Private Label Premiumisation in Tissue and Hygiene: Balancing Quality and Price

Private label tissue and hygiene products have captured a significant share of sales across Western Europe and North America, and are seeing growth in developing markets. This analysis looks at private label strategies in the developed world, focusing on premiumisation through the adoption of the latest technologies, green practices, branding and packaging. It also assesses private label opportunities in emerging markets, where modern retail growth enables the evolution of store brands.

Developed markets are the leaders

Private label is well entrenched in North America and Western Europe. It strengthened further following the economic downturn, as disposable incomes were hit and middle class households saw a decline in spending power.

Discounters spread the gospel of private label

The discounter channel has shaken up retail across Western Europe, further pushing private label across tissue and hygiene products. Leading discounters like Aldi and Lidl bring to the market not only competitive pricing but also the latest technologies to support their lines of disposable hygiene (such as Drylock technologies in nappies/diapers) and consumer tissue.

Balancing quality and Price

Private label products must balance price and quality. While competitive pricing is important to consumers, private label products must work well too. It is particularly important in disposable hygiene products. As Amazon’s private label nappy/diaper failure in the US suggests, low price alone is not enough.

Premiumisation is the new frontier

Premiumisation is at the core of current private label trends to ensure competitiveness with the leading branded products. A key component of this is new technology to stay ahead of the game, rather than merely following in the brands’ footsteps, products with environmentally friendly claims as well as more traditional forms, such as rebranding and improved visual appeal.

Developing markets come with challenges and opportunities

The growth of modern retail in developing markets enables private label development and can help to drive consumption by offering more affordable good quality products to consumers beyond wealthy households. However, the strong preference for branded and imported products can pose a challenge in markets like China, a key growth market for global tissue and hygiene.

Source: Euromonitor

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