Private label offers growth opportunity

Private label offers growth opportunity

Retailers that provide distinctive value-for-money products will benefit from significant opportunities to grow private label sales in India, a panel of industry experts told the seventh annual Food & Grocery Forum India.

Speaking at the Forum, Food Bazaar's chief executive Devendra Chawla suggested that the majority of categories are under-penetrated by private label products in India. As a result, Chawla argued that there is room to grow sales by launching new private label lines and entering new categories.

Snack group Nuts 'n' Spices hopes to capitalise on this room for growth by expanding its own label product offering. Founder Sunil Sanklecha said private label sales now account for one-third of group sales. The company, which offers private label nuts, spices and healthy snacks, recently launched fresh cottage cheese in the test market of Chennai, Sanklecha revealed.

As companies expand into new areas of the private label market, they should leverage the opportunity presented at the premium end of the space, Murli Krishnan, CEO of bakery-to-dairy group Nilgiris Dairy Farm Pvt, suggested. Successful private labels must provide something special to avoid becoming "part of the clutter". The company has met success with high-end own-label products, Krishnan suggested. When introducing sesame oils, for example, Nilgiris opted for cold-pressed oil and the group was therefore able to capture 25% south Indian sesame oil sales.

Retailer HyperCITY has also worked to develop a premium private label offering, Darshana Shah, senior vice president, marketing & visual merchandising for retail group stressed. HyperCITY has adapted the model of Britain's high-end retailer Waitrose to create its own grocery label Everyday and Fresh Basket for baked goods.

Shah added that the development of its private label offering has enabled it to build customer loyalty. "Private labels create stickiness with customers that generate repeat purchases," she added.