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11 August 2005
Schaumburg, IL
Private label products have come a long way since the days of generics that offered poor quality and bland packaging. Today, more than two-thirds of global consumers consider private label products to be a “good alternative” to other brands and an “extremely good value for the money;” while nearly as many believe such products offer quality that’s “at least as good as that of the usual big brands.” Those are among the results of a new global consumer survey by ACNielsen, the world’s leading provider of consumer and marketplace information.
The ACNielsen online study, which polled consumers in 38 markets, found that Americans, in particular, have embraced private label products.
| Thinking about private label brands, how much do you agree or disagree with the following statements: |
Percentage that agree “slightly” or “strongly” |
U.S. Respondents |
Global Respondents |
| Private label brands are a good alternative to other brands |
77% |
68% |
| I don’t think private label brands are suitable for products where quality really matters |
25% |
40% |
| Private label brands are usually an extremely good value for the money |
81% |
69% |
| Generally, private label brands seem to have very cheap looking packaging which puts me off buying them |
25% |
32% |
| They’re really meant for people who are on tight budgets and can’t afford the best brands |
19% |
34% |
| These days the quality of most private label brands is at least as good as that of the usual big brands |
72% |
62% |
| I just don’t know enough about these retailer brands to want to try them |
12% |
22% |
Source: ACNielsen Online Consumer Confidence Study
Consumer perceptions that private label brands are a good alternative to other brands are most prevalent in the highly developed private label regions of Europe (78%), the Pacific (78%), and North America (77%). This compares to 64% of Latin Americans and 51% of consumers in Asia.
Across the 38 markets, all of the top 10 that rated private label products a good alternative to other brands hail from Europe, led by the Netherlands (91%), Portugal (89%) and Germany (88%).
At the other end of the scale, eight of the bottom 10 markets hail from Asia, with Japanese (35%) and Malaysian consumers (36%) least likely to agree that private label brands are a good alternative to other brands.
“Private label awareness and acceptance in Asia and other developing markets will, in part, go hand in hand with the growth of modern trade in these areas. In some, where the retail landscape is highly fragmented, a lot of shoppers are only just getting used to visiting supermarkets and hypermarkets regularly for their groceries, and private label is still a relatively new concept for them,” said Tom Markert, ACNielsen chief marketing and client service officer.
Good Value for Money; Quality on Par with the Big Brands
Across the regions, consumers in the Pacific and North America (both at 81%) were most likely to rate private label brands an extremely good value for the money. They also agreed on quality, with 72% in North America and 70% in the Pacific considering private label quality to be “at least as good as the usual big brands.” Europe followed closely behind with 73% agreeing on value for money and 68% on quality. In Latin America, 67% of consumers rated private label an extremely good value and 64% deemed the quality of such products to be on a par with the big brands. Fifty-nine percent of Asian consumers agreed on the value of private label products; 49% agreed on quality.
Across individual markets, of those with the highest percentage of consumers rating private label to be an extremely good value for the money and offering quality that’s at least as good as that of the big brands, not surprisingly, seven of the top 10 were European countries. Those with the lowest percentage in agreement on value for the money were Thailand (25%) and Japan (27%). Markets with the fewest consumers giving private label high marks for quality included Taiwan (27%) and Poland (36%).
When Quality Really Counts, is Private Label Suitable?
When asked whether there are some products, especially “where quality really matters,” where private label is not suitable, a global average of 40% agreed, led by half of Latin Americans (51%) and Asians (48%). Even in highly private label-developed regions, two in five Pacific consumers (41%) agreed that there were certain products not suitable for private label. North Americans (27%) and Europeans (35%) were least likely to agree.
As for individual markets, 63% of consumers in Brazil, China and Malaysia agreed that when quality really matters private label is not suitable. Just 19% of shoppers in Spain and the Netherlands agreed.
Very Few Take Issue with the Packaging
As competition intensifies in-store, and the perceived quality gap narrows between private label and other brands, retailers appear to have ratcheted up the quality of their packaging. Just 32% of consumers globally agreed that private label products have cheap, off-putting packaging.
Across Europe, cheap packaging is certainly not an issue for retailers in Germany, Austria, Italy, Finland, and Switzerland, where less than 20% of consumers agree that private label packaging is cheap-looking. At the same time, there appears to be a packaging redesign opportunity for retailers in Latin America and Asia, where 40% and 38% of consumers respectively agreed that private label packaging was cheap-looking and off-putting. This was particularly felt in Malaysia (62%), Turkey (54%), the Philippines (50%), and Hong Kong (46%).
Is Private Label Just for the Budget-Conscious?
When asked if they thought private label products were “meant for people on tight budgets who can’t afford the best brands,” a global average of 34% agreed. Regionally, Asian consumers (46%) were most likely to agree with the statement while those in North America (20%) were least likely.
Heading the top 10 country ranking, consumers in Taiwan (73%), Malaysia (68%), Indonesia (65%), and the Philippines (60%) were most likely to feel that private label products were meant for people who can’t afford “the best brands.”
“Partly this could be attributed to a lack of understanding about retailer brands in many of these developing markets. In Malaysia and Taiwan for example, nearly half of respondents also agreed that they didn’t know enough about them to want to try them,” said Markert.
Those least likely to feel that private label brands are meant for people on tight budgets were consumers from Finland (14%), Sweden (15%), Germany (17%), the Netherlands (18%), and Italy (18%).
The findings come from the twice-yearly ACNielsen Online Consumer Confidence Survey, the largest global survey of its kind, which gauges consumers’ current confidence levels, spending habits/intentions and other topics of importance to the CPG industry. The survey, which took place in May, 2005 over the Internet, polled more than 21,100 respondents in 38 markets: Australia, Austria, Belgium, Brazil, Canada, Chile, China, Denmark, Finland, France, Germany, Greece, Hong Kong, India, Indonesia, Ireland, Italy, Japan, South Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, UK, USA. All markets had sample sizes of approximately 500, except for China, France, Germany, UK and USA, which had sample sizes of approximately 1000. The survey has a margin for error of plus or minus 3.3% to 4.4%.
To see an overview of the survey please visit http://www.acnielsen.com.
About ACNielsen
ACNielsen, a VNU business, is the world’s leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen’s market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.
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