Finns demand more from private label

“Surveys suggest consumers are increasingly interested in products which have an economy position..."

A rejuvenated private label market in Finland will address price concerns and demand for quality home-grown products, says Pasi Hannonen, senior research analyst at Euromonitor.

“Surveys suggest consumers are increasingly interested in products which have an economy position and are domestically and locally sourced. Consumers perceive home grown products as environmentally sound and healthy. They also want products that compete with mainstream prices,” Hannonen said.

A burgeoning private label market will also increase competitiveness and boost manufacturing both within Finland and within neighbouring countries.

“S Group is present in other markets other than Finland so this might mean that some Finnish products end up in neighbouring markets and likewise some private label manufacturers that are specialists in private label in other countries might end up in the Finnish market.”

In addition, S Group’s focus on domestic products will help increase the distribution network for small manufacturers.

“Small to medium-sized businesses now have the opportunity to produce private label products for large retailers. Making products for the Kotimaista series for example, means they will benefit from its extensive distribution network.”

Positive outlook

Private label packaged food currently accounts for 20% of sales in Finland, according to Euromonitor, compared to more than 30% in the UK and Germany and the west Europe-wide average of 25%.

Hannonen said Finland’s private label market has fallen behind its neighbours thanks to the dominance of two major retailers – S Group and Kesko – and the absence of competition from discount stores.

The entry of the likes of Lidl just over 10 years ago provoked a string of private label launches at the time but since then product introductions have slowed, with only Lidl itself bucking the trend.

“Lidl has dozens of private label brands at the moment and are growing all the time. In contrast, major retailers like S Group and Kesko haven’t launched any new label series for years and years.”

However an unstable global economy will drive sales as budget lines become even more attractive to consumers and will encourage further growth in the coming years, said Hannonen.

“I think it’s possible that within the next 10 years private label of packaged food will account for 25% of the market in Finland. This will depend on issues like the economy and the number of products launched - either way we are moving slowly in that direction.”

Rapid roll-out 

S Group’s Kotimaista brand is clearly inspired by consumer feedback regarding food provenance, quality and price, added Hannonen, although he is less enamored by the strategy of Kesko’s K-Menu.

“Out of the two I would say Kotimaista will be the more successful. The focus of K-Menu is too vague. It is difficult to associate it with basic everyday products and the name doesn’t offer any clues,” he said.

“Consumers will immediately know where they stand with Kotimaista. The provenance is implied by the name Koti, which means ‘home’ in English, so it is obvious to consumers that the product is locally produced. The packaging screams domestic.” 

S Group will unveil 200 new products over the next few months with a further 400 planned in the longer-term.

Meanwhile, S Group’s Rainbow brand will be positioned under K-Menu, which will also comprise 100’s of new products.

Related News

Only shoppers with limited purchasing power are increasing the proportion of private label items in their shop

French private label market stagnates

Manufacturers' push for better quality private label goods is paying off

Irish private label sector has ‘scope to grow further’

Private-label packaged food brands like Target's Archer Farms are increasingly popular with shoppers, gaining and maintaining share from big national brands.

Private-label foods are tops, according to 88% of consumers

Typhoo produces one million teabags an hour

Own-label deal to boost jobs at Typhoo

TreeHouse Foods strikes CAD $170m deal to buy Protenergy Natural Foods

TreeHouse Foods continues private label buying spree with CAD $170m deal to buy Protenergy Natural Foods

Private label growth: UK consumer data suggests private label trend is here to stay

Private label growth: UK consumer data suggests private label trend is here to stay

Powerful retail sector calls shots on confectionery pack formats to ensure products cater to consumers in their trade channel.

Retailers wear the trousers in candy packaging decisions – NCA editors

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.