Why Private Labeling for Beverages is Trending Globally

 

During the forecast period (2019-2026), the private label food and beverage market all set to witness a CAGR of 7.45%. This, in turn, will help to increase the demand for RTE (Ready-To-Eat) foods, and the rising popularity of healthy snacks will drive the growth of this market. 

Rapid urbanization and increasing disposable income are amongst the most important factors that are advantageous for influencing the average annual growth rate of the private label food and beverage industry. 

Private label food and beverage is a comprehensive report covering market parameters about the industry itself. The report details the leading market competitors along with their SWOT analysis. In addition, the report includes market evolution, market shares, and level of investments with other companies. 

Now, before we get to the part of why private labeling is on surge these days, let’s first discuss what actually is private labeling? Well, it’s a common form of merchandising that can generate positive returns on investment for manufacturers and store owners.

Advantages of Private Labeling for your Beverage Brand

There are plenty of benefits of private labels and mostly, being leveraged by the food and beverage industry. Let’s have a look:

High-Profit Margins

In order to build a big customer base, make product designs, and set up marketing campaigns, brand personality is of utmost importance. Private label products use the retailer’s private label brand. It is completely upon the retailers to design manufacturing, packaging, and marketing while cutting down the added cost. You pay the product cost without a premium for the brand name.

Build Brand Loyalty

Previously, consumers considered brand name goods as superior to private labels. Nowadays, private label goods have made their name in the world of top-quality goods.  

Private label products have achieved a higher level of quality and consistency. All this is because of improved product innovations and enhanced manufacturing processes. As customers stay loyal to one store, it adds to the reputation of private label products which leads to better brand loyalty.

Reduce Operating Costs

Private label products usually sell at five or six times the manufacturing price. This will give a lot of space to manufacturers to provide the price discounts required of private-label goods. So, there are many items manufacturers find a lot cheaper and produce in high volume too. 

Because most of the private label products receive orders in bulk from retailers, manufacturers exploit the benefit of building and shipping all products to an individual consumer. Both of these factors keep the operational costs down.

High Market Stability

The reasons why consumers pick private label products is because of quality, affordability, and consistency. The stability in the market can be of great interest for manufacturers because there is less chance of retailers freezing orders during uncertain times.

Moreover, retailers would actually increase the order quantity during the economic downfall as private label goods are more in demand during those difficult times.

To Sum Up,

Despite market uncertainty, the opportunity will belong to those who know the customer demands best and can deliver superior products at the best price. The game is changing at a fast rate and it would be interesting to see how private labeling progresses in the coming years to serve manufacturers and customers.