Own label's share of the market is small but some areas are growing rather nicely and heading in a premium direction. Tracy Kelly reports.
Own label? That's like cheap-looking supermarket branded bars of chocolate, isn't it?'
Such remarks may still be made by those who naively think they know the own label market. Yet the reality today could scarcely be further from the truth.
A keen dynamic for retailers to grow both sales and profits in recent years, as with many other sectors in grocery today, own label no longer has the stigma once thrown at it by snooty consumers.
Nevertheless, despite having worked hard to bury the dour image attached to yesteryear's slabs of supermarket-branded chocolate, sales in the sector actually suffered a dip in the last 12 months.
Own label accounted for 5% of the confectionery market in terms of manufacturers' share in the first quarter of 2002 - down from 6% for 2001, according to Cadbury Trebor Bassett's confectionery report for 2001/2.
While this might seem like a small part of the confectionery market overall, Cadbury says the own label market has seen a number of growth areas in the past year or so, particularly in traditional sugar, bagged shelf lines and moulded and filled eggs.
Retailers have to achieve a balance between the high margins offered by own label and the importance of offering consumers a wide choice of products and brands.
Own label products can also attract customers with a low price point. Sainsbury says its own label confectionery is typically 20% cheaper than branded counterparts - although retailers are keen not to devalue the perception of the quality by doing so.
Much of the own label activity as far as the multiples are concerned is in the chocolate market. Sainsbury, for example, says block chocolate is its most popular own label confectionery line, while Marks and Spencer says its Belgian chocolate line is the bestselling St Michael confectionery range.
Waitrose also takes own label seriously and offers a wide range of own label confectionery. Like most retailers, it says that chocolate is the most popular product.
Waitrose has taken the approach of having two main strands to its own label confectionery business.
A spokesman said: "As far as own-label is concerned, we offer innovative and slightly unusual products which offer a unique point of difference to branded products available, and highlight the Waitrose reputation in food excellence - for example our range of six filled chocolate bars, our range of own label truffles, as well as our range of 100g chocolate bars with ginger, coffee and orange inclusions.
"The second main strand of own-label confectionery for Waitrose is to offer more mainstream products that offer our customers high quality products at competitive prices."
Waitrose says own label is sold where the company feels it offers a benefit to the customer - ie: that it is superior quality or better value than the alternatives without compromising on quality.
Ashbury Confectionery, the major private label confectionery supplier in the UK, says the main trend as far as the own label chocolate confectionery market is concerned is the move into premium products such as the luxury chocolate Thorntonesque' assortments (eg Tesco Truffle Selection) and bars (eg Sainbury's Triple Nut Temptation).
Such has been the demand for premium own label chocolate that Ashbury recently invested £1m in the installation of a new line to produce the luxury placed assortments and luxury bars for private label.
However, Ashbury says that at the other end of the spectrum, the UK food multiples are seeking to reduce costs of the mainstream private lines, such as twist-wrap and bagged confectionery, because of an increasingly competitive marketplace.
The company, which acquired Needler Blue Bird at the start of the year, produces chocolate and pick and mix confectionery for Tesco, Sainsbury, Asda, Waitrose, Aldi, Safeway, Iceland, Morrisons and Co-op among others. Ashbury's product range includes twist-wrap assortments such as Asda Moments, Waitrose Favourites and Tesco Occasions; and luxury placed assortments such as Asda Truffle Assortment and Luxury Bars.
Twist-wrap is a major sector for confectioner - it supplies all the own label twist-wrap assortments in the UK for Asda, Aldi, Tesco and Waitrose, as well as supplying most of France and Canada and also Aldi in the US.
As well as private label, Ashbury produces a range of chocolate, toffee and sugar confectionery under its various own brands including Ashbury chocolate bars, Ashbury chocolate confectionery bags and caskets, Ashbury chocolate Pick and Mix, Needler's Sensations, Blue Bird Toffee, and Needler's Jersey Toffees.