Private Labels are all about innovation!

 Xavier Terlet, (President of  XTC world innovation), 12/2015

Alouette. In 1976, that was the code name for the most secretive master plan launched by French retail giant Carrefour’s directors, who were about to revolutionize distribution and production. At first, the Produits Libres line of discount staples, and the no-name and house-brand products, were nothing more than carbon copies of the originals, stripped of any added value. Chocolate simply called “chocolate” and coffee branded as “coffee” were immediately belittled by the big brands and instantly copied by every competitor. These products were a godsend to the few farsighted SMEs that dared to jump on the idea (Cémoi, Senoble, etc.).

In the frenzied dash to copy everyone else, the brands quickly lost sight of the whole point of Private Labels: differentiation. “No one else, anywhere, makes this product,” is a claim few brands can make these days. Yet that was exactly what made Picard the frozen foods king it is today!

Of course, the resulting added value (meaning innovation) have guided our brands for the past 20 years, though to be honest, more so in the United Kingdom than in France. That being said, it’s important to note that this added value was completely devoid of originality. Every brand has or has had its “home-grown tradition” product range, its “health/fitness” range, its “exotic,” “organic” or “snacks” product line. Today, although each one is being fine-tuned (gluten-free, vegetarian-friendly, etc.), not a single one stands out. In fact, the same suppliers are oftentimes behind all of them.

The economic downturn of 2009 slammed the brakes on growth in PL innovation. Marketing teams across the board simply shelved their innovation and differentiation plans to refocus their efforts on safe bets (popular items) and left innovation to the manufacturers, which quickly adapted to the task.

After losing too much market share, this strategy has lived long past its best-before date, given that evolving consumer demands require a permanent renewal of the offer. Today, most brands are clearly taking innovation seriously. Of course, copying the successful national brands is a strategy that lives on and will likely never die. However, Innoscope PL 2016 unveils some real house-brand positioning strategies, some new categories being pre-empted, and some breakthrough innovations that embody the notion of thinking outside the box.

There’s still a lot of work to be done in terms of innovation, especially with respect to certain consumer needs, where PL products seem more legitimate and appealing than national brands.

Because after all, Private Label products are definitely about innovation.