Now that the ground rules have changed, the real question is simple:
How can FMCG leaders win when private labels are evolving faster and consumers are switching more?
If you’re serious about future-proofing your brand — and not just defending old ground — keep reading.
The last section breaks down 7 actionable strategies that top-performing CMOs are already using to turn disruption into opportunity.
👇 Let’s dive in:
Market Overview
Europe’s supermarket shelves increasingly display national brands and retailer-owned labels side by side. In 2024, private labels hit a record share — about 39.1% of total grocery sales value (up 0.3 percentage points from 2023) (McKinsey).
Surveys show 84% of consumers plan to keep buying store-brand products even if their income recovers (McKinsey).
Key Drivers of Private-Label Growth
1. Economic Pressure (Value-Seekers)
High inflation and cost-of-living pressures pushed consumers toward cheaper alternatives. Price-conscious shoppers powered private-label sales to record highs in 2023 (Deloitte).
A Deloitte survey found 64% of executives expect more “trading down” and 78% of staple categories have already lost share to store brands (Deloitte).
2. Retailer Strategy
Leading grocers treat private labels as strategic assets. Many retailers position select private label lines as “powerhouse” brands, investing in dedicated R&D, packaging, and marketing (McKinsey).
McKinsey finds that retailers with higher store-brand shares are 2.8× more likely to gain market share (McKinsey).
3. Perceived Quality Parity
Over 50% of shoppers choose private labels for their perceived quality, and about a third see no real difference from national brands (Kantar).
This has eroded a key advantage of big brands: brand loyalty.
4. Consumer Trends & Culture
Social media “dupe” culture, especially among Gen Z and Millennials, fuels private label growth (The Grocer).
Examples: Aldi’s Lacura skincare and Boots’ Ingredients line successfully mimic premium brands at a fraction of the cost (The Grocer).
Branded Products: Pressures and Responses
Top-10 brands in many categories have quietly ceded share. Kantar finds the average leading brand in Europe lost ~0.14% of share to private labels over three years (Kantar).
During economic downturns, brands typically recover only about one-third of lost share after recessions (Kantar).
Successful brands focus on innovation and distinctiveness rather than price competition (Kantar).
Kantar found “winning” brands raised prices about 20%, while losing brands raised prices 30% or more (Kantar).
Consumer Behavior Trends
1. Value-First Shopping
The ongoing cost squeeze has left consumers permanently more price-sensitive.
78% of staple categories have shifted to private labels, according to Deloitte (Deloitte).
2. Switchers (“Nudgeables”)
Brands grow by targeting the 15% of consumers who are naturally curious and willing to switch products (Kantar).
77% of growing soft-drink brands were disproportionately bought by switchers (Kantar).
3. Health and Sustainability
Consumers, especially Gen Z, demand “clean,” functional, and eco-friendly products (McKinsey).
45% of Gen Z focuses on health-conscious buying decisions (McKinsey).
Category-Specific Insights
Food & Grocery
Private labels dominate staples. McKinsey projects private-label share to reach 40–42% by 2030 (McKinsey).
However, niches like fresh produce, premium deli items, and functional foods offer opportunities for brands (McKinsey).
Beverages
Private labels thrive in everyday sodas and bottled water, but innovation (e.g., flavored waters, kombuchas) keeps brands competitive.
Personal Care & Beauty
One of the fastest-growing private-label categories (The Grocer).
Retailers like Boots (Ingredients) and Aldi (Lacura) successfully compete with prestige brands through trendy, ingredient-led offerings (The Grocer).
Household & Cleaning
Private labels dominate in detergents and paper goods, but branded players focus on eco-friendliness and health differentiation (Deloitte).
Company Examples
Retailers
Aldi, Lidl, E.Leclerc and others lead the charge. In Spain, Lidl’s private labels generated €1 billion in sales in 2023 (McKinsey).
Brands
Unilever’s Magnum and Lego (non-FMCG) used “award-winning” advertising to defend against private-label copies (Kantar).
Nestlé and Danone segmented their portfolios to balance premium and value shoppers.
Illustrative Cases
Boots’ Ingredients line targeted The Ordinary’s fanbase (The Grocer).
Aldi’s Lacura challenged luxury cosmetics (The Grocer).
Brands like Nespresso (Nestlé) created direct-to-consumer models to bypass retailers.
Strategies for FMCG CMOs
1. Leverage Data and Technology
Data mastery is now a fundamental marketing competency, not an add-on.
F500 companies leading the pack integrate AI not only in media buying and personalization but also in R&D innovation, demand sensing, and dynamic pricing.
Example: Mondelez uses AI to predict flavor trends and optimize innovation pipelines for Oreo and Cadbury.
In a world where private labels own the checkout data, brands must build direct-to-consumer (D2C) channels, loyalty programs, and partnerships that recapture consumer insights at scale.
Without real-time feedback loops, brands will always be one step behind in adapting to shifting behaviors.
Key Thought: “The brand that knows its customer best will win the next round of market share battles.”
2. Smart Pricing & Packaging
Price elasticity has shifted dramatically. Brands that simply pass through cost increases without redesigning value propositions are losing ground.
Smart pricing today involves creating perceived value that justifies any premium — and it must be visible at first glance.
Tactics like offering new pack sizes (e.g., mini-packs, family bundles), personalized discounts, and value-added multipacks are vital.
Packaging also plays a critical role in signaling brand superiority: eco-friendly materials, sleek designs, and informative labels can act as silent differentiators at shelf.
Remember: consumers are buying experiences and trust — not just products.
Key Thought: “Price is what you pay, value is what you feel.”
3. Target Switchers (“Nudgeables”)
Today’s most valuable consumers aren’t loyalists — they’re the curious, flexible shoppers willing to try something new.
Identifying and targeting “nudgeables” is more efficient than trying to reinforce loyalty in static audiences.
Personalization engines, digital retargeting, influencer partnerships, and in-store sampling remain powerful tools to attract this high-potential group.
Brands that dominate among switchers tend to recover faster and grow faster after downturns.
Example: In beverages, Red Bull’s constant micro-innovation in formats and limited editions maintains “newness” that draws switchers repeatedly.
Key Thought: “Growth doesn’t come from defending territory — it comes from winning undecided minds.”
4. Strengthen Brand Equity
When price competition intensifies, emotional affinity becomes a critical advantage.
True brand equity today hinges on authentic storytelling, sustainability, community engagement, and delivering on brand promises.
Consumers, especially Millennials and Gen Z, demand evidence: they want brands that don’t just claim values but live them transparently.
Brands must continually reinforce their DNA through product experience, customer service, and omnichannel storytelling.
Initiatives like Patagonia’s activism or Dove’s real beauty campaigns show how authenticity builds long-term resilience even against cheaper alternatives.
Key Thought: “Brands that embody a mission beyond profit create moats that price alone cannot breach.”
5. Innovate Continuously
In a market where private labels are not just cheaper, but often comparable in quality, FMCG brands must treat innovation as a permanent operating system rather than an episodic event.
Meaningful new launches — not just flavor extensions or cosmetic tweaks — are crucial to stay ahead.
Products that solve new problems, deliver clear functional improvements, or create emotional resonance are far harder for private labels to quickly replicate.
F500 CMOs should also embed agile innovation cycles: piloting smaller launches in specific markets to learn fast before scaling.
A great benchmark: Nestlé’s strategy of testing niche plant-based and functional SKUs in select European cities before full rollouts.
Key Thought: “Private labels can imitate what you have; they can’t imitate what you haven’t invented yet.”
6. Collaborate Smartly
Retailers are no longer just channels — they are ecosystems.
Negotiating shelf space and pricing must be done with a long-term view of strategic alignment, not zero-sum thinking.
Sometimes, co-creation or exclusive SKUs for key partners can be a lever for protecting premium positioning without margin destruction.
However, brands must maintain discipline: not all collaborations are created equal, and chasing short-term volume through poorly thought-out partnerships can erode brand prestige.
An example to follow: premium collaborations between brands like Levi’s x Target that manage to blend mass appeal without diluting equity.
Key Thought: “Partnering without losing your soul is the new art of FMCG growth.”
7. Agile Portfolio Management
Static portfolios are liabilities in dynamic markets.
CMOs must continuously reassess SKU performance based on fast-changing consumer behaviors, competitive pressure, and profitability — not just historic volume.
This includes pruning underperforming brands, nurturing emerging niches, and entering white spaces faster than private labels.
McKinsey data shows companies that prune and focus outperform scattershot portfolios in both revenue growth and margin protection.
Today’s winners don’t cling to yesterday’s cash cows — they invest in tomorrow’s growth engines with speed and courage.
Key Thought: “Adaptation is no longer optional — it’s the only sustainable competitive advantage.”
Conclusions:
Reflecting on these trends, it’s clear that even the strongest F500 FMCG companies can no longer rely solely on brand legacy.
In today’s market, survival and growth depend on agility, constant innovation, and deep consumer understanding.
The brands that will thrive are those bold enough to rethink portfolios, sharpen value propositions, and move closer to their consumers than ever before.