PLMA's Brian Sharoff talks own label
Since assuming the presidency of the Private Label Manufacturers Association (PLMA) in 1981, when Ronald Reagan was US president, his name has become almost synonymous with own label.
Doubters need only look at what this indefatigable 66-year-old has made of the annual PLMA exhibition in Amsterdam.
Thirty years ago, the venue was just a few chairs and tables in a corner. Today, it has become a must-have for the whole trade with more than 3,800 exhibition stands and over 9,000 visitors from 100 countries.
This year's get-together will be in Amsterdam's RAI Exhibition Centre from May 28-29. Are you coming too?
"A unique cross-border heritage"
Mr. Sharoff, why is the PLMA a 'must' for private label buyers? And what makes a successful venue?
The show is the only place where visitors can see so many products, suppliers, and retail buyers – all devoted exclusively to private label, in one place at one time.
Success can be measured by the rate of exhibitor renewal and retailer attendance. Both are very high at PLMA.
In Germany, discount giant and classic own label retailer Aldi has recently begun to list top brands such as Ferrero's, Nutella, Milka, or Coca-Cola. Doesn't this prove that even the best private label retailers can't exist without supplier brands?
Well-known A-brands have always played an important role in retailer strategy. Some retailers present a mix of both A-brands and private label. Other retailers rely predominantly on their own brands.
I don't think that Aldi's decision alters traditional approaches. It simply reflects Aldi's view of its needs and customers.
Brand manufacturers are reorganising the way they buy raw materials in order to reduce their vulnerability to supply and price fluctuations. They are vertically integrating pre-suppliers, co-operating with raw materials producers, sourcing locally, and even buying land. What are own label manufacturers doing?
All manufacturers, whether they make A-brands or private label, are actively seeking ways to make their supply chains more efficient. They have no choice if they want to be seen as the lowest-cost producer.
What international retailers are currently running the best own label programmes?
Every year at the PLMA show, we have the 'Idea Supermarket' where visitors can see the programmes of more than 60 retailers around the globe.
When you look at what retailers are doing in Europe, Asia, Latin America or North America, it is clear that you cannot select one retailer. They are all developing exciting packaging and product concepts.
Which own label product has got you most excited over the last twelve months?
My favorite own label products have been the Mexican food products marketed by Axfood in Sweden. The packaging was excellent, but more importantly it shows how retailers have to be multi-cultural nowadays if they are going to satisfy their customers.
What trends currently dominate private label development in Europe?
There is no doubt that economic conditions are still extremely influential regarding consumer purchasing. We recently did a study of 10,000 consumers in 13 countries, and it showed that 80.7 per cent feel that the economy will not improve in the year ahead.
This has a significant effect on retailers since they want to be responsive to consumer needs. At the same time, it should be remembered that organic and biological products are attracting a strong following.
Private label sales have been growing for years. Will this trend continue?
The growth of private label over the past ten to 15 years is permanent. Continued growth will depend on the continued ability of retailers to offer innovation and to respond to consumers. The marketplace is very competitive and private label cannot rest on past success if it wants to keep growing.
How innovative is private label really?
Actually, private label has been very innovative and no longer relies on me-too products for its appeal to consumers. Of course, this will vary by retailer, category, and country.
In what product groups are private label manufacturers particularly innovative?
A very strong spirit of innovation has been seen in ready-meals and microwaveable foods. Many retailers have distinguished themselves brilliantly within this sector.
Would you agree that own label is becoming an increasingly important marketing tool for retailers in getting them away from fighting on prices and helping them to create exciting product worlds where they can differentiate themselves from their competitors?
Yes, I think this is true around the world.
Presumably the same applies to PLMA in Amsterdam: The exhibitors must present more truly innovative concepts and fewer me-too products?
Absolutely correct. Retailers want to see products that can differentiate themselves from their competitors.
It has long been debated whether it might not be more sensible to hold national PLMA exhibitions in France etc. But most of the PLMA exhibitors we have asked are not in favour of this idea. What do you think?
National shows are important, but what makes private label unique is its cross-border heritage: manufacturers from many countries competing for retail business in an environment which emphasises an international supply chain.
You are now 66 and have presided over the trade organisation since 1981. Your current five-year contract runs until 2017. What are your plans after that?
I will ask the Board of Directors to re-appoint me. Private label is an exciting business, and the PLMA has been a wonderful organisation.