The ongoing Food and Grocery Forum India 2012 being held at Mumbai had an interesting session on private labels (PLs), where Ankur Bhasin Associate Director—Retail at Technopak asked the key questions: “How do consumers perceive PLs? Is a PL price-related? Why have some categories survived and some have vanished in PLs? How do different store formats impact PLs?”
He said one of the major trends being witnessed in PLs is their proliferation across the country with retailers. Rural consumption would in the coming years become at par with what is being currently seen in tier 1 and 2 cities. There would also be an emergence of distinct categories such as need-based categories and aspirational ones like gourmet foods. The former would include low involvement and offer high opportunities for retailers for their PLs.
According to the Technopak’s Private Label Report 2012, food and grocery segment is a key driver for PLs accounting for 20-25 percent, and sometimes even 40 percent, of all categories in PLs. The responsibility of retailers to PLs has risen significantly over the last few years.
Devendra Chawla, President, Food & FMCG, Future Group said that the Group has a different approach to PLs. “There is a huge opportunity for Indian retailers to build scale with PLs. We are a very unbranded country. Categories are yet to start in India. Our brands are independent brands such as Tasty Treat, and Clean Mate, which have survived on their own steam. “
Sumit Chandna, VP-Buying and Merchandising (FMCG) with Aditya Birla Retail, said: “We have a classical retailer approach. We build on our brand equity, and we do it across all categories. What is important is not the size of the store, but maintaining consistency of supply, though it cannot be denied that a large-store format will have the space to showcase more categories including private labels.”
Vaibhav Tembulkar, Trading Head, FMCG (Non-Food) with Hypercity, said: “As consumers welcome more and more PLs, retailers too want to launch such brands. But we have to give value for money, that is, we have to get quality as well as the price equation right.”