Own brand quality management. What is private label in trade? Hopes and fears

Prices for goods of own brands of chains (STM or private label) are 15-30% lower than retail prices for goods - analogues of well-known brands. In a crisis, 83% of Russians constantly buy private label goods, so both manufacturers and retailers benefit from this format. "Secret" talked to companies that make branded products retail chains, and found out how their work is built and what to worry about.

Taras Kozhanov

Director of Lukoz Saba, Deputy Director of Sernur Cheese Plant

Our company is one of the largest producers of cheese, dairy products, baby food from goat and cow milk in Russia. In Mari El, where our plant is located, the consumer is loyal to the brand, but there is a limited number of residents in the republic, so it is necessary to develop and increase production at the expense of other regions. Of course, our goal in deliveries is Moscow, St. Petersburg, million-plus cities. Therefore, we chose the private label format, which accounts for 35% of our total production volume.

How we started

It so happened that we were not the first to get in touch with retailers, but rather they found us. At the beginning of the 2000s, we presented our products - goat milk yogurts - at all-Russian exhibitions. At one exhibition, they met an entrepreneur (Taras Kozhanov refused to give his name. - Approx. "Secret"), who offered to release a product under his brand "Useful Products". He also offered our product to Azbuka Vkusa and agreed to supply it under our own brand name of the Our Farm chain. So we started issuing immediately under two private labels. It was very important for us, because "Our Farm" symbolizes high-quality products from domestic producers, and it is very honorable to become a supplier of "Azbuka Vkusa". For the next three years, the situation did not fundamentally change, the volume of production under these two brands accounted for up to 80% of our total volume of goat milk products.

How did they develop

In 2013, the Izbenka network developed dynamically on the Moscow market. We had a surplus of goat's milk, and Izbenka's suppliers could not cope with the demands of the network. This problem could be easily calculated, since there is a seasonal shortage of goat milk in January-February. I myself went to them and offered cooperation. The principal condition of the customer was the use of a certain bottle and label with their logo. It was difficult to start cooperation, we suffered losses due to the fact that the retailer was interested in supplying only goat milk, so the cars were empty. But two months later, the assortment was expanded and it became easier to work. Now we supply 16 SKUs (commodity items) for Izbenka and VkusVill, and the monthly sales volume in this network has grown 15 times over three years. Now Izbenka's products account for 25–27% of our turnover, and Azbuka Vkusa's products account for about 10–12%.

There is another example of a private label: the customer is not a trading network, but a large wholesaler, as in our case with Useful Products. We have 35-40% of private label products made for wholesalers. Typically, such a trading company has a portfolio of its own brands and acts as a distributor of several industries at once.

What did you learn

"Izbenka" is a unique trading network. With a large number of stores, it is quite loyal to suppliers in terms of pricing, delivery schedule, product line. Neither the minimum nor the maximum volume of supply is regulated, this is a common practice in cooperation under private label - the supplier undertakes to fulfill the network's orders in accordance with the needs.

With federal retail chains, everything is different, purchases are often carried out on a tender basis, they have a wide geography of deliveries and large volumes of orders. In this regard, private labels of the "federals" may not be so useful for small producers, because the fines for disrupting the supply of private label products are the highest. Most often, one hundred percent compensation for the amount of underdelivery and a fine, the amount of which I cannot voice, is prescribed.

Until the company has a clear understanding of whether it will make a profit from the sale of private label products, it is not worth rushing with shipments. It is necessary to carefully prescribe the conditions for terminating supplies in case “if something goes wrong”, because a label will be made especially for the supplier, sales plans of the network will be broadcast to him, so his technical or financial problems will subsequently be of little interest to her. In this regard, long-term contracts (from one year) are less profitable.

I plan to increase our private label share in production to 50% by the end of the year both in the regions and in Moscow. The main thing is to ensure that the share of sales to one counterparty does not exceed 20% of your total turnover. The risks are too high.

With the advent of products under foreign private labels, the volume of sales of products under our brands "Lukoz" and "Product Sernursky" also grew. Now, when a new product appears, we launch it online under our own brand, study the demand, and then decide whether to offer it under a private label. But our brands are still local, so we prefer to bring products to the capital's markets just under private labels. The company's total turnover increased by 27% in 2015, and two upcoming contracts can bring us another 9-10%.

Dmitry Sinitsyn

Co-founder of the company "Idigo"

Our company has been operating since 1999 and offers more than 400 commodity items in the field of spices and spices. Now we produce private label products for seven large retail chains (for example, “Each day” is a private label of the Auchan hypermarket chain, other brands are not disclosed by Aidigo due to trade secret. - Approx. "Secret") and several small ones. Products under our trademark are sold in the same networks, but cooperation under private label does not contribute to their promotion in any way. The share of private labels in the total volume of our products does not exceed 30%. This is a fundamental position. If you want business stability, do not exceed this threshold, because a private label retailer can often replace one manufacturer with another with relative ease.

How we started

Cooperation began after I participated in a private label conference at the Private Label Moscow Congress - 2006 exhibition and formed a package of private label proposals for the Ural Megamart. We were a well-known company in the Urals market and occupied 33% of the market, so it was not difficult to win the tender. The retailer relied on our experience and know-how in the formulation and marketing part. We proposed packaging (format and material) and recipe, and the retailer was engaged in design and promotion - the customer always takes on these tasks. Due to the proximity and lack of bureaucratic procedures, everything was done in two or three months, and at the end of 2007 we started the first shipments.

How did they develop

Our next client was one large foreign retailer (the terms of the contract do not allow disclosing its name in the media), which then only entered the Ural market. The retailer had a perfect procedure for selecting private label suppliers, their control and interaction with them. For about a year we brought our system to their standards and gained invaluable experience. The requirements of domestic retailers with whom we entered into contracts subsequently were lower than these requests or were copied from them. It became easier for us to win tenders.

We also produce our products in limited quantities under the client's brand. I think this is no longer a private label, but rather a white label - we do not develop for a network or a distributor New Product, take an existing one. This concept requires much less investment and time from both the manufacturer and the retailer. If the client's design is ready, then in three weeks, as a rule, we can start shipping.

What did you learn

Private label has obvious advantages - economies of scale, guaranteed orders, no additional promotion costs. But there are also hidden disadvantages. Almost all retailers want " the best price”, according to which they will buy products from us and sell them at home. Their business processes are set up this way: monitoring, pressure on suppliers up to the closing of a contract or individual SKUs (commodity item identifier), long approval procedures. As a result, prices lag behind the market, some suppliers drop quality and get into an unpleasant situation - and they don’t want to lose volumes, and even more so to work at a loss. Therefore, we adhere to the 30% rule.

Search, new markets and non-standard solutions - all this is not for private labels. Retailers need proven products, guaranteed sales volumes, no risk, and short delivery times (preferably tomorrow). Although there are exceptions: we recently made a STM for Perekrestok and everything, from the shape of a glass jar to the recipe, was developed individually. The result was a product that is not on the market and that you can be proud of.

Alexander Kuzmin

General Director of "RusHOLTS"

The RusHolts group of companies is one of the five largest suppliers of automotive products (windshield washer fluids, wipes, car interior fragrances, etc.) for specialized departments of federal hypermarket chains. We started our business in the 90s with the supply of auto chemicals and auto cosmetics, Russian market represented two global brands: Holts and Redex. After the default of 1998, people stopped buying imported expensive auto cosmetics, but the car fleet only grew. Then we decided to create our own full-length line of auto chemical goods and auto cosmetics. We have united the products created by us under the umbrella brand Expert. Now private label goods account for 60–70% of the supply turnover, depending on the sales season, and the remaining 30–40% are still sold under our brand.

How we started

Our first partner in the hypermarket business was the Lenta chain. The management team that created this company did not plan to separate the auto products department from the range of household chemicals and home goods. We ourselves came to them and helped to make another decision - this is how our cooperation began in 2001. Today, the automotive products department at Lenta is one of the most efficient departments in the world. food products this network. Windshield washer fluids are the most popular product in auto chemical goods, in winter they account for up to 30-40% of the sales volume of the entire range of auto products department.

How did they develop

For our company, the key was the transition to the creation of wide lines of private label products for gas station chains. Private labels in retail chains and in gas station chains are only called the same, but they work in different ways. If in hypermarkets STM is an “indicator low prices”, then private labels in filling station networks are an indicator of the network’s customer orientation and a “premium beacon”. Private label for federal gas station chains is a business technology that allows you to streamline the assortment at hundreds of stations throughout Russia. This is the only way to ensure that the store at the gas station of the same chain looks the same in Moscow and Siberia. Advanced filling station chains strive to achieve 50% share of private labels in the food segment and 80% in non-food segments.

We have been working with gas station chains since 1995, but this type of business began in 1999, after signing a contract for the supply of the entire non-food range with a gas station chain. Having assessed the market and the experience of Western colleagues, we ourselves began to enter the networks, offering our services as an integrated supplier. We manage supply chains, so we supply the entire range of goods for cafes and shops. Demand for non-food products decreases by 3-6% year on year due to the rejuvenation of the car fleet - this trend is typical for all markets. Therefore, since 2009, we began to actively engage in food products. In 2015, we created a Russian-roasted coffee blend under the private label of the gas station network, proving once again that absolutely all goods important for the company can be produced under private label. Since coffee is one in three non-fuel sales, it was very important to create it under private label. So we took it and did it.

What did you learn

Each manufacturer dreams of getting on the shelf in large hypermarket chains, tempted by sales volumes. But not everyone knows that networks are able to squeeze out convenient conditions from suppliers, they prescribe very large penalties for each violation of the contract and supply regulations. It must be understood that network retail earns not so much on buyers as on suppliers thanks to the system of fines. This is technology.

Penalties for non-fulfillment of current orders in the amount of 30%, for disruption of promotional deliveries in the amount of 100% of the cost of delivery are a common thing. And a sharp change in the exchange rate of the ruble leads to the fact that the supplier will violate the contract. When there is a jump in the exchange rate, it becomes unprofitable for the supplier to supply goods at pre-crisis prices, he wants to freeze supplies, but cannot do this - the network has the right to fine the supplier in the amount specified in the contract. During a crisis, demand for most goods usually falls, but the supplier does not have information about real demand, he sees only orders sent by the network. If the supplier refuses to supply, the network can send orders of any volume and immediately penalize the supplier for non-fulfillment of these orders. It is very easy to collect a fine - the supplier carries out shipments with a long delay in payment, so the network simply imposes fines and immediately reduces its debt to the supplier by the amount of the fines. Andrey Sorvachev

General Director of the Russian Canning Company

The Russian canning company has been operating since January 2003, and now we are one of the leaders in the canned fruit and vegetable market. Almost all the largest chains in Russia place their private label production with us, now we produce goods for 13 chain brands (Magnit, Auchan, X5 are among them).

How we started

The idea to make private labels for retailers arose while working with chains. For example, after our brands ("Retro", "Gift of the Gods" and "Marinadov". - Approx. "Secret") got on the shelf of "Magnit", they began to show very good sales. And then the retailer said: "We really like your products, we want to sell them under our own brand." This was around 2006-2007, when chains were still producing private label goods to a limited extent.

How did they develop

In 2009–2010, we started private label production for Dixy, X5 Retail Group, large regional chains (Maria-Ra, Holiday, Chibis and others) and quadrupled the range and share of private label products. At least 80% of retailers came to us on their own. Now the networks already know the pool of reliable manufacturers, therefore, even when holding tenders, they invite specific suppliers to take part in them. But there are chains that only plan to start selling under private labels. We track them down ourselves and offer our goods.

How much time it will take to conclude a contract depends on the specific network. It usually takes three to eight months from the date of the tender. For each client, we develop an individual recipe, composition, price, and sometimes we offer completely new products. For example, our company was the first to offer such a new private label product in Tander as the ratatouille dish. After successful test sales, other chains introduced it under their own brands.

What did you learn

The process of bringing your own brand to the market is very costly and time consuming. And chains are interested in private labels, and it is much easier to go there as their manufacturer. Also, this form of cooperation allows us to maximize the workload of production throughout the year, to have a predictable turnover, and to reduce logistics costs.

There are also disadvantages: the decision on the production of private labels is usually made once a year on a tender basis. Due to the unstable financial situation, the retailer often has to change the volumes and prices that are announced at the time of the tender. For example, due to a drop in the level of income of buyers, the network is forced to reduce the volume of purchases of products. The manufacturer is also at risk: the cost of goods at the time of the tender is the same, and during the year it may increase. The retailer is limited in the ability to raise prices, and we, as a manufacturer, still bear the obligation to supply. In addition, most of our range is a seasonal product (produced in summer or autumn). If the volume of orders decreases, we are forced to look for large storage areas and increase the cost due to storage costs.

The share of private labels is steadily growing from year to year, along with trust in chain brands, goods are distinguished by affordable prices and stable quality. In this fight, TMs are losing and will continue to lose. In my opinion, in the near future only those trademarks will remain on the shelves, which, even before the mass introduction of private labels, have won the loyalty of customers and provide the retailer with a significant turnover.

The trend to create a private label is actively developing in food and non-food trade, and often such products provide the main share in the turnover of companies. Networks "220 volts", "Yulmart", DNS tend to sell something of their own, even if it will be accessories. The brightest price tags and the biggest discounts, as a rule, are for private label products.

in the electronics business and household appliances own brand, or private label, carries a heavy load. For many stores, this is the only chance to survive and cope with the competition. Why is this happening? The fact is that most stores tend to trade in the so-called A-brands such as Sony, Panasonic, Canon, Bosch, etc., but they can only be interacted with through vendors that receive the main profit. The retailer gets only a small percentage. One more thing - everyone without exception sells large brands, which creates fierce competition between sellers. There is only one way out - private label, capable of providing a unique product offer, plus the entire margin goes to the store. Another important advantage of launching your own label for a retailer is the opportunity to become a vendor yourself and sell products on the shelves of competing chains.

The 220 Volt chain, for example, sells goods under its own Hammer brand. Small consumables and large appliances such as a grinder or a Chinese-made building hair dryer with their own labeling are sold at a bargain price and attract a buyer. Another major retailer, Ulmart, is developing the brand of Zifro TVs and monitors, which is 1.5 times cheaper than products from well-known manufacturers. The difference for the buyer is significant, while the seller, meanwhile, receives the entire profit - for both, the benefit is obvious. Unlike "220 Volt" and "Yulmart", whose private labels are not widely known, the electronics retail network DNS sells smartphones directly under the brand name of the store, thereby stimulating additional consumer loyalty.

The online store "Photosklad" tested this scheme on itself, for a year now we have been developing our own brand of small electronics and accessories Prolike (smart watches, fitness bracelets, optics, batteries, light filters, etc.). The product matrix is ​​very wide, in our opinion, it should be so - in almost any section of the store, in addition to well-known brands and Chinese analogues, there should be private label goods, which will allow the buyer to receive more choice, and the seller to qualitatively present the goods. From our own experience, we have seen that it is fundamentally easier to work with private label products. Private label provides independence from the manufacturer in terms of marketing: you can, for example, organize promotions and sales, and just play something. This is beneficial for both the store and the customer and plays an important role in building the retailer's image.

If you look at the Russian market of electronics and technology in general, now it is stores that create a platform for domestic production products. Therefore, the development of SMT in this segment is important not only for the companies themselves, but also for the country's economy as a whole. Today, Prolike accounts for about 3% of Fotosklad's sales. If the situation on the market changes in favor of domestic retailers, and the state cancels preferences for foreign online stores operating in this industry, we will have the opportunity to increase the share of private label sales to 20-30%. In this case, we can talk about launching our own production in Russia, which means the development of the domestic industry.

Leonid Abayushkin, General Director of the Federal Purchasing Union CJSC Sistema T3S, Moscow

• How to find the right supplier
• Is it worth selling a branded product similar to your own?
• How to design your product packaging
• How to choose a product for production under your own brand
• How to make private label products in demand

Production of goods own brand dictated by the realities of the market. It is no secret that with increased competition, the margin from branded goods is directed by transcontinental corporations and simply large manufacturers to aggressive advertising. Due to intrusive advertising, such products are in demand by the consumer. With what in great demand they use, the more dependent on them becomes the retailer who is forced to sell them. Conditions in this case manufacturer dictates. Therefore, large retailers are striving to create their own brand management and marginality. This, in fact, is the idea behind private labels. (Products of own brands - STM. - Editor's note).

How to improve the image of the store with the help of private label products

In Russia, private label production is only gaining momentum, while in the assortment of Western retail chains goods under their own brand sometimes prevail. Their share in the assortment varies depending on the type of store:

• in discounters - 80%;
• in ordinary supermarkets - 30–40%.

The norm is a situation when private labels occupy a third in the turnover and revenue of a foreign retailer, and in marginality - two thirds. A network without these goods can no longer exist: it will simply be economically untenable. And this is a general trend in the development of the market, and not a single example.

And although domestic retailers, creating private labels, proceed from the same criteria as foreign ones - low price, demanded product category - this cannot be called simple copying. Now the world market is developing progressively, and, accordingly, the need for changes is natural. It's just that, as a rule, changes appear earlier in Europe and America than in Russia.

So far, additional benefits do not play a big role for them - a criterion that is actively used by Western retailers. Namely - foreign stores pay Special attention useful, environmentally friendly products. Few Russian companies use this approach to compete with branded goods. But in vain.

Private label products from alcohol to pet food

Since the Federal Purchasing Union Sistema T3S was created in order to help retailers get more economic benefits from their activities, we are obliged to create private labels - this is a priority direction of development.

Today we produce products in the lower and middle price segments.

They often look similar to the leading brands on the market. Of course, we are not talking about mixing brands, but there is a product that is the leader of the segment, and it is logical to build on it. We are not the first to do this.

Practically all key categories of food and non-food goods are produced under T3C Systems own trademarks: from alcohol to pet food. There are six major brands in total. It would be wrong to say that some of them are more significant, and some are less. Each trademark created for a specific group of goods.

All brands of umbrella (names of goods in which the name of the manufacturing company dominates, and in the advertising of the company's products its logo is shown. - Approx. Editorial). Accordingly, their name should fit well on the maximum range of goods, be universal. Although, of course, there is an emotional component. For example, in the name of the brand "Praise". Praise is a bright word that carries the approval of the product, taste, quality and, finally, the manufacturer.

The average share of private labels in the chains included in the T3S System:

• in network income - 6%;
• in network turnover - 4%;
• in assortment - 2.5%.

I would like to emphasize that this is the "average temperature in the hospital." In some networks, these figures are 3-4 times higher, but in some they are lower. In general, it all depends on the attitude of the retailer to his own brand. By giving these products the right shelf space through display and other merchandising tools, you can grab the customer's attention. Well, since the cost of private labels with the same quality is always lower than the branded counterpart, sales of these goods will increase.

Since we already release products in most product categories. In order to choose which goods to produce, we analyze assortment matrices networks included in the T3S System, we study the analytics of consumer preferences, etc.

As we enter other price categories and more clearly structured by product range, brands may change. Based on Western experience, 25-30 private labels can be successfully managed. And the brand should be closed within the framework of price positioning or category.

Manufacture under own brand

We do not have our own production. We produce all private label products at enterprises that have proven themselves on the market on the positive side with proven and guaranteed quality and a well-functioning management system. Often at the same enterprises they make products under well-known brands.

We cooperate with manufacturers who:

• understand why it is profitable for them to produce private labels;
• are leaders in terms of costs in their field;
• have experience in the production of goods with a selected level of quality.

We hold tenders for the production of each item. Next, on initial stage work, we approve the recipe and receive control samples. Organoleptic (a method for determining product quality indicators based on the analysis of the perceptions of human organs. - Editor's note) product is controlled using these samples. They are also tested in certified laboratories for safety and compliance with GOST, TU.

The design and production of packaging is also carried out by third-party companies. Today we are developing budget lines of STM. Accordingly, the packaging is simplified. You can not make a wrapper for a cheap product expensive. Today we are deliberately simplifying the packaging, making it primitive. As we enter more expensive price segments, the quality of our approach to packaging design and emotional, image presentation of goods will certainly change.

• Store traffic: how to measure outlet traffic yourself

Practitioner tells

Maxim Kozuro, Head of the Semeyny Kapital chain of stores, St. Petersburg

When opening the store, we wanted to attract customers with a unique offer. Entering the market only with branded products is now useless: you will not be different from your competitors. Therefore, we initially launched production, and on its basis opened a chain of stores under our own brand.

We ourselves began to produce almost the entire line of dairy and sour-milk products (milk, baked milk, kefir, fermented baked milk, yoghurts, sour cream, butter, cottage cheese), except for cheeses. A sausage shop was also opened, which makes doctor's sausage, chopped ham sausage, premium ham, sausages and sausages. We are focused on the production of daily demand products, not delicacies. This is also why they planned to organize the production of bread. Now we produce, in addition to bakery products, pasta.

The name "Family Capital" was chosen to emphasize family values ​​and promote a healthy lifestyle. We deliberately refused to sell and even more so the production of non-natural products, alcohol and cigarettes, in order to emphasize that our products are for those who care about their families.

We do almost everything ourselves, even the packaging. The concept of the logo and packaging was developed by our in-house designer, and we produce the packaging at our own facilities.

We only buy raw materials. For example, milk is supplied to us from one of the farms in the Leningrad region, and first it goes to the laboratory. We specially purchased the necessary equipment, and laboratory assistants accept all incoming raw materials.

We are looking for suppliers both on the Internet and by calling farms. Sometimes we just go to the farming districts of the region, look around, get acquainted with the owners of the farms we like. Unfortunately, there is no single up-to-date this moment bases, an independent search is still more effective. When discussing cooperation with suppliers, we always inspect the farm: what animals are fed, how they are kept. If everything suits us and the farmer's documents are in order, we conclude an agreement with him. So far, we are working only with large farms, and we also plan to set up our own farm in the near future.

If we compare "Family Capital" with own brands large networks, the difference in price is immediately noticeable. Their products are usually in the economy class segment, but we cannot position our goods in this way. Even compared to third-party manufacturers, in terms of a liter or kilogram, our price is higher. But this is a very reasonable price for the quality offered. Moreover, it should be borne in mind that buyers will not find an analogue of our products from competitors, since natural products now they are sold only by companies specializing in this and are not sold in stores.

The experience of the first two stores of the network, which sold goods of other brands, shows that the demand for our products is far ahead of the demand for similar products from other brands. Therefore, now in all stores the assortment is represented only by our products.

Now we plan to produce 100% of everyday products under our own brand.

Packaging for private label products

Maria Adamova, Marketing Director of the holding "U2B group. Packing for business”, Zheleznodorozhny (Moscow region)

One of the most effective ways to get buyers to pay attention to the product is thoughtful packaging. Important point A: Packing your own brand products can't be expensive.

Who to entrust the creation of packaging for private labels

There are several options for organizing work on the creation of STM.

1. The network turns to a manufacturer that has all the necessary equipment for the production and packaging of private labels.
2. The network itself develops the production direction, that is, it creates the necessary capacities for the production of cakes, semi-finished meat products, etc. For this, equipment is purchased, including packaging, and all procedures are fully controlled. For example, for packaging in chain stores, the simplest thermal packaging equipment of the "hot table" type is used. The packaged product is placed on a pallet (tray) of the appropriate size, the tray with the product is wrapped with food stretch film (PVC) and sealed on a thermal table.
3. The network entrusts the development of packaging to a specialized company (outsourcing).
4. A large manufacturer has its own network of stores, through which it primarily sells goods under its own brand; accordingly, the packaging is developed by him independently.

Some European networks own not only large processing enterprises (for example, the meat industry), but also agricultural land. Thus, the entire production chain is under the control of the retail chain. The development of such a scenario is also possible in Russia: for example, in the fall of 2010, the Tander company (the Magnit chain of stores) invested about 8 billion rubles. in the construction of a greenhouse complex in the Dinskoy district Krasnodar Territory due to the fact that the leaders of the network were not satisfied with the work of fruit and vegetable suppliers.

Stages of packaging development

When developing packaging for private labels, it is necessary to proceed from consumer properties of products, requirements for shelf life, and market demands.

Stage 1. Collection of ideas. The store's special service responsible for bringing private labels to the market (or the relevant subdivision of the manufacturing plant) analyzes competitors' products and offers options for possible packaging. Ideas on how to pack a particular product can also come from suppliers of packaging materials.

Stage 2. Design development. The network can develop the design of private labels and packaging on its own or use the services of a branding agency. It is best if the design of the packaging, as well as its form, is developed at the launch of the brand on the market by a branding agency that has relevant experience with the product in this product category.

Surveys show that buyers recognize private label chains by two features:

• the name of the brand and the distribution network are the same;
• the packaging of the goods is designed in the corporate style.

For STM, the name of the network is taken. As a rule, networks first create private labels in the low price segment according to the principle “the quality is the same as that of the products of recognized brands or slightly worse, but the price is significantly lower.” The name of the brand is formed by adding to the name of the network a word indicating the price advantage of the product: Carrefour Discount. with discount), Tesco Value Tesco price). Later, STM is launched in the middle and high price segments. In the first of them, when naming a brand, only the name of the network is most often used (without qualifying words). And the name of the brand for premium segment goods is formed by adding a word to the name of the network, indicating the exclusivity, sophistication of products: Carrefour Selection. choice of Carrefour store), Tesco Finest the best from Tesco).

If the names of the network and the private label are the same, the attitude of buyers towards the store, as a rule, is transferred to the trademark. This makes it possible to more clearly control fluctuations in demand: if customer loyalty decreases, private label sales fall. I consider the STM of the Perekrestok chain of stores to be a successful example (the names of the brand and the chain are the same). The packaging design is made in concise style: on a white background - the name of the brand, a lot of space is allocated to the image of the product itself. Everything is quite simple, but at the same time, Perekrestok products are hard to miss on the shelf.

It should be noted that most chains produce under private labels both food products (dairy products, juices, semi-finished meats, chocolate) and non-food products, so the packaging design must be universal - then the network's advertising immediately applies to all goods produced under private labels.

STM has a unique name. The store does not always give its own name to private labels. For example, the French network Auchan has several private labels at once, the names of which do not say anything about belonging to the network: “Bed of Luck”, “Sweet Island”, “Our Meal”, etc. The design of the product packaging also often does not correspond corporate identity shop. In this case, consumers do not recognize the brand of the network, and this leads to fluctuations in demand and difficulties in forecasting it. At the same time, the release of a brand under a name that is different from the network one has advantages, because in the event of problems with the quality of some products, buyers do not transfer dissatisfaction with other products sold under other brands. Often this approach is used to create brands for economy segment products. However, the original name is also assigned to premium segment brands, and then the connection with the network brand is maintained at the design level. For example, this is the logo of the Auchan network (bird) in the design of the trademark Mmm!

• Trademark: how to register, use and protect

Practitioner tells

Danny Perekalski, Marketing Director of Dixy Group, Moscow

A special division is engaged in the creation and launch of private labels in the Dixy network. The design project manager is responsible for the development of packaging, he acts as a link between designers, manufacturers and partner printing houses.

The development of design and selection of packaging for each product takes place in several stages and takes one to two months. The packaging of all goods is made at specialized enterprises and printing houses, then sent to manufacturers who package and pack the goods.

93% of all private labels in the network are domestic products (the remaining 7% are imported: olives, olives, olive oil, wine, canned vegetables). To date, own trademark "D" has been assigned to 98 positions, among them - cereals, groceries, frozen berries and vegetables, canned vegetables, a line of snacks and dried fruits, fish preserves, olive and sunflower oil, drinking water, wet wipes. The packaging of products for different product categories under the “D” brand is designed in the same style, but we use additional color elements to highlight different products in one line. For example, carbonated and non-carbonated water "D" is indicated by different shades of blue.

Stage 3. Testing samples and ordering a trial batch

The manufacturer draws drawings and makes test packaging samples. When testing, the following characteristics are especially important: shelf life, appearance, safety during storage and transportation. The tested packaging option is approved by the expert commission of the manufacturer and the distribution network. The commission may include technologists, marketers, the head of the sales department. The decision is usually made by the CEO, or the commercial director, or the head of the marketing department. Then a small batch of packaging is ordered, and the products appear on the shelves of the network. If the product is in good demand and there are no problems in the entire distribution chain, they move on to large batches.

What types of packaging are used most often

The choice of the optimal packaging option, of course, will depend on the properties of the product. So, for the convenience of storing food in the refrigerator or heating in a microwave oven, packaging made of frost-resistant or heat-resistant materials is chosen. Such properties are possessed, in particular, by polyethylene terephthalate (PET). It is also often used to make packaging for carbonated drinks, butter and any dairy products. So-called doy-packs are produced from PET film laminated with polyethylene - bags with a lid and a bottom for packaging mayonnaises and ketchups. When packaging fish and meat products, PET films are mainly used for cutting.

Popular with domestic manufacturers and polypropylene. The film from it is suitable for packaging bread and bakery products, vegetables, fruits, flowers and other goods.

Dairy products in the Russian market are presented in cardboard boxes, plastic bags or bottles, while in Europe, paper and cardboard packaging is preferred because it is more environmentally friendly . Manufacturers try not to use glass: its fragility and weight create problems during transportation. In addition, the leakage of glass containers does not allow the product to be stored for a long time (see also: Examples of convenient packaging of goods under private label).

Examples of convenient packaging of goods under private label

Canned foods can be packaged in easy-to-open keyed tins. Bottles with vegetable oil should have special dividers so that it is convenient to pour the contents. Bags for cereals can be equipped with convenient valves for re-closing.

Other options for convenient packaging are shelf ready packaging (English - packaging ready for display; the product is packed in boxes and put on the shelf in this form) and multi-pack (English - containers for several items combined in one package; example - 12 bottles in a package with a handle for transport).

How to reduce private label packaging costs

The share of packaging costs in the cost of a product can range from 1 to 10% and even more: fluctuations depend on the packaging materials and equipment used. For almost every type of packaging, you can find the best solution in terms of quality, cost and attractiveness for the buyer.

An example of savings due to equipment and materials. When packaging bakery products, the cost of packaging in a bag with a clip can be 10%, and when packaging in polypropylene film - 1%. However, one should not forget about the cost of packaging equipment. So, for packaging in custom bags, you can get by with a small and inexpensive clipper, and for packaging in film, more expensive equipment is more likely to be required.

You can save money by optimizing the operation of the packaging equipment and choosing the most suitable material. Let's compare two types of shrink film - polyolefin and PVC. A 15 micron thick PVC film has a density of 1.35 grams per cubic meter. cm, and the density of a polyolefin of the same thickness is 0.92 g per cu. see Therefore, in a polyolefin roller weighing 20 kg there will be approximately 40% more film than in a PVC roller of the same mass. Moreover, the 15 micron polyolefin film can be used instead of the 20 micron PVC film, which provides an additional benefit.

If you use plastic packaging for confectionery, then in some cases you can choose options from thinner plastic (while its density should be sufficient for storage and transportation) and save up to 15% of packaging material.

An example of design savings. Reducing the number of colors in the original design often does not affect sales, but saves on the production of packaging materials. So, if you are going to pack bread in polypropylene film with the symbols of your company and have purchased horizontal packaging equipment, then factors such as the number of colors in the package, the area and saturation of the filling, circulation will be important for the cost. By optimizing each of these factors, film costs can be reduced by 20%.

Practitioner tells

Kirill Murzepp, Director of Private Label Management, Lenta, St. Petersburg

Packaging for private label goods, as well as the product itself, is produced at the supplier's enterprise. We include in the annex to the supply agreement the requirements for the material, size, strength, safety of packaging and its labeling.

The cost of packaging and its share in the price of goods depend on the category of goods. For example, the cost of packaging bakery products in polymer bags with a company logo is minimal. Packaging design for cheap goods is simpler: it should be concise, since buyers are attracted primarily by the price, not the design. In our stores, this is the trademark "365 days". Packaging of goods of the middle and high segment requires the designer's painstaking work: when purchasing goods of these categories, the buyer first of all focuses on the attractiveness of the package, and then evaluates the composition of the product, its taste, etc. Moreover, high segment private label products compete on the shelf with goods -analogues of leading companies and, therefore, must have an attractive appearance. For example, in our stores it is confectionery by Dolce Albero: the design (stylish logo on a light brown background) was developed in such a way that consumers distinguish this product as a premium one.

Expert advice

Alexander Tremasov, General Director of the network of printing houses "Tremasov", Ivanovo

Developing a design project own products, you need to determine exactly who you are targeting, what emotions you want to evoke in the buyer, and based on this, think through all the details. The correspondence between the presentation of the product and its price is very important: a simple or too contrasting design is more likely to be associated with economy class goods, while the presence of small elements and deep colors inspire more confidence in the quality of the product. If the product looks more expensive than it costs, the buyer will decide that this is a hoax, just as in the opposite situation.

Our company works with several private label manufacturers. In addition to custom printing, we also offer designer services. Quite often we encounter the fact that the customer comes with a requirement something like this: "Do this for us - we have such a common design." But we see that the layout he offers is already very outdated, buyers will not have any interest or trust in it.

People love new things. In order for the product to be always in demand, it is necessary to constantly change the packaging design. But it is important to do this correctly so as not to scare away buyers with their hypertrophied novelty. We have customers who constantly change the design of products, but only slightly, so that the buyer continues to recognize their product. Some people order two types of packaging for the same product at the same time.

Now we are preparing a packaging design for meat products. It took a lot of work to convince the customer to change the design, but as a result, the packaging looks much better and matches the price.

ZAO Sistema T3S
Year of foundation: 2007
Staff: 60 people
Type of activity: concludes supply and marketing agreements with federal suppliers, coordinates and consolidates centralized orders, purchases and deliveries of products for retail chains
Structure: within the framework of the Federal Purchasing Union, Sistema T3S CJSC operates 48 chains with a total number of stores of more than 1,800 and a consolidated trade turnover of about $1.9 billion. The total area is approximately 700 thousand m2; daily customer flow - more than 2 million people

Family Capital LLC
Year of creation: 2011
Number of stores: 8
Staff: 16 people
Area: from 20 to 50 m2
Turnover and profit: not disclosed

LLC Network of Printing Houses Tremasov
Year of foundation: 2002
Staff: 33 people
Services: custom label printing for products, production plastic cards(including discount and payment), certificates, plastic price tags, etc.

Maria Adamova Graduated from the Vyatka State University for the Humanities with a degree in marketing and advertising. He has been promoting the company since 2006.

U2B group LLC. Packaging for business»
Field of activity: production of packaging, supply of equipment and packaging materials
Territory: head office - in Zheleznodorozhny (Moscow region), representative offices - in Moscow, Yekaterinburg, Izhevsk, Yoshkar-Ola, Kazan, Kirov, Naberezhnye Chelny, Perm, Syktyvkar, Ufa, Cheboksary, Chelyabinsk
Number of staff: more than 200
Number of company clients: more than 6,000 food industry and trade enterprises

Lenta LLC
Territory: head office - in St. Petersburg; regional offices - in Moscow, Volgograd, Nizhny Novgorod, Novosibirsk; 68 hypermarkets and 7 supermarkets operate in 39 Russian cities
Number of employees: 22,000
General trading area hyper- and supermarkets: 445,000 sq. m

GC "Dixie"
Field of activity: retail food and daily commodities
Number of employees: about 40,000
Sales area: 583,583 sq. m
Revenue: RUB 147 billion

Shrink films are polymer films that can shrink and tightly fit the product under the influence of temperature.

Horizontal type equipment is used for packing piece food and non-food products in a three-seam bag of the "pillow" type, which is formed from a roll of film. This type of equipment is also called flow-pack (English) flow packing). The packaging process on horizontal type machines is high-speed.

) have long become an instrument of retail chains in the struggle for a buyer. At the beginning of 2017, the share of private label goods in certain categories increased by 25%. The share of private labels in the children's goods market is growing rapidly. In particular, according to research by RBC, the share of STM GK « Child's world» (clothing and footwear) already exceeds 70%. Meanwhile, in the last two years there has been a fierce "war" between private labels and branded products for promotions.

Producer benefits from private label orders

Private label products are beneficial for retail chains, said Andrey Karpov, Chairman of the Board of the Russian Association of Retail Market Experts (RAERR). According to him, the retail network, when ordering private label products from manufacturers, does not spend money on its promotion, on other expenses typical of the manufacturer. Accordingly, the profit from the sale of such products is higher.

According to Karpov, it is important for the manufacturer to load production at 100%, so orders from private label networks are beneficial to him. At the same time, the manufacturer can produce in parallel products for retail chains, its own brands, as well as for third-party manufacturers.

Brands VS STM

In 2017, there was a trend when the once-growing private label market gave way to a brand from a manufacturer sold through a promotion, said Nikolai Moskvitin, Senior Consultant, Consumer Panel Research Department, Gfk Rus. Sales of brands on discounts were quite strong. This confirms the popularity mobile applications, with the help of which buyers "hunt" for discounts in different stores.

Nikolai Moskvitin noted the clear leadership in sales of branded products in the category of canned vegetables. In particular, at the beginning of 2017, this category grew by 7%. Moreover, the main growth was given by branded products at a promotional price. Thus, sales of canned corn from the manufacturer at a promotional price increased by 19%, while sales at a regular price fell. At the same time, private label sales also sank 5%. “The reason is the price. For example, canned corn in STM costs 39 rubles, and branded at a discount - 32 rubles. The buyer in this case chooses the brand,” he said.

Reference:

The private label (Private Label) marketing phenomenon dates back to 1869, when the first Sainsbury's store opened in London, offering customers bacon labeled with the store's name. A hundred years later, the French chain Carefour began to produce groceries and essential goods without any name. They were cheaper than analogues.

The history of STM in Russia has about 16 years. Thus, in 2001 Ramstore supermarkets for the first time in Russia appeared their own brand products. Later, the Perekrestok retail chain began to produce several types of goods under the brand name of the same name. Then this trend was supported by Dixy, Lenta, Pyaterochka.

Demand for private labels is growing – retailers

Retail network "Ribbon" will continue to increase the range of goods under private label, as the demand for inexpensive quality goods is constantly growing, the retailer's press service reported. Today, the retail chain produces more than 2,500 SKUs of food products under the private labels 365 Days and Lenta, of which more than 800 replenished the private label portfolio in 2017, as well as more than 2,200 non-food products. The total share of SMT in the company's turnover is at the level of 12%. In 2018, Lenta plans to further expand its private label range in various product categories and price segments, the retailer's press service specified.

In the briefcase "Ashana" more than 3,300 private label products produced in Russia, said Hope Paderina, Procurement Director of private label "Auchan" during the NRR-2017. According to her, this figure does not include imports of private label products from other countries. Private label production contracts have been signed with more than 400 domestic producers. Thus, every fourth item in the shopping cart is a private label. It's about both about products of the economy segment of private label, and about goods of the middle price segment.

According to Paderina, sales of private labels are growing in Auchan in the categories of poultry, cakes, pastries, stationery, textiles, cooking. This is due to the fact that in some categories, for example, “poultry”, “cakes and pastries”, the retailer offered customers more economical packaging and changed the format of products. At the same time, product quality is a paramount value for a retailer, Nadezhda Paderina emphasized.

Roskachestvo investigated STM

Positive reviews about the quality of private label products from retailers do not always correspond to independent research and expertise. So, in the New Year's research Roskachestvo of crab sticks, clostridia were found in the private label products of four brands of large chain stores, which can cause eating disorders. The violators were crab sticks of private brands: "Red Price" (STM of the network " Pyaterochka”), “First of all” (STM “ Dixie”), Aro (STM Metro), Horeca Select (STM Metro).

Also, after a study by Roskachestvo of cottage cheese, it turned out that mold, starch, wheat fiber, as well as antibiotic residues were found in the products of the Red Price trademark (Pyaterochka private label chain). It should be noted that this was the only representative of STM in the position of "cottage cheese" in this study.

According to Andrey Karpov, in Russia, the pricing policy for private label products is usually lower than that of the manufacturer's analogues, while there are questions about the quality of goods. “In this, the Russian STM differs from the European one. There private label competes not only and not so much in terms of cost, but in terms of quality. And a European is ready to buy a private label product at a higher price, because it is a guarantee of the quality of the chain,” Karpov said. Note that private label products are divided into classes. In particular, private labels are produced in the economy segment, the middle price range, as well as the premium class.

STM or Private label- Own Trade Mark of the company, which, as a rule, operates in the retail segment and has an established sales network. Production of private label products is transferred to a third party production company, allowing the private label owner to focus on marketing and sales. It is customary to assume that private labels are the destiny of large retail chains. But this is far from true. The main condition for private labels to be economically justified is the presence of a well-functioning retail distribution network, their own client base (wholesale or retail is not so important), capable of selling the minimum contract lot.

The minimum contract lot of cosmetic products is 100 kg of cream formulations, 300 kg of foaming products

The further development of your brand depends entirely on the promotion strategy you choose. As an example, by starting work with private labels and placing an order at our production, you have the opportunity to set a lower price for these products or set them at the level of competitors, laying the financial foundation for the formation of an advertising budget. Then in the first case you are able to implement a strategy of low prices and supplement your product range with your own line inexpensive products. And in the second - to engage in full-fledged creation of a brand that meets your visions and expectations.

Our company has been developing and manufacturing products under its own trademarks and under contract manufacturing for 12 years. 2 research laboratories, highly qualified staff with many years of experience allow you to realize your ideas and be a reliable partner in the production of private label products within the framework of contract manufacturing. Our contract manufacturing involves, in addition to direct manufacturing services, also, if necessary, preliminary development of a recipe, recommendations and selection of packaging, certification, assistance in marketing campaigns (co-packing, 2 in 1, etc.).

What benefits does the STM Customer receive?

1. More income

2. Growth of the company's status in the eyes of customers

3. You invest only in yourself and in your development

4. Own production and own products without investment in production

5. Test pen

When STM is inappropriate:

• The volume of sales of goods is below the minimum contractual volumes
• You are ready to immediately develop your own production (invest in equipment, maintenance of space, personnel, etc.), you have pre-orders and therefore are confident in the success of this direction.

What is needed to launch private label (private label)

Your own trademark is your trademark, your additional income and your status!