Canvassing 1,460 consumers, Mintel reported that growth in sales of the three main tiers of own label products, value, standard and premium, looked likely to increase in the coming year.
A quarter of adults had switched to buying more own label products instead of brands in 2011. One in three consumers expected to either increase their use of value own label products or consider buying them for the first time. More than a quarter of shoppers canvassed expected to buy more premium own label products in 2012 and 16% aimed to increase their use of standard own label products.
Overall more consumers expected to increase their purchase of standard and value own label food and drink than expected to buy more branded products.
Consumer perception improving
In tandem with the swell of interest, Mintel said consumer perception of own label products was also improving. More than half of the shoppers who currently buy own label products both thought they tasted better than they used to and thought they tasted better than branded equivalents.
As a result Mintel predicted that own label food and drink would put increased pressure on the brands in the year ahead. “Further economising remains on the cards for consumers’ food budgets,” said the company.
“The rising price of food is a really emotive subject for shoppers at the moment,” Chris Wisson, senior food analyst at Mintel, told FoodNavigator. “People scrutinise the prices of products much more. Companies increasing prices of products run the risk of disillusioning consumers .”
Pressurise brands
Responses indicated that three quarters of consumers expected branded products to cost more than own label versions and Wisson said this too would pressurise brands in the current climate. “They are going to have to do more and more to justify the price premium.”
In terms of sales, own label cakes were performing particularly strongly, said Wisson.
Branded product purchasing still overtook own label purchases in 2011, but own label sales were not far behind according to the research. 89% of consumers reported buying branded products, versus 80% for standard own label products, 71% for premium own label and 69% for value own label.
Own label development overtakes brands
One indication that the food industry expected consumer interest in own label to continue was that product development in the area had overtaken product development in branded food categories. 54% of new product development had taken place for own label products, against 46% for branded products.
Own label cakes were performing particularly strongly, said Wisson.
However, it was not all doom and gloom for branded food and drink. Some branded categories were strongly outperforming own label food and drink, such as chocolate confectionery.
Mintel predicts the own label market will grow from £37.4bn (€46.8bn) in 2011 to £45.8bn (€57.3bn) in 2016. However, it said growth had been somewhat dampened by branded products fighting back.