Private Label, Price Hikes Drive Sales in Europe

Despite fac­ing sig­nif­i­cant chal­lenges over the past few years regard­ing pro­duc­tion and prod­uct fraud (and more recently the eco­nomic fall­out from Britain depart­ing the European Union), olive oil sales fig­ures across Europe are still on the rise.

According to research by ana­lyt­ics firm IRI, these fig­ures can be attrib­uted to sales of pri­vate label olive oil brands – as well as gen­eral price increases across the board.

Private label trade has con­tributed sig­nif­i­cantly to the €6.9 mil­lion ($7.49 mil­lion) increase in olive oil sales in Western Europe over the past twelve months.

Private label olive oil is any olive oil that has been man­u­fac­tured by a third party and then sold under a retailer’s brand name, and pri­vate label olive oil sales (and dis­count chan­nel brands) have risen in promi­nence across the major European super­mar­kets and hyper­mar­kets in Spain, Italy, Netherlands, Germany, UK, Greece and France.

IRI esti­mated that the UK expe­ri­enced a 5 per­cent increase in demand and vol­ume sales, while Germany saw a demand increase of 10.8 per­cent. A notable excep­tion occurred in Greece, where retailer Marinopoulos filed for bank­ruptcy, pulling its pop­u­lar pri­vate label range off the mar­ket, forc­ing con­sumers to seek alter­na­tive brands.

Consumer shop­ping data has demon­strated in the past that when the cost of raw mate­ri­als for cer­tain sta­ple prod­ucts increases, shop­pers will choose the best price option.

The increase in pop­u­lar­ity of pri­vate label items comes after last year’s find­ings by the same orga­ni­za­tion that pri­vate label prod­uct sales in Europe were stag­nant or declin­ing across the board.

But the recent resur­gence of pri­vate label brands could indi­cate a change in the land­scape, and IRI pre­dicts that pri­vate label brands will retain their new­found com­pet­i­tive edge through dif­fer­en­ti­a­tion on qual­i­ties other than pric­ing, through prod­uct port­fo­lio exten­sions and addi­tional pro­mo­tional activ­i­ties.

While the growth in pri­vate label has led to greater over­all sales, price increases are also respon­si­ble. Poor weather con­di­tions over the past few har­vests have cre­ated prob­lems for Europe’s biggest olive pro­duc­ers, decreas­ing yields and increas­ing the demand for what lit­tle there is to go around. Spain recently expe­ri­enced its worst olive har­vest in two decades, while Italy has had to cull over a mil­lion olive trees due to the deadly Xylella fas­tidiosa bac­te­r­ial out­breaks.

• IRI Worldwide


• The Telegraph