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Brian Sharoff, PLMA - "The producers must adapt their strategies to the tendencies of the market"

29/05/2012 11:51

Brian Sharoff for over 30 years leader of the Producers of Private Marks Association (PLMA), has put his mark on the evolution of the private brands all over the world. In spite of the present evolution of the economy of the world, the emblematic president of the PLMA, is seeing a huge opportunity for the private brands in this. The recent Nielsen study, presented in preview at the International Private Label Fair in Amsterdam, confirms it.


Present in Amsterdam for the 27th edition of the International Private Label Fair, Brian Sharoff, president of the PLMA, answered to the questions asked by brandprivat.ro. It was an interesting discussions concerning the tendencies and present opportunities on the private brands market but also about the producers' approach in their private brand strategies.


Viewed from outside, this year PLMA edition shows like an incredible showdown.

It is true. It was a record of participation with over 2100 exhibitors from 70 countries. The 42 national and regional pavilions made an additional point of attraction. Among them for the first time, the national pavilions of Portugal, Mexico and Egypt.

In front of the Europe complex a huge tent was rising, with a few dozens of companies represented.

The real exhibition area is over passing 34,000 sqm. Due to demand, we had to enlarge it and thus the tent had appeared.

PLMA - the Private Label Manufacturers Association is globally covered now.

Indeed, we are present now in 70 countries with 3,200 producing companies members of the association.

Romania is a small country with a growing economy...

Yes, it is a beautiful country.

How is Romania viewed by PLMA through the perspective of its economy 

Romania, as a member of PLMA is a very active country. The Romanian producers are developing products which can be already found under private brands of various European networks. It is a good market for the private brands, with a huge potential, and the regular presence of some Romanian producing companies at the editions of the Amsterdam Private Label International Fair proves it.

At the seminary in the preview of the Fair, PLMA presented a Nielsen study about the evolution of the private brands in European countries.

Our co-operation with Nielsen is a traditional one and started in 1998.

We marked an interesting aspect. A trend of European level directed to products with added value.


Eastern Europe is yet an area where the price still has an important role in the consumer's perception

Yes, indeed.

Do you think we can see some changes in the near future?

It is possible. It depends yet by the retailers disputing the respective markets. Some retail networks, like Tesco, can develop more categories of private brands in parallel. Thus there is an option for the first price through an economic brand, but also a option premium, through a brand to address to another category of consumers, based on quality and on premium products, not on price. Most of the times the scenario with two different brands is the strategy approached by the retailers on transition markets like the Eastern European countries. The price remains an important element and it matters whether you buy a car or a private brand.

There are countries where the price criterion is dominating

The choice is a retailers' one exclusively. If they consider that for the respective market the first price is the most important option, then it is here they should focus. But it is better for the countries in transition if the retailers develop in time a second category of brands, with added value. If the transition of the respective economy is impressive, they simply can reposition the first price brand on a higher level. But this is the retailers' decision exclusively. Some of the retailers take good decisions others can take contrary wrong decisions.

The Nielsen study presented data about the evolution of private brands in a few European countries.

Nielsen started their monitoring in 5 European countries in 1998. Now, there are 20...

Do you think that Romania could be included in this panel?

Such decision belongs with Nielsen...

Our estimations show a share of 12% of the private brands on Romanian market. But we talk of a market of double value if compared with that of Hungary's or Slovakia's.  Romania is a much larger market for the private brands.

It is true. Unfortunately, in this case the decision belongs to Nielsen people exclusively.

There are countries where the retail networks are buying production capacities.

The retailers are developing into their own producers of private brands.

We talk about much lower level of the costs

Yes. But this is a share of their own strategy.

Can such a strategy be a threat for the private brand producers?

The strategy cannot be considered right or wrong. It depends of each separated retailer. Some of them succeeded to obtain profit by developing their own production capacities. Others, contrary, have realized that it was their greatest mistake. Why? Because firstly they could not use their production capacities hundred percent only by sales in their own store networks. So, they started to look for clients to cover and to make their production capacities efficient. Unfortunately nobody was interested. Thus, in many such cases the own production was not a success for the retailers. There is no need of a winning strategy.

It also depends of the category of the products.

There are also categories where the retailers recorded success. The ice cream or the sweets are just two such examples. The retailers who bought such capacities succeeded to develop products of their own and even get profit in this category. If they are not able to sell the entire production through their own stores, than loses will certainly occur.

Which are in Eastern Europe the long terms categories which could represent opportunities for the private brands?

We cannot foresee what the consumer will prefer in time and the way their consumption habit will evolve. What we know is that certain demographic changes will occur in time. Mankind must feed itself. Many do not have the necessary time available. So their option is for ready meals. It is simple. You buy a product, get home, put it is the microwaves and within two seconds or two minutes the meal is ready. You can be so anywhere in the world. In Mexico or Singapore, or wherever you like, with a traditional dinner in front of you. This is increase! Everybody anticipates an increase of this category.

Secondly, the cosmetics will increase. Gone is the time when the producers had the monopoly. More and more retail networks develop their own cosmetic lines. The youth, the girls around 24 years, are much devoted to a brand? No way. For many consumers the brand has no much importance. Then the men. Men start to use cosmetics more frequently. And so, the category of consumers is expanding.

On long terms these can be two of the market trends.

On the other side it is the health. More and more persons are preoccupied by their health. They protect against diabetes, hart diseases. They give more attention to what they eat. The retail networks started to develop such products. Just here, at the Fair, in the Supermarket Idea, entire lines of production can be seen created especially for those willing to eat healthy.  Here are three tendencies for private brands in future. But behind them there are suppositions or options for each and every of us. 

The aggressive evolution of the retails networks on ground of the economic crisis led to multiplication of the promotions on Romanian market. The more and more frequent are the co-branded promotions between producers' and private brands.

There is no interest for the producer brands (A brand) to promote the private ones. Contrary, may be they are more interested to destroy them. Such a co-branded promotion is a way to kill a private brand. The retailers accept them because they are interested by cash. I do not think this is a good strategy for a private brand.

The European economies are passing through a difficult period of time. What the producers ought to follow?

Independent of its geographic location, each country has its strong points and the weak ones as well. If the producers in Romania for example consider that they have certain strong points, they ought to go on them. There are 70 countries presented at this Fair. We can bet that at 68 of them we shall find olive oil. And then, which is still a producer's strong point when he cannot differentiate through his products? Besides maybe the fact that he will sell the olive oil at the lowest price on the market. But this is no longer a gain. The producers must adapt their strategies to the tendencies of the market. Each of them must identify their opportunities and their strong points and to stake on them. Otherwise everybody will sell just olive oil.

Florin Frasineanu   




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