Private label frozen products are becoming increasingly innovative and are turning to design as a differentiating factor for competitive advantage and stand-out appeal, especially in Eastern European countries, such as Poland, according to research by Mintel. Added to this, consumer perception towards frozen food in Eastern Europe is slowly improving, with the help of producers’ initiatives, such as the Hungarian company Agrosprint, which are beginning to launch more health-conscious product lines.
Cheaper value retailers, discounters in particular, are enjoying increased footfall in Poland as consumers are becoming more and more price-savvy. Mintel’s research demonstrates that a significant proportion of Poles, when surveyed in the fourth quarter of 2014, had shifted to cheaper value retailers, with two in 10 reporting to having switched all of their grocery shopping and over three in 10 (34%) admitting to having switched some of their grocery shopping. This is more than what was stated by consumers from the other main continental European markets, i.e. France, Germany Italy and Spain.
Consequently, demand for private label groceries is on the rise. As well as the discounters, other major grocery retailers are also gradually expanding their own brand ranges at various price points. Tesco and Carrefour labels have been recognized as the most popular and most frequently purchased own brands in Poland, as reported in trade press. According to PLMA (the Private Label Manufacturers Association), private label accounted for an almost 25% volume share in the Polish food and drink market in 2013 compared to 23% registered in 2012. The share of private label is particularly high in frozen food, including frozen vegetables. PLMA’s data reveals that private label generated as high as 46% of retail volume sales in frozen vegetables in Poland throughout 2013.
Innovation in frozen vegetables is seen as a key growth driver
Polish consumers are increasingly time-strapped, seeking easy-to-prepare yet healthy meal solutions, with frozen vegetables adequately fulfilling the need by blending convenience with health credentials. Innovation has become an essential tool in stimulating demand and creating a point of difference for brands but also for private label. Between December 2011 and November 2012, private label accounted for 25% of all launches in frozen vegetables, whereas two years later the share has increased to 43%.
With the intensifying competition from private label, brands are looking to differentiate and add value, for example through the introduction of new processing types such as steamed vegetables from Bonduelle, as well as new product types such as organic bay bolete mushrooms from Danex. Another interesting tactic, which has already been applied in the Polish market, is the use of emotive positioning. For example, Frosta has designed a unique heart-shaped range in frozen spinach to enhance brand affinity and make cooking more enjoyable.
Honorata Jarocka, Food and Drink analys with Mintel says: “Private label products in the Polish frozen vegetable market are becoming increasingly innovative, therefore brands need to create added value to remain competitive. This could be achieved through the exploration of new processing types, new product varieties or fun features such as unusual product shapes. To create a unique identity, own brand manufacturers are looking beyond product quality and price, with packaging design drawing more attention. Fun and joyful designs could be used more often to engage with younger demographics and adventurous consumers.”
To read the full article, please click here