Battle of the brands
The milk category best illustrates the new set of battle lines that are being drawn. Over the past few years, the big brands in the category have seen their market share diminish significantly as a result of escalating own-brand penetration. However, Avonmore, the market leader in the category, and number two brand overall, has proven itself to be more than ready for the challenge, delivering new concepts (such as its Peak Fresh campaign) and products (such as Avonmore Heart Active) in order to keep itself front-of-mind with consumers. As things stand, the strategy appears to be working, with Avonmore maintaining its market share of 27 per cent (year to end April 2012, compared to 28 per cent for the same period in 2011), while the private label share grew four percentage points over the same period.
Other categories have seen an array of groundbreaking innovations. Denny 100% Natural Ham, a ham produced from only natural ingredients, has reinvigorated the sliced meats category ahead of the new school term. Heinz has rewritten the rulebook when it comes to how consumers engage with the baked beans category, via the Fridge Pack. Kraft Foods, makers of both Cadbury chocolate and Philadelphia cream cheese, has united the two to create not just a new brand (Choccy Philly) but a new category, backed by one of the most effective shopper marketing campaigns in years. Certainly no shrinking violets there.
But brands also need to ensure that they don’t pull the rug (or should that be shopping trolley?) out from under themselves by engaging too heavily in price promotion. While promotions are unavoidable in today’s value-focused culture, brands need to also communicate on matters other than price in order to gain long-term consumer trust.
Some brands can afford to dabble almost continually in the promotions game; Coca-Cola is an example of a top brand that is constantly involved in some form of promotional activity (particularly on its 2-litre multipacks) – and nobody would say that Coke has lost its edge. But establishing an intensive cut-price strategy to drive short-term volume growth can significantly damage a brand’s integrity, and can be suicide for new entrants to the market, regardless of how groundbreaking their proposition.
The typical Irish consumer may claim to be a strong advocate of brands, of private label, or of a combination of both, and care little for the battle for shelf space taking place under their noses. But it’s worth bearing in mind that most categories are dependent on major brands to set benchmarks; “agenda-setters” that lead the market, rather than follow. Without an Avonmore, a Tayto or a Jacobs to raise the bar, a brand-free marketplace could grow stale very quickly. And that’s to say nothing of consumer choice.
The life of a big grocery brand these days is akin to that of a swan: stoic and confident to the naked eye, yet paddling furiously beneath the surface in order to keep going. For the long-term health of the grocery sector, it’s imperative that they stay above the water line.
Stephen Wynne-Jones is the editor of Checkout magazine