The economic challenges to come in 2023 will make or break FMCG brands. If your range is to survive them, then you need to have the answer to one fundamental question: “Do your products genuinely give consumers and retailers value above own-label alternatives?” If they don’t, then they will disappear from convenience shelves and wholesale depots.

The race for own-label brands

Since Tesco took over Booker in 2017, resulting in the UK’s biggest supermarket having direct access into 50% of independent stores, multiples have raced to sell their own label through independent tills. Co-op products are now sold through 90% of Nisa’s 4,000 stores and will continue to sell through Costcutter until at least 2026 following a deal in 2020 with Bestway. Meanwhile, Tesco continues to invest in its Jacks lines through independents, despite closing its dedicated stores earlier this year.

Retailers have been quick to offer these lines and reap the rewards. While some have grumbled over their customers assuming they are stocking up from a supermarket down the road, for the majority these lines simply represent a good margin and cheap consumer prices, sold under a brand the whole supply chain can trust.

Paul Dobson MorrissonsOwn label is now the focus whichever channel the industry’s biggest players are utilising. Speaking at the Convenience Conference in September, the representatives from Morrisons – which provides own label to Spar, Iceland and Boots, said it clearest. “We see own label as crucial in our approach to super-fast grocery delivery. It’s not going to go away, but it will be tested in the coming months,” said wholesale director Paul Dobson.

“The key thing for us is that our brands and unique products are front and centre. After all, anyone can sell a bottle of Coke.”

Offering better value

As consumers face rising costs everywhere they turn, these macro trends align with the winds this own-label strategy is sailing. Insights from Lumina Intelligence revealed at the Convenience Conference showed consumer prices are up this quarter by 3.6%, while own-label products remain on average 49p cheaper than their branded counterparts.

Lumina Blonnie Whist“Convenience shoppers are either buying certain categories outside of c-stores or trading down to own label. We would now label 80% of shoppers as being ‘value-led’,” said insight director Blonnie Whist.

These stats mirrored insights shared by Google in a previous session, which revealed the rise in people searching for ‘why is inflation so high’, ‘how to manage bills’, ‘food banks near me’ and ‘will there be another recession’. For the first time in 10 years, there are more search queries containing the word ‘cheap’ vs the word ‘best’.

This is a wake-up call for brands. If shoppers aren’t looking for ‘best’ crisps, but instead ‘cheap’ crisps, then does the value of your name vs that of Co-op’s, Spar’s or Jack’s own label really stand apart? Is it worth the extra money? Does it drive loyalty in the same way as before?

Suppliers need to place standing out from own label at their centre of their strategies in the next year. What can your brands do that own label can’t? Is it partnerships and on-pack promotions? Can you offer special experiences or provide genuine innovation? Are you able to guarantee more margin? Once you have that in place, you need to make sure retailers understand and believe in it.

Convenience ConferenceRead more insights from the Convenience Conference: Why c-stores will keep winning in the home delivery market?