentum, driven by investments in range expansion, pricing strategies and product innovation. However, national brands have the potential to narrow the gap if they pivot towards innovation and diversify their portfolios.
Slowdown in innovation
Circana also warns of a slowdown in category innovation, with 17% fewer new product launches observed due to supply chain disruptions and a focus on core product ranges. This presents a risk of the FMCG sector becoming an ‘innovation desert,’ emphasising the need for both Private Labels and National Brands to prioritise innovation to drive organic growth.
“2024 marked a pivotal year for the FMCG industry, with private labels setting a new standard for growth and innovation,” Roy concluded. “Looking ahead, 2025 will be a defining year for both Private Labels and National Brands, as long-term success will hinge on their ability to innovate and connect with evolving consumer needs.
“The opportunity is open for all brands to differentiate themselves and deliver products that resonate with today’s value-driven consumers.”
Key highlights from the report:
- Own-label value sales grew by 9.4% across the EU6 markets, with the highest penetration in Spain (48%), Germany (43%), and the Netherlands (42%).
- Own-label achieved a 2.2% increase in volume sales, outpacing national brands, which saw a 3.8% decline in the same period.
- Baby food (+2.3pp) and pet non-food (+2.2pp) categories saw the most significant own-label growth.
- National brands relied heavily on promotions, with 43% of units sold on promotion in the UK, but still lagged in overall unit growth.
- 17% fewer new product launches were recorded, raising concerns about a slowdown in category innovation.
