PLMA Unveils Roundtable Report

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August 31, 2010

The Private Label Manufacturers Association just released “Store Brands 2010: Post-Recession Strategies for Private Label,” a report stemming from a special industry roundtable it hosted last fall at its annual trade show.

The focus of the roundtable –– comprised exclusively of private label manufacturers –– was to discuss and outlined winning strategies to retain recent private label market share gains, and ensure future stability and growth.

“Acknowledging that the tailwind in sales gains provided by the economic downturn will eventually end, the PLMA Roundtable panel nevertheless saw significant potential for store brands ahead and outlined a set of industry challenges for the new era that began in 2010,” PLMA wrote in the report.

The following are the top 10 private label challenges outlined in the report:

• All elements of the U.S. private label industry should gird for increased competition from national brands.
• To effectively stave off the national brand challenge that is sure to come, store brands marketers –– suppliers as well as retailers ––must double down on product development and innovation. 
• In the near term, the biggest threat to national brands is ….SKU rationalization by the country's chains. There may be upwards of 20 percent fewer products on store shelves as a result. This would diminish consumer options, but also present an important crossroads opportunity for retailers to differentiate themselves by emphasizing their own brands.
• National brands and private label suppliers will be contending with the same challenges due to a tougher new retailer stance. 
• At the same time, all marketers must guard against the shrinking category. A receding tide lowers all boats, and that includes private label.
• Private label suppliers and retailers must get on the same page with respect to their partnerships. Retailers are still reluctant to forge long-term commitments with private label suppliers; suppliers are tired of bidding out two-year contracts only to see it disappear.
• Private label manufacturers are ready to meet the challenge of innovation but are powerless without the full support of the retailers. 
• Store brand suppliers have never been better positioned to compete. The last few years have been good for suppliers; they have come far, exuding a new confidence. 
• Store brand suppliers will be required to make many hard decisions. Manufacturers should learn to say thank you, but no to certain would-be clients and to scorecard all potential retail customers to determine a profitable, right-sized fit. 
• Transparency on both sides should be the new mantra for private label supplier/retailer relationships.

For a copy of the full report, request a copy at the Store Brands Decisions’ Research Center.

Read These Related Articles:

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• GfK: Slow Economic Recovery Underscores Continued Store Brand Growth
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