Share of private lables to double in modern food retail: Rabobank

The share of private lables, which are the brands developed by retailers themselves, in modern food retail in India will more than double in the next seven years, said a new study. 

 

The share of private labels in India’s modern food retail will grow from 4.5% now to 10.5% by 2020, said a study by Rabobank.

 

Overall, private labels accounts for 0.3% market share of the total Indian food and grocery market, said Rabobank.

 

Private lables in honey, noodles and jams have grown the highest between 2007-12.

 

“Honey has a dominant share of private label in India. This segment is dominated by a single A-brand without any strong B-brands, whereas a category such as biscuits, with a few A-brands and a number of small regional brands, has an insignificant private-label share,” it said.

 

The staples category has the largest share (30% to 50% across subcategories) of private label among national retailers. This is mainly due to low brand recognition in this segment and high price sensitivity. 

 

“Currently India’s modern retail market is relatively small (6.5% of total food retail), but all major national retailers such as Reliance Retail, Aditya Birla Retail and Bharti Retail, have private labels in food categories so we see significant growth potential,” said Asitava Sen, head of food and agri business research, India, Rabobank International.

 

“ Where it took private label 50 years to achieve current levels of penetration in Europe (28%), Rabobank expects that countries such as China and India will reach this level within 15 to 20 years,” Sen said.