Can Household brands fight back against own label growth?

 15th Feb 2020

We’ve condensed the Grocers report on FMCG house-hold products into a 600-word, article for you to digest quickly on the go.

In household FMCG there is a ‘survival of the fittest scenario emerging’, as brands face increasingly strong competition from own-brand ranges.

Being a well-known brand is no longer enough reason for customers to make a purchase and brands are seeing this in their sales. Now buyers can get reasonable quality products at lower prices from own-brand ranges and discounters, brands will need explore avenues that will show their ranges to be superior.

Brands have aimed for this with a focus on influencer marketing, emphasis on premiumisation and focus on environmental and sustainability concerns.

Let’s take a condensed look at how big brands, challenger brands and own-brands have been competing…

Household brands saw a 2.5% decline last year and saw their space on the shelf narrowed to make way for challenger brands.

Own-label prices increased by 2.6% last year but are still the more cost-effective product and have uplifted prices less than branded labels, who have seen a 2.9% price increase.

Discounter stores are soaring, Aldi has seen a value increase of 11.8% and Lidl 15.6%.

In laundry, big brands; Persil, Ariel and Bold shed a combined £20m in Grocery Multiple stores, due mostly to a decreased footfall in these supermarkets.

Mark Winter, the commercial director of Astonish cleaning products, noted their highest sales are coming from Home Bargains and B&M, because they have the ‘highest footfall’.

Influencers…

Astonish is one of several brands who have fought back against own label with the use of influencer marketing, with campaigns collaborating with Mrs Hinch. Mrs Hinch is an influencer trusted by many consumers, with 60% of people aware of her saying they would make a purchase solely based on her endorsement. She’s been big business for brands, Asda set up a ‘Mrs Hinch Recommends’ section in their store, P&G saw success with a Mrs Hinch campaign endorsing some of their products such as Febreze.

Of course, not all brands are abale to get influencer backing – and with the uncertain nature of influencer marketing more generally (on the whole people are becoming less and less inclined to trust influencer endorsement), brands still need a way to justify their higher price.

‘Designing a communicative pack for the shelf is not enough anymore, nor is functional excellence.’

The Environment

One way for brands to incite customers to purchase at a higher price is to focus on environmental effect and sustainability.

Challenger brand, Ecover, had a value growth of 15.3% last year and is now the 8th biggest brand in its sector. Ecover and Method are the two largest ecobrands; Method’s detergent sales have shot up from £2.1 million to £16.2 mil. Their environmental focus help sets them apart for other labels.

These larger brands are paving the way for smaller ecobrands too, such as Ecoegg (an alternative to detergent and conditioner), and Cheeky Panda (a bamboo-based paper product brand secured in holland and Barrett, Boots, Superdrug and WH Smith).

Better-known brands are also following suit in taking an environmentally friendly edge. Dettol and Cif both introduced refill products with the aim of waste reduction. Cif also simply re-branded existing products into 100% recycled plastic packaging.

Premium

Some household brands are still outperforming own brand on the basis of their superior quality. Andrex toilet tissue, for example, is pushing its premiumisation, with its new ‘Skin Kind’ range which offers an innovated toilet paper with lotion in it. They also encouraged consumers to use their paper in conjunction with their washlets, to offer a superior clean. Cushelle have taken a similar approach, developing their ‘Ultra-quilted’ tissues.

Discounters are challenging the premium market however, with products somewhere in between luxury and saver, known as ‘discounter premium’.

Brands will have to continue to compete with own-brand and will only win growth by being ‘distinctive and superior’.

Read the full Grocer report here: https://www.thegrocer.co.uk/category-reports/the-household-evolution-household-products-category-report-2020/601493.article