Crisis accelerates own brands market
Valor Econômico - 05/04/2009
The crisis accelerates the development of own brand products. The expectation is that the sales of those products, which until last year represented 7% of the earnings of supermarkets, drugstores and other kinds of store, get to 9% this year. In practice, the consumer will go for more own brands and the array of products will be also bigger. With that, the earnings of the sector, which amounted to nearly R$ 170 billion (US$ 92.9 billion) in 2008, may get to R$ 197 billion (US$ 89.5 billion) until December, according to the Abmapro (Brazilian Association of Private Label Brands).
In the Pão de Açúcar Group, for instance, 3% of the earnings resulted from its own brands at the end of last year. "Our goal is to get to December with 6%", says the CEO, Claudio Galeazzi. "It is still little. In Casino, France, that percentage is 30%", he affirms. In the Dia% chain, owned by Carrefour, with 330 stores in the State of São Paulo, the amount of items will increase from 700 to 800 this year. 83 products are currently being developed. Another evidence of the expansion of the sector will be the 25th International Supermarkets Business Fair organized by the São Paulo State Supermarket Association, from 18 to 21 this month, in São Paulo, which, for the first time, will have a special area only for own manufacturers of own brands. The sector has already been growing for some years. The number of own brand products in retail increased 31% between August 2007 and July 2008, according to Nielsen. Such a drive comes, on one hand, from the consumer's desire to save money. Afraid of a possible unemployment and fearing harder days concerning the economy, the Brazilian people has not stop buying. Nonetheless, they'd rather buy cheaper products, according to a recent survey carried out by Nielsen. On the other end of the business, the shortage in the stocks that hit the supermarkets in the beginning of the year also explains the change in the sector.