How Private Labels Are Stealing Market Share from FMCG Brands

In the fiercely competitive world of FMCG (Fast Moving Consumer Goods), private label products—also known as “own brands”—are no longer the generic, low-cost alternatives of the past. Retailers are elevating their game, investing in branding, quality, and innovation to compete directly with household FMCG names.

This shift presents a critical challenge for marketing and sales managers: your biggest competitor might not be another brand, but the retailer itself.

Walking down the aisle in Coles, this is becoming clearer and clearer. Just look at what they are doing with the packaging to present their home brand as high end and worthy, and shake off any low end or economy stigma of the idea of buying home brand in the mind of the consumer.

The Evolution of Private Labels

Private labels are evolving in three significant ways that demand attention:

Refined Brand Identities

Gone are the days of basic packaging and generic names. Today’s private labels boast sleek, market-researched branding strategies. They’re positioning themselves as equal—or even superior—to established FMCG brands, often without co-branding or endorsements from the parent organization.

Improved Quality and Product Range

Retailers are diversifying their private label offerings, from organic and sustainable options to gourmet and niche products. This strategy not only attracts a wider customer base but also reinforces the perception of quality on par with leading brands.

Premium Pricing with Strategic Discounts

Private labels are embracing higher price points, but they counterbalance this with frequent and deep discounts. This pricing strategy builds customer trust while maintaining margins.

Why This Trend Should Concern FMCG Sales Managers

For years, FMCG brands relied on strong retailer relationships to ensure shelf space and customer loyalty. But private labels are a stark reminder that retailers’ customers are not your customers.

By positioning their private labels as viable alternatives—or even superior choices—retailers are shifting customer loyalty away from established brands.

The Slow-Then-Sudden Shift

These changes may not feel threatening today, but such trends tend to evolve gradually before reaching a tipping point. When that happens, FMCG brands may find themselves fighting for market share against the very retailers they rely on.

What FMCG Sales and Marketing Managers Can Do

Prioritize Differentiation

Highlight your brand’s unique value proposition through storytelling, sustainability, and innovations that resonate with your audience.

Invest in Data Analytics

Use retailer sales data to identify trends and understand consumer preferences. This insight can help you adjust your product lineup or marketing strategies to stay ahead.

Collaborate with Retailers

Build mutually beneficial partnerships with retailers by offering exclusive product lines or co-branded campaigns.

Strengthen Brand Loyalty

Direct-to-consumer (DTC) strategies, loyalty programs, and personalized marketing can create a deeper connection with your audience and reduce dependency on retailer shelf space.

The rise of private labels is more than just a passing trend—it’s a fundamental shift in the FMCG landscape. By staying proactive, understanding market dynamics, and building stronger connections with your customers, your brand can weather the storm and thrive in an increasingly competitive space.

Everything I write about is my own opinion or things I’ve either researched, taken a picture of, seen news about, and want to share. Let’s keep the conversation going, post a comment below.

Leave a Reply

Your email address will not be published. Required fields are marked *

All fields marked with * must be filled.
Please enter a valid email.