THE SLEEPING GIANT AWAKES
The rise of private label tea and coffee in the UK
Words: Rebecca Coath
UK consumers are responding to rising food prices by switching from brands to own label. This offers retailers an opportunity to differentiate, deliver competitive pricing, and build customer loyalty. To capitalize, they must focus continually on innovation and quality and by placing consumer needs at the heart of everything they do.
With consumers facing mounting food bills, the role of retailer brands is becoming more important… and not just for the cost-conscious consumer.
In a recent study, 93% of UK consumers now buy own-label, and over a third say they are as good as the branded product equivalent, just cheaper [NIQ]. Brand loyalty is weakening with brand losses at over £258m in 2023, helping both value and premium own-label gain momentum.
Own-label allows supermarkets to differentiate, offer competitive pricing, and build customer loyalty. Tesco, the UK’s largest retailer, recently announced that their top-tier Finest ‘brand’ has grown to be worth £1.7bn, making it one of the biggest brands in the UK, with consumers attracted by improved choice, price and trusted quality.
Tea and coffee, as staple everyday products, are leading the way in ambient grocery, as consumers continue to switch from heritage brands into retail own-brands. 63% of ground coffee sold in retail is own-label – an 11-year high – while own- label mainstream tea sales share is at an all-time record high.
This trend looks to continue as consumer perception of own label improves. The key to capitalising on this trend is for retailers and brand owners to understand what is needed next to appeal to these consumers, through a relentless focus on innovation and quality with the consumer need states at the heart of everything they do.
It’s no exaggeration to describe the performance of own-label across the UK retail market as the awakening of a sleeping giant. But this is just the start of the retail revolution, as the cost-of-living crisis persists and shoppers adapt their habits to navigate rising prices.
The need to satisfy consumer demand for perceived ‘value’ has never been more important, and as such, own-label launches are already capitalizing on premium trends in food and drink. At Finlays, we pride ourselves in our ability not only to identify future trends, but to marry them with a clear sustainability and innovation agenda. The key, as ever, is to join forces with an expert partner who can help you stay ahead of the curve and tap into the extremely exciting opportunities within the own-label beverage space.
Rebecca Coath
Category Manager, Finlay Beverages rebecca.coath@finlays.net
Contact Finlay Beverages about its private label offering for the UK
