The document discusses the increasing threat that private label brands pose to popular national and regional brands in the grocery category, especially for rice, in urban India. It notes that private label brands now have around 30% of the overall rice market share and 50% share in modern retail food stores. The document examines why private labels are becoming more popular with consumers and the strategies they are using to gain market share, such as identical packaging, innovative products and bundles. It also discusses the counterstrategies being used by popular brands and observations from the market on new product opportunities and trends that could be leveraged.

1. The Label War
January 2012
By: Kamal Kant Kanaujia

2. Note
• The following presentation refers to the current scenario
of brand war in MRF (majorly Grocery category) between the
National/Regional Brands Vs Private Label Brands
Referred as Popular
Referred as PL in this
Brands in this presentation
presentation
• The presentation is based on general observations, consumer
interaction and inputs from sales staff of respective stores.
• This presentation however may be useful for many products
but is made with perspective of Rice Industry.
Disclaimer: This presentation is an opinion based on market visit done in Delhi NCR in Dec’2011, the information is just for reference, actual
situation may vary since the report is not detailed. Decision making out of this opinion should be supported with comprehensive ground work.

3. Why People Go for Private Label?
• Sure-shot lower grocery bills
• Satisfaction of Packaged Food
• Brand equity of the retail chain is substantial
in consumer’s mind.

4. What is the threat to Popular Brands?
Alarming situation for Popular Brands
PL market share in Urban India:
30% Overall Rice Market
50% Share in MRF stores
It is interesting to know that the All India Rice Industry
leader’s Market share is only 15% in Urban India
Above information is as per Nielsen’s sales report last quarter 2011

5. What are popular brands doing right now?
• Doing Activations
• Hiring branding spaces
• Fighting for consumer’s
attention:
o Through colorful, attractive packaging
o Working out a USP
(which may not be of any use to the consumer)
o Offering schemes/ bundle offers
(which the consumer may avoid in the long run)
Question is…….which way is actually
effective????

6. Why do Private Labels Click?
• No big budget advertising.
• Simple and identical packaging for different
products.
Identical Packs
Jeera Khus Khus

7. PL are not dumb!!!!
Intelligent
They are rather smart….. brand name
forcing trial.
1. Practical packaging (Uniform packs for different products),
2. Intelligent packaging imitations(Color, Font, Design),
3. Intelligent brand names like:
Smart Choice, Premium Harvest, Nature’s Bounty, Select Range,
Value Range, Golden Harvest, Great Value,
4. Innovations:
Smart ways to bundle larger quantities, offering free gifts.
Bundle of 3 packs
with a free gift
container
Bundle pack of an
additional bottle
(Smart move only
one spray)

8. What remains the strategy of Private Labels?
• Ample display at Non Profitable sections (middle section of
aisles, which are usually not rented out)
- To be noted: Serious shopping happens in this area where the customer spends maximum
time noticing the product and finalizing purchase.
• Identical packaging (close copy of color/font/pack type): In
categories where customized packaging is imperative; eg.
Noodles, Ketchup, Detergents, Pickles, Biscuits, Namkeens,etc.
Contd……

9. Vermicelli
Noodles
Soups
The twin
brothers…
Detergent
Noodles

10. How are the retail chains cashing in on
popular brands?
• Though the presence of leading brands is important for
any store to draw footfall, the MR chains are taking
advantage of fierce competition by leaving out few
brands and charging premium from others.
• Various sites are rented out few of which are not even
fruitful.
• The popular brands put in a lot of effort in developing
attractive packaging and unique variants which is easily
copied by PL

11. Sometimes in the desperation
of visibility, few brands end up
getting displayed in an area
very far from the
category…..and they even pay
extra money for that!
Body Lotion displayed
in
Bakery/Confectionery
Section

12. Is rice also selling in private label
packaging?
NO

13. PL Rice is majorly sold loose in MRF

14. Except for Walmart (Easyday), who are offering
rice under their established brand: Great Value….

15. ….and also Big Bazaar, who are offering rice under fast
growing brand: Golden Harvest (PP & NW) (Cons. & Bulk)

16. Myths doing rounds in popular “Brand houses”
• PL is not purchased by my TG
• PL purchase is not consistent
• PL are not for people with decent budgets
• PL can not grow any bigger
• PL are not business builders for MR chains
• PL is not considered good quality
• PL is not profitable
• PL is not a BRAND
The reality lies in the above statements,
if we read them without “NOT”

17. Counter Strike 1 PL is not purchased by
my TG
• Anyone can buy PL, because when the consumer is
entering a particular Modern Retail Store he/she has a
certain level of trust for the Retail Chain, which often
makes the consumer indifferent while purchase of
certain items. Not to forget when the TG touch-point
for two products is the same the purchase can happen
for any of them.
• Most often these items fall under Grocery/FMCG
category where the cost is less and the consumer can
therefore choose the product with trial intention.

18. Counter Strike 2 PL purchase is not
consistent
• Repeat purchase depends on quality of the
product and not necessarily the brand name,
hence it is difficult to comment on repeat
purchase of PL till the time we are actually
sure about the product quality offered.

19. Counter Strike 3 PL are not for people
with decent budgets
• It is not the case always that PL is low priced,
in most of the items PL is priced at par with
the leading brand/s.

20. Counter Strike 4 PL can not grow any
bigger
• It has been observed that PL has covered basic
products(which are not offered under packaged goods such as:
Whole spices, Pulses, etc.) through basic packaging and
have introduced attractive packaging for products
which require fancy packaging(Noodles, Soups, Detergents,
Etc.)
• Thus it is clear that PL are establishing at a rapid
rate, have strategies in place and are here to stay

21. Counter Strike 5 PL are not business
builders for MR chains
• PL is gaining through Loss Leader policy;
branded products are offered at special prices
and similar products are offered at identical
price points under PL.

22. Counter Strike 6 PL is not considered good
quality
• Today PL is even offering separate ranges to
segregate consumer choice on the basis of
quality; such as “Select range”, “Value range”, etc.
• The name and the price points are the
differentiators of quality, i.e.
Select Range: High quality
Value Range: Regular Quality

23. Counter Strike 7 PL is not profitable
• The market share of all PLs taken together
doubles the share of Rice Category’s leading
brand, the infrastructure is not dedicated only
for PL, the packaging cost is low. It is difficult
to say under these circumstances that PL is
not profitable.

24. Counter Strike 8 PL is not a Brand
• PL are franchise of already established strong
brands.
• Old retail chains have established substantial
brand values across categories, and are hence
posing threat to popular brands.

25. Will the Popular Brands Vanish!!
NO
We are heading towards Catch 22 situation
Popular brands need MR chains &
MR chains need Popular brands

26. What should we learn from PL?
• PL are rapidly becoming a household name
because different products are offered under
single brand name.
• Packaging can be simple yet effective, and also it
should never come in the way of profitability.
• Focus has to be on those products where BRAND
VALUE matters, these are mostly proprietary
foods (which are unique).

27. Opportunities as evident from
Market Scene
One BIG learning is we should become a household
name, this is possible with diversification.
• Pulses are still untapped by branded market
• Whole spices have a very limited brands
• Olive Oil is growing big time
• Organic product offering is growing
• Large varieties of Biscuits being offered, more people are shifting to
healthy eating habits of which biscuits are becoming a vital part.
• Varieties of Tea is increasing
• Dry Fruits are majorly sold either loose or under PL
• Endless possibilities of Biscuits, Namkeens and Snacks variants.

28. Interesting observations
• Biryani Rice available in Spencer’s with colored
rice.
• Big Bazaar Offering different varieties:
Hyderbadi Biryani Rice, Chinese Biryani Rice, Pulao Rice, etc.
• Even kids have imbibed sales culture from their
parents: Heard one kid saying “Mummy aaj sale lagi hai
kya?”
• Elderly Couple discussing:
Uncle to Aunty: “Kya fark padta hai, sahi to dikh raha hai
khulla chawal he le lo” (Though aunty insisted on packaged rice)

29. Interesting Snapshots
Solution for Multi grain Atta

30. Interesting Snapshots
Separate counter for loose selling of Dry Fruits in Big Bazaar

31. Interesting Snapshots
Olive Oil is being heavily promoted and is also available in bulk packaging

32. Interesting Snapshots
Only Big Bazaar selling Ghee & Cooking Oil under PL

33. Interesting Snapshots
Spencer’s Noodles placed Non branded atta in Easyday
along Maggi

34. Interesting Snapshots

35. Interesting Snapshots
Neesa venturing into
ready to eat
curries and pulses

36. Interesting Snapshots
Bay breakers much more effective than
hiring gondolas, offer better visibility than
Endcap gondolas.
They are usually done in the middle of
regular shelves where the
Serious Shopping happens.