Private label drives growth in organic and natural markets

By Katie Bird

- Last updated on GMT

Related tags Private label Germany Organic food Brand

Private label natural and organic products are gaining market share in Europe but far from stealing sales from established brands they are pushing the growth of the sector.

Consumers are often persuaded by private label natural and organic products as they can be considerably cheaper than their branded counterparts, and in Europe private label share of the market stands between 5 and 10 per cent, according to market researchers Organic Monitor.

Germany is the leader in this regard with a private label share of 10 per cent and world’s leading brand, Alverde, manufactured by DM drugstores.

Over one hundred products across all categories fall under this brand including colour cosmetics, hair styling products and skin care ranges and it is stocked in over 1,400 drugstores across Germany and Austria.

France’s private label share has grown considerably since 2007, according to Organic Monitor, and two of the country’s leading supermarkets Carrefour and Auchan have launched own label certified organic ranges.

Raise awareness of the sector

However, this growth in private label, although providing competition is not too serious a threat to the established brands, argued the market researchers.

Private labels benefit the market by making natural and organic products available in new channels, such as discounters, as well as raising awareness of the sector and bringing in new consumers who might try established brands at a later date, according to Organic Monitor.

In addition, consumers can often be particularly loyal to brands they know and like in this category.

“In spite of high product prices, high brand loyalty has prevented many of these established companies [such as Neal’s Yard and Weleda] from reporting negative growth in 2009,”​ said the company.

Some trading down has affected the sector, often due to lower traffic in the more expensive speciality retail outlets that stock such brands, but the organic health and beauty sector has proved to be more robust than that of organic food.

More information on this topic will be given at an event organised by Organic Monitor in Frankfurt on November 16 and 17. For more information please click here​.

Related topics Market Trends Naturals and organics

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