US vs Europe : Why Private-label Food and Beverages Sell Better Across the Pond?

private label food and beverages

Packaged food is increasingly turning from an option to the norm. With the United States alone generating more than $100 billion from the sale of private food & beverage products, this is perhaps one of the best times for private label food manufacturers to disrupt the market with healthy food and beverage options. But, to presume that the private label food and beverage market is expanding at the same rate in Europe and the US would be incorrect.

Commonplace vs. emerging trend : Europe vs. US

When it comes to the US, even though the quantum of sales seems quite impressive; the fact remains that as compared to Europe, the market here is still in its nascent stage. Europe is where the manufacturers of private label food and beverages are gaining a lot of visibility. One major reason behind the growing visibility of these products is that retailers in this region help manufacturers understand the changing habits and requirements of the customers – based on which private labels can revamp and reinvent their product offerings. This move also enables the manufacturers to gain access to larger shelf space in the supermarkets and thereby push their sales harder.

In America, on the other hand, despite impressive sales figures – a closer look will explain how the growth of private label food and beverages industry has been rather a stagnant one. The reasons behind this amazingly slow growth rate can be attributed to the intense competition among the brands which have made it quite tough for private labels to break free and grow independently. Clearly the private label manufacturers need to introspect on ways in which they can broaden their product offerings and build a strong customer base.

The European market is also different from the market in the US when it comes to identifying the target customer base. For instance, the private label manufacturers here are very clear on which product caters to which age group – based on which they design their entire marketing and sales strategy. This clear-cut identification, as simple and straightforward as it might sound, plays a defining role in pushing the products across various platforms. Already, major retailers like Tesco, REWE, and Carrefour, have a huge offline presence in the form of brick and mortar stores. As these stores have a lot to offer in the food and beverage segment, a lot of consumers rely on the offline stores for their daily purchases.

Late to the party? How the US is consolidating its position

Although when compared to Europe, the growth trajectory in the US is rather slow, yet the US does hold a sizeable share in the global private label food and beverages market. And, as the online giant, Amazon, comes up with its own line of private label products, industry analysts expect the country to witness a more purposeful spike in the sale of these products. Though critics do not fail to point out that Amazon has been selling non-perishable items for a while now, and faces competition from industry majors like Target, the  move by Amazon is sure to play a major role in boosting the morale of the private label manufacturers.

The retail landscape in the US is also changing with the expansion of chains like Trader Joe and Aldi. Undoubtedly, the private label food and beverage market is witnessing a steady rise in the United States. How far will this growth result in the weaving of a success story? only time will tell.