Copycat own-labels threaten brands

07 November, 2014

proliferation of copycat own-labels in supermarkets is stealing share from the original brands and eroding their value, suppliers have warned.

Forty-six per cent of those polled in OLN's Spirits Report said copycat brands were diminishing the worth of the brands being copied, and another 38% said they took share directly from the original.

Just 15% believed they did not have an impact on brands.

“Copycat products are a threat to brand owners,” said Bill Roberts, general manager and vice-president EMEA at Gallo.

“If it is a strong brand people clearly recognise the difference, but it’s important for strong brands to stand on their own and it’s important that people don’t cross the line.”

Alistair Mutch, regional sales manager for Tomatin Distillery, said: “Big brands invest a lot of money in packaging research to get it right, so it seems unfair that third-party lines are allowed to copycat bottle shape, label style etc.”

Halewood International spirits and agency brands head James Wright said: “Own-label products take a percentage of the category, as consumers are still aware of the brand they are copying in terms of its visibility and value offerings.

“Brands in supermarkets are driven by supply and demand, so if there has been a surge in sales, then the consumers are evidently demanding this value offering.”

We also asked suppliers whether the economic doldrums that have defined the UK market in recent years have boosted cheaper own-label spirits sales.

They said the downturn had split spirits drinking, with some consumers seeking ever-cheaper alcohol and others trading up.

Just 5% of spirits suppliers believed the recession had pushed consumers to choose cheap, own- label spirits over premium brands, compared to 75% who said that was not the case.

Meanwhile, 60% believed consumers would be looking towards premium spirits even more as the economy began to take a tentative turn upwards.

“The recession has polarised the marketplace,” said Love Drinks managing director Kirsty Loveday.

“Cheaper brands have seen a rise in volume but very little in value due to tough competition. Some consumers are not so affected by the recession and almost like to buck the trend or buy less but better quality as a more occasional treat.”

Halewood’s Wright said: “Consumers in take-home are always looking for value, but on- trade consumers are leaning towards premiumisation, cocktail innovation and a theatrical experience at a bar. Value has an array of different meanings and it is dependent on how the consumer defines that.”

Many suppliers said their premium offer had seen better growth than the rest of their portfolio in recent years.

Chilgrove gin managing director Christopher Beaumont-Hutchings said: “From a gin perspective we have been increasingly seeing the consumer’s eyes being raised up from the bottom shelf offering.

“Clearly there are other contributing factors at work, but our market research has surprised us by indicating that the recession has had a positive impact. Belt tightening may have resulted in people drinking less but, as a result, what they do drink needs to be better.

“We don’t think this is counter-intuitive at all. If you cut back your daily G&T to a weekend indulgence then that G&T needs to do more than just hit the spot – it needs to be an experience that stays with you well after the glass is empty.”

Cotswolds Distillery head of marketing and PR Rachel Tranter added: “People are now very much interested in where their drinks are coming from, with provenance and quality being overriding factors that push consumers from browsing to making a purchase.

“Current trends towards organically grown and sustainable produce have caused this shift in attitudes, meaning that in fact consumers are drinking less often, but drinking spirits of a higher quality.”

Read more in OLN's Spirits Report 2014

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