Private Brands Opportunity Anne-Francoise Ravalet, Senior Manager, Galileo International Business & Market Intelligence March 2015
Agenda Daymon Worldwide Overview Private Brand Evolution Global Private Brands Benefits to Supplier The Daymon Difference 2
3 Daymon Worldwide
To be recognized as the global leader in consumables retailing, by elevating the art and science of private brand building, experiential consumer marketing, and innovative retail-driven services. To deliver unique solutions to retailers and manufacturers so they achieve differentiation, drive profitable sales growth and win customer loyalty. Create quality brands and products of exceptional value that improve people s lives, and deliver outstanding services to our clients globally.
Our Global Retail Footprint Windows To The World
Our Global Retail Partners FINLAND UKRAINE CROATIA KAZAKHSTAN PANAMA
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Private Brand Development Category Analytics Sourcing & Procurement Collaborative / Joint Buying 1,700+ Brands and 165,000+ SKUs Globally! www.daymon.com
Marketing & Brand Strategy Design / Branding Insights Category Management Research / Analytics Award Winning Strategy & Marketing Agency! www.galileobranding.com
Import / Export Parallel Trading Supply Chain / Logistics International Sourcing Quality Assurance 6,000+ Global Manufacturers! www.omnigss.com
Smart Merchandising Dedicated Onsite Team Total Merchandising Management Efficient & Effective Business Solutions! www.sasretail.com
In-store marketing Outdoor events Shopper Insights Targeted Consumer Intercepts 3 Million Events Each Year! http://www.interactionsmarketing.com/
Your Global Retail Partner Key Services Summary Private Brand Strategy Private Brand Program Management Category Analytics and Insights Product Sourcing Supplier Development and Management Global Consumer and Retail Analytics and Insights Competitive and Opportunity White Space Analysis Custom Research Brand, Retail and Portfolio Strategy Brand Identity and Packaging Design Brand and Product Concept Development Consumer-Centric Solutions Development and Implementation Shopper Marketing Digital and Social Media Loyalty Platform Training and Education Parallel Trading Global Import Solutions Global Export Solutions International Sourcing Supply Chain Optimization Consolidation and Redistribution Global Distribution Logistics Management Market Trend Analysis Quality Assurance Retail Solutions / Innovation Total Store Remodeling New Store Setups Dedicated Retail Programs Large Scale Category Implementations Category Updates Audits and Product Recalls Display and Fixtures Assembly Online Reporting Store Mapping Warehouse and Logistics In-Store Product Sampling Coupon Concierge Taste Tests In-Store Brand Ambassadors Grand Openings In-Store Event Staffing In-Store Event Kits Guerilla Marketing Sampling Programs Mobile Tours Outdoor Brand Ambassadors Events Staffing Outdoor Event Kits Mystery Shopping Customer Intercepts
Our Our Full-Service Commercialization Approach 1 2 3 4 5
15 Private Brand Evolution
Private Brand History vate Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services.
Private Brand History e Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services. 1859 Eight O Clock Coffee
Private Brand History e Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services. 1859 Eight O Clock Coffee 1903 Red Label Tea Sainsbury s
Private Brand History e Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services. 1859 Eight O Clock Coffee 1903 Red Label Tea Sainsbury s 1970s White Label / No Name Revolutions
Private Brand History e Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services. 1859 Eight O Clock Coffee 1903 Red Label Tea Sainsbury s 1970s White Label / No Name Revolutions 1990s Private Labels
Private Brand History e Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services. 1859 Eight O Clock Coffee 1903 Red Label Tea Sainsbury s 1970s White Label / No Name Revolutions 1990s Private Labels 2006 Private Brands
Private Brand History e Brand Global Evolution Private brands have evolved from No-name copy-cats to trustable real brands. Today many retailers recognize that private label can be much more than a tool against manufacturer brands, it can be the reason for consumer loyalty, once they reinforce a message in the market: namely, that they are the source for high-quality, unique products and services. 1859 Eight O Clock Coffee 1903 Red Label Tea Sainsbury s 1970s White Label / No Name Revolutions 1990s Private Labels 2006 Private Brands Today Specialty Brands
Evolving Phases of PB Strategy MATURITY MODEL FOR ARCHITECTURE AND BRAND STRATEGY Brand building Segmentation Private Brand Penetration Multi- Tiers Value Time 24 Source: Canadean 2013
Economic Influences on Private Brands Consistent worldwide sentiment: the majority of consumers purchased more private label brands during economic downturn Yes No 38 38 39 40 40 39 % 62 62 61 60 60 61 Asia Pacific Latin America Middle East/ Africa/Pakistan Europe North America Global Average 25 Source: The Nielsen Company, Global Online Survey, Q3 2010
Economic Influences on Private Brands When the economy improves, virtually all consumers will continue to purchase private label brands Yes No 6 8 10 10 20 9 % 94 92 90 90 80 91 North America Europe Asia Pacific Latin America Middle East/ Africa/Pakistan Global Average 26 Source: The Nielsen Company, Global Online Survey, Q3 2010
Private Brand Potential 28 Source: The Nielsen Company, The State of Private Label Around the World, 2014
The Four Stage Private Brand Maturity Model et share Best Private Brands Lifestyle and Customer Specific Private Brands A Brands B Brands Good and Better Private Brands Value and Dicount Private Brands Value Multi-tiers Segmentation Brand building Source: Canadean 2013
30 Global Private Brands
Culture is Driving PB Growth PB BECOMING CULTURALLY ACCEPTABLE AND COOL 31
Trader Joe s FOOD PRODUCTS BECOMING PART OF CONSUMERS LIVES 32
CampMaster SOUTH AFRICA S NO. 1 CAMPING BRAND SINCE 1998 33
Decathlon INNOVATION IS AT THE HEART OF OUR BRAND, IT S PART OF OUR STATE OF MIND 34
Boots PRIVATE BRANDS ARE MARKET LEADERS WITH INTERNATIONAL ACCLAIM 35
36 Benefits to Suppliers
Benefits of Private Brands to Suppliers Excess capacity utilization and economies of scale Logistics synergies Increased sales volume Stable supply contracts Exposure to new markets Reinforce relationship with retailer Barrier to entry for competitor Focus on Product Development Absence Slotting Fees 37
Private Brand Manufacturers Large leading brand manufacturers utilizing their expertise and excess plant capacity to supply store brands; Small manufacturers that specialize in particular products or processes and concentrate on producing store brands almost exclusively (these companies are often owned by corporations that produce national brands); Major retailers and wholesalers that own their own manufacturing facilities and provide store brand products for themselves; Regional brand manufacturers that produce private label products for specific markets. 38
Benefits to Daymon Private Brands Suppliers Business prospecting within Daymon s network Supplier representation at retailer Top2Top meetings Commodity insights Cost structure tool Market/retailer intelligence support Tradeshow support New business support Knowledge Sharing Innovation Insights Consumer Trends 39
40 The Daymon Difference
Global Presence
Finger on the Pulse of Retail 2015 Retail Predictions Retail Gets Micro-Sized (Shifting Demographics) Retail gets Under the Microscope (One World) The Era of Hyper-focused Retail (You-niverse) Retail Breaks Rules to get Closer to the Consumer (JOYment) Retailers Create Wellness Ecosystems (B-Well) Services Come to the Forefront (always on) Balance of Power Shifts Globally (Money Matters)
Eye on the Horizon Identify white space opportunities in your platforms, categories, products Economic Social Political Drivers of Change Technological Industry Use macro trends to ladder up to key category insights (Build the Why ) Uniquely Daymon common vernacular Simple way to tell a story 7 Macro Trends Broad Movements that will last for longer periods of time 54 Focused Consumer Lifestyle/ Behaviors Micro Trends
TrendWheel in Action Daymon identified the global trend: B-Well, showcasing a consumer shift from reactive heath to pro-active wellness. At the same time, Daymon saw a local market trend in Japan for smoothies. Daymon analyzed the opportunity and developed smoothie products across categories for AEON TopValu, in collaboration with supplier partner, including the first shelf-stable smoothies in the Japanese market. Shelf-Stable Smoothies reached over 1.6M units sold and over $2M retail sales in the first 2 months after the launch. Has resulted in additional sales and profit to retailer and supplier partners, with no cannibalization within the sub-category.
Expansion within Existing Account Daymon identified the opportunity for Pingo Doce to be more profitable and competitive in the market with iced teas, particularly compared to Lidl. Daymon analyzed the market and identified the true market leader of iced teas in Portugal was not Lipton, but Lidl s private brand. Daymon relaunched the product in a 1.5L easy open package, with an attractive price, merchandised in display boxes and pallets. Pingo Doce became the market leader in Iced Teas, increasing sales from 4 million liters to over 30 million. Additional flavors and a diet range were subsequently introduced.
Expansion through New Product Development UK distributor SHS wanted to expand their private brand offering to Aldi with jelly, but was unable to find a viable manufacturer. Daymon supported SHS with sourcing assistance. Unable to find a suitable supplier currently manufacturing the jelly, Daymon investigated the requirements and processes needed to develop the product, and found a supplier who had the capability and flexibility to supply, but not the know-how or experience with the product. Daymon coached them on the processes, certifications and investments necessary to supply the UK market. Through Daymon s diligence in sourcing and new product development SHS gained the business with Aldi and the manufacturer anticipates annual sales of 1 million with 3 jelly SKUs.
Expansion into New Brands Daymon was approached by a supplier to develop a brand to enter Venezuela. Daymon s Omni Global Sourcing Solutions provided a market analysis, entrance strategy, managed the design process as well as logistics. With Daymon s help the supplier gained over $3.5 million in additional revenue, in 1 SKU alone!
Expansion into New Market Daymon was challenged to develop the first Private Brand in Angola with Kero hypermarkets. Every aspect of the brand and portfolio was to be developed from scratch. Daymon leveraged our supplier database to provide a turnkey solution for product development (sourcing, negotiation, QA, packaging) guaranteeing daily management of the launch and activation. Daymon helped Kero become the first PB player in the market, democratizing FMCG in the country and providing unique differentiation for the retailer. The initial launch of over 200 SKUs gained high acceptance and reached historic levels of penetration with a limited number of stores. An additional 600 SKUs are currently in development.
Expansion with Daymon Partners A market opportunity was identified for Portuguese wines in Japan. Daymon leveraged our relationship with Wine with Spirit to facilitate the introduction to Aeon in Japan. Daymon assisted with market prospection, brand positioning and market segmentation analysis, adaptation of communication to local markets and additional marketing support. Wine With Spirit wines are currently being sold in Japan, Portugal, Poland, with negotiations pending for the Netherlands and Brazil. Daymon also partnered with WWS for a university study with HEC Paris, the findings of which have aided the company s entry into additional markets.
Key Takeaways PB has evolved significantly from being a price to a preference. Private Brand evolution is at different stages throughout the world, from entering new markets, disrupting existing markets to reorganizing for growth in developed markets. There are many strategies used when it comes to Private Brands. No matter which is used, the success of the program is heavily reliant on understanding the marketplace, the consumer, and responding to shopper needs. Part of the evolution of Private Brands is how much freedom it can provide to introducing new ideas to the market that consumers have never even thought of. As the industry is affected by Private Brands, all players must have a strong vision for how they choose to engage in order to stay relevant. Daymon is a key player in many global markets and would welcome the opportunity to help you grow your business. 51
Thank You Anne-Francoise Ravalet aravalet@daymon.com