“Generally, as expected, private labels had a better evolution than usual brands. Private labels had a positive evolution on the segment of carbonated drinks last year, mainly owing to the huge price gap against dominant premium brands,” explains Angela Wynne, an analyst with Canadean company, the market research company that provided ZF with the data related to the weight of private labels in the overall soft drinks market.
Private labels such as Clever (Billa) or K-Classic (Kaufland) have put pressure on established brands part of the portfolio of some giants such as Coca-Cola HBC and PepsiCo, which registered declining volumes also because of the rivals whose prices are even as much as 4-5 times lower.
While private labels gained ground in Romanians’ preferences owing to the lower price, brands part of Coca-Cola and PepsiCo portfolio coped with falling sales volumes.
Soft drinks consumption followed a downward trend during the crisis, so that from consumption per capita of around 150 liters in 2008, Romanians came to consume on average around 135 liters per capita last year, down 10%, according to ZF calculations based on Canadean data.
Angela Wyne says some players usually team up with retailers for private label bottling.
The private labels that boasted solid performances on the soft drinks segment last year included Clever, belonging to Billa retailer, and K-Classic, of Kaufland. Carrefour’s private label also had a good year, according to Canadean analyst.
An established brand is up to five times more expensive than a private label.
“Private labels can become more appealing even for the bottlers of the top three brands on certain drinks categories,” says Angela Wyne.
The sales decline prompted the biggest players on the market to change their strategy in a bid to attract more clients.
PepsiCo bottler came up with new product ranges, as well as with promotions. On the other hand, beside usual promotions, rival Coca-Cola HBC started promoting traditional retail, after German retailer Kaufland confirmed it no longer sells in Romania the products part of Coca-Cola portfolio, expect the 2.5-liter Coca-Cola. According to ZF estimates, traditional retail covers at least half of Coca-Cola’s receipts in Romania.
(English version by Catalina Apostoiu)