New report finds private label goods have an almost 40% market share

Private label lines are driving a significant transformation in the FMCG) sector across Europe, according to researchers Circana’s latest report.

It highlights how such lines have capitalised on shifting consumer behaviours, offering “affordable, high-quality products that meet evolving demands for health, sustainability, and value.”

Despite intense inflationary pressures these ines achieved a 9.4% growth in value sales and a 2.2% increase in volume sales across the largest six European markets (France, Germany, Italy, Netherlands, Spain, and the UK) as of March 2024.

Ananda Roy, senior vice president of thought leadership at Circana, said: “Private Labels have redefined the competitive landscape, not just by offering lower prices but by consistently delivering quality, innovation, and sustainability. Their success underscores a broader consumer shift towards brands that align with their values, particularly in health-conscious and eco-friendly categories.”

The report reveals that categories such as chilled and fresh, household and personal care have seen the highest penetration, with notable gains also in baby food (+2.3pp) and pet non-food (+2.2pp).

Continued growth momentum is forecasted for private labels, driven by investments in range expansion, premiumisation and sustainability initiatives. Consumer preferences for health, wellness and ethical consumption will continue to influence purchasing decisions, reinforcing the importance of aligning product offerings with these values, it says.

However, Circana also warns of a slowdown in category innovation, with 17% fewer new product launches observed due to supply chain disruptions and a focus on core product ranges. This presents a risk of the FMCG sector becoming an ‘innovation desert,’ emphasising the need for both private labels and national brands to prioritise innovation to drive organic growth.

Roy concluded: “2024 marked a pivotal year for the FMCG industry, with private labels setting a new standard for growth and innovation. Looking ahead, long-term success will hinge on private labels’ ability to innovate and connect with evolving consumer needs. The opportunity is open for all brands to differentiate themselves and deliver products that resonate with today’s value-driven consumers.”

You can read the full report here.