Retailers line up private-label launches in food products for Diwali

 Come Diwali and you can choose from a host of new soup, pasta, snacks and cereal breakfast brands at major retail stores. 

In a bid to make the most of consumers’ propensity to spend during the festival season, retailers are out to boost their private-label (in-house brand) portfolios, especially in the foods segment, and are lining up promotions over October and November.

Generally, private labels are 20-30% cheaper than mainstream branded products.

However, retailers are still able to make healthy margins on them, mainly because they do not have to spend separately on promotion and sales channel. 

The Future Group, which has in-house food products such as chips, noodles and breakfast cereals under the brand Tasty Treat, is starting a brand campaign —- Tasty Treat Khao Peo Mela —- across its Big Bazaar, Food Bazaar and KB’s Fair Price outlets next month.

“The idea is to celebrate the food offerings of our private brand Tasty Treat through in store marketing , sampling and activation to actively engage the consumer during the festival period,” Devendra Chawla, business head, private brand, Future Group Ltd said.
The group will also launch its range of pastas and jams during this period.

Chawla said the company is looking to derive 25-30% of its sales from private brands in foods, up from 22-23% now.

The contribution of private brands to sales is as high as 80% in categories such as apparels and the focus now is on growing the contribution of foods, he said.

K Raheja group promoted hypermarket chain.HyperCity will launch at least 25-30 private brands in foods (mithai, namkeen, 

savouries), non-foods and apparels in October, Ashutosh Chakradeo, head - buying, merchandising and supply chain, said.
Next year, when the company has at least 10-12 stores running, it will introduce an in-house brand in the electronics space, he said.

“At the company level, private labels contribute 20% to overall sales,” said Chakradeo.

Spencer’s Retail, the retail division of RPG Group, too, is going to launch new products in October under its FMCG brand Smart Choice. It will launch categories like breakfast cereals, soups and masalas.

Private labels account for 15-16% of Spencer’s sales, and the company is looking to increase this to 30% in a year.
Vineet Kapila, president, Spencer’s Retail had earlier told DNA Money the company was focused on private labels and that a separate team was working on expanding the private products in FMCG.

For Aditya Birla Retail, private-label products form 17% of sales with the foods category growing 50%. The company has brands like Feasters and Kitchen’s Promise in foods.Evidently, retailers are looking at foods as a category that can fuel growth.

Each retailer is thus introducing in-house brand offerings in breakfast cereals, soups, noodles, pastas, sauces and other processed foods, which are cheaper than products of FMCG companies.