Point of No Return: Most manufacturer brands banished by store brands soon
McKinsey recently predicted that the large majority of consumers who switched to cheaper CPGs during the recession will not return to premium brands.
Furthermore, A.T. Kearney lately forecasted a “no return to normal”: B and C brands will struggle for survival while global market share of private label products will reach 65 percent by 2025.
Certainly, the downturn has fundamentally changed the behaviour of many consumers as well the proportion of power among retail and manufacturer (which hasn’t been balanced anymore, anyway).
In 2010, it will be exciting to see the different strategies applied by a) retailers to further develop their store brand equities and b) manufacturers to focus on their high-performing Brands (which either means to get rid of the others like Henkel announced today or to strengthen the business by developing strong private labels oneself, like Bahlsen has announced).
Against this background, trend #3 of the video below (top ten food trends 2010 by Food Channel; via Myprivatebrand) isn’t a big surprise.