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Saturday, October 24, 2020

Is Covid-19 a boon for Private Labels and White Labels? Bobby Raymond, Strategic Account Director, Trace One shares his views

How has Covid-19 changed overall shopper sentiment towards leading brands in lieu of disrupted supply chain?
Initially, it was the availability of a product that made the difference and retailers who had a large private label portfolio were able to manage easier their supply chain with their preferred suppliers. Nevertheless, everywhere the supply chains have been disrupted given the organization (to be reviewed) of suppliers during this period.
Secondly, consumers also began to consume very locally and sometimes by buying directly from the producer.

Has the Private Label or White Label or Local Brands being able to create a dent in market share of category leaders? If Yes was it price or was it availability lead?
For more than ten years now, private label brands have grown faster than national brands. This is due to a constant improvement in the quality of private label products and to an extension of their product range: standard, premium, organic, etc.

In Europe, average private label represents 40% of product sales (46.6% in the UK)

So yes, private labels reduce the market shares of the leaders in the category. Quality, price, innovation and availability was the winning combination for retailers.

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Which are the major categories which may see a considerable consumer stickiness in post Covid era?
The Covid has raised awareness of the fragility of our consumption eco-system. There has been an increase in online shopping as part of the post Covid era and retailers that have been able to offer a wider range as part of the consumers weekly shop has been successful. Food has seen a rise in the private brand growth as a result of this with consumers, cooking more at home, local and also moving towards meal kits and cooking from scratch. As Private brands offer the competing quality and more innovation, this category will see more stickiness in the post Covid era.

How serious has the manufacturing got impacted during Covid era & what corrective measures have been taken by manufacturers to minimize the impact of contingency in future? (For manufacturers)
Initially, manufacturing was disrupted both due to consumer panic but also to new measures to be put in place for production (social distance, sanity protection, etc.). Then, manufacturers adapted and now they have the ability to anticipate because everyone has understood that this crisis is not over and others one could happen. This is the first time we have faced a global pandemic since a long time. Manufacturers have had to evaluate their risk to supply chain with speed and are adapting to ensure that this risk is mitigated in the future.

Is contract manufacturing in India matured enough to accept challenges posed by ever changing consumer expectations with respect to world class product innovations?
Changing consumer needs for innovative products, healthier alternatives and sustainable products will force the Indian Contract manufacturing to adapt. In addition to this, the political sentiment towards China that is getting traction, is making a number of large retailers, brand owners to look at alternative markets to move some of the production capacity – this would put India in a strong position pick up opportunities for the contract manufacturing.

How & where all do you think WOOB.in can help SME, MSMEs, institutions & retailers in India in current & post Covid Era?
Some of the areas where WOOB can help and lead:

  • Information
  • Education
  • Special webinar about Private label business
  • Education on market and consumer trends
  • Providing a trusted community
  • Expertise for the manufacturing community to innovate
  • Category Specific Information
  • Technology to collaborate
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