Private labels strengthen their position with almost 40% market share, redefining FMCG through quality and innovation, reports Circana.
Private label brands are reshaping the fast-moving consumer goods (FMCG) landscape across Europe, securing a nearly 40% market share and demonstrating resilience through quality and innovation, according to Circana’s latest report, ‘Private Labels: Transformation for Growth’.
The report highlights how private labels have capitalized on evolving consumer preferences, offering high-quality, cost-effective alternatives that align with growing demand for health-conscious, sustainable, and value-driven products.
Despite inflationary pressures across the sector, private label sales surged, with a 9.4% increase in value sales and a 2.2% rise in volume sales across Europe’s six largest markets—France, Germany, Italy, the Netherlands, Spain, and the UK—as of March 2024. With a 39% share of total FMCG value sales and 46% of unit sales, private labels have firmly cemented their presence as key players in the industry.
“Private labels have redefined the competitive landscape, not just by offering lower prices but by consistently delivering quality, innovation, and sustainability,” said Ananda Roy, Senior Vice President of Thought Leadership at Circana.
“Their success underscores a broader consumer shift towards brands that align with their values, particularly in health-conscious and eco-friendly categories.”
Private label penetration is particularly strong in categories such as chilled and fresh foods, household care, and personal care. Baby food and pet non-food products have seen some of the most significant growth, with market share gains of 2.3 and 2.2 percentage points, respectively. Among European markets, Spain leads with a 48% private label share, followed by Germany at 43% and the Netherlands at 42%.
While private labels have strengthened their market position, national brands have struggled to regain momentum. Aggressive promotional strategies have helped major brands recover slightly, but even with 43% of national brand units sold on promotion in the UK, they continue to lag behind private labels in overall growth.
Circana’s report outlines four key strategies for national brands to remain competitive: diversifying into adjacent categories, driving category growth through innovation, strengthening brand differentiation, and forging strategic collaborations.
Brands that rely solely on discounts rather than investing in product development risk falling further behind in an increasingly competitive market.
The slowdown in innovation presents an additional challenge for the FMCG sector. Circana warns that category innovation has declined, with 17% fewer new product launches recorded due to supply chain disruptions and a focus on core product lines.
This trend threatens to turn the FMCG sector into what Circana calls an “innovation desert,” emphasizing the need for both private labels and national brands to reinvest in product development to drive long-term growth.
Looking ahead, private labels are expected to maintain their growth trajectory, supported by investments in product range expansion, premiumization, and sustainability initiatives.
Consumers’ growing preference for health-conscious and ethically sourced products will continue to shape purchasing decisions, reinforcing the importance of aligning brand strategies with these shifting values.
Circana projects a cautiously optimistic outlook for FMCG growth, with GDP in the Eurozone forecast to increase by 0.4 percentage points in 2025. Private labels are well-positioned to sustain their momentum, but national brands have the opportunity to close the gap if they prioritize innovation and category diversification.
“2024 marked a pivotal year for the FMCG industry, with private labels setting a new standard for growth and innovation,” said Roy.
“Looking ahead, 2025 will be a defining year for both private labels and national brands, as long-term success will hinge on their ability to innovate and connect with evolving consumer needs. The opportunity is open for all brands to differentiate themselves and deliver products that resonate with today’s value-driven consumers.”
Find out more at: https://www.circana.com/