The advance of the white label in supermarkets and the changes in consumption patterns are taking their toll on the big manufacturers. The share of the distributor’s products has reached records in the shelves of Spanish stores, with a share in the future of 2023 of 44% taking into account all categories, which is forcing groups with historic brands to close factories to concentrate the production and to fight very hard not to lose presence in stores.
This boom, driven by the inflation of the last two years and the public debate surrounding it, has reduced the sales volumes of some of the main consumer groups, such as Nestlé, which retreated by 0.6% in the first nine months of the year, although it grew in turnover due to the increase in prices, and has left unusual situations until now, which the most veterans of the sector had not witnessed before: the veto, profusely advertised, of some brands arguing that they are too expensive It happened with Pepsico at the beginning of this year, when Carrefour reported that it stopped marketing its products because of the prices, and this week it was Bimbo that lost its commercial presence in the country, specifically in Dia.
There has been no public fight here, but the historic mold bread of the Mexican multinational will no longer be found, for the time being, in these supermarkets in Spain. Sources in the sector attribute the decision to a lack of commercial agreement. Dia explains this due to the usual changes to the assortment of the distribution, which is “in constant evolution”. “Our relationship with Bimbo, as with other suppliers, is good”, they point out from Dia. The company insists that the manufacturer’s brand remains important in its case and accounts for more than 45% of its references. “We offer a wide range of our own products and manufacturer’s brands – they continue – and we give the customer the freedom to choose”.
It is not the only setback for Bimbo. The group is also preparing the closure of its plant in El Verger (Marina Alta), with almost a hundred workers, where it produces toasted bread and Takis snacks. The unions explain that the company justifies the measure due to the need to reorganize its production capacity in view of the drop in sales of these products.
Danone also points to a drop in sales volume in the decision to close the historic Parets del Vallès factory. Its volume in the first nine months of the last financial year decreased by 0.8%.
Molded bread, yoghurts, milk and preserves are some of the categories in which the white label equals or exceeds the manufacturer’s, confirm from the sector. Food inflation and an adjustment in the consumption basket, with a greater weight of the price factor and control of spending, have contributed to this rise. But there is also a supermarket strategy behind it to gain customer loyalty, say distribution sources. The chains promote products with their brand, with a good quality-price mix, because consumers will not be able to find them in the competition – only in Dia there are products of their brand, for example, while Bimbo bread is present in lots of supermarkets. The great increase in the white label, the same sources add, has taken place in chains in which the white label had almost no presence just two or three years ago.
Still, albeit slightly, the dealer brand is growing at all major chains despite increasing its average price more than the manufacturer’s brand, a recent Kantar report concludes. According to this report, Lidl, Mercadona and Aldi lead the ranking of supermarkets with the highest white label share – see graph. On the other side of the scale, El Corte Inglés, with only 15.3%.
“The consumer is sovereign in making purchasing decisions and we believe that both the manufacturer’s brand and that of the distributor can and must coexist to ensure fair competition in a free competition market”, they point out on this issue from the Spanish Federation of Food and Beverage Industries (Fiab), which calls for an expansion of food with VAT removed or reduced to encourage consumption.
