Brand growth during a financial downturn
Following the last period of inflation and financial downturn, manufacturers were concerned about a lack of volume growth. However, our ‘Hot or Not’ insights showed that there had been significant opportunities for brand growth and real price increases as well as the category growth detailed in last week’s Pick of the Week.
Over the 5 years to 2012, there were significant opportunities for brand growth
During the period of inflation and financial downturn from 2008, despite the growth of private label, manufacturer brands gained significant volumes in many categories. Opportunities for growth always exist despite being held back by discounter development in some countries
A period of inflation and economic uncertainty does not mean that private label always outperforms brands
In many categories, especially in France and the UK, brands outpaced PL in the 5 years to 2012. In some countries brand share growth was constrained by the development at that time of discounters in Italy/NL and Mercadona in Spain
Premiumisation was achieved in many categories in the 5 years from 2007 despite inflation and recession
From 2007 to 2012, the prices paid by shoppers increased more than inflation in nearly one third of categories and by at least 10% more than inflation in one in 8 categories. The types of category included Coffee, Sauces, Snacks, Tonic Waters, Pasta and Margarine. Real value increases are achievable at these times