While almost 60% of Australian FMCG marketers are already supplying some private label products, those that aren’t are planning to spend up on advertising to fight back against the rise of retailer’s own brands, according to a new survey from ACNielsen.
The survey, Retail Barometer looked at emerging trends in private label manufacturing and is hailed by ACNielsen as the first survey of its kind. It including interviews with more than 100 senior leaders from Australia’s top Australin FMCG manufacturers.
Fifty seven per cent of those surveyed said they were already supplying private label products to retailers, while the majority (71%) said that Australians would be attracted to premium private label products.
The survey comes as Australia’s major supermarket chains Woolworths and Coles Myer begin to introduce more aggressive private label strategies that will seen the amount of shelf space available to brand products squeezed.
The survey revealed a divergence of views on the best way for manufacturers to compete.
Non private label manufacturers indicated that one part of their strategy in the face of the increased competition would be a renewed focus on branding with the survey revealing the group were the most likely to increase their ad spend in the year ahead, while others said they would be looking for alternate channels to sell their products.
“There are those manufacturers who are embracing private label as an opportunity and transforming their manufacturing and business operations accordingly,” said ACNielsen Australia’s executive director retail, Justin Sargent.
“There are those that are concentrating on building well known consumer brands through increase ad expenditure to reinforce familiarity in consumers’ minds; and there are the smaller manufacturers who are increasingly trying to penetrate the alternative channels that are growing outside of grocery.”
The survey was conducted in April and collected responses from 104 senior leaders including CEOs, MDs, general managers, marketing directors, and sales directors, from 83 FMCG manufacturers.
