30 November 2006 I Food industry drives private label growth in Romania

 Countryside

Private label branding in the Romanian food and beverage industry has helped to drive massive growth in the sector, as retailers, packagers and processors benefit from increasing competition in the market.

According to figures by marketing information group AC Nielsen, the success of a wealth of private label foods and beverages, has driven continued growth in the industry.

In the findings, the group revealed that sales of private label goods in the first half of 2006, grew by 56 per cent over the same period in 2005. Processed cheeses, herbs and seasonings as well as alcoholic beverages like Beer and Vodka, all saw large amounts of growth in sales.

The Private Label Manufacturers Association (PLMA) told CEE-Foodindustry.com that the growing demand for private label brands in Romania was a result of consumers looking to cheaper alternatives to more expensive big name brands of their favorite foods and drinks.

"Consumers in Romania don't have extra money to waste on high priced products. Private label goods offer the consumers the possibility to buy products with good quality at the best price and that will give a positive effect on the market growing," they said.

The association added that the growth reflected the opening of markets for food processors and producers in Eastern Europe where market reforms are offering consumers a greater choice of consumables.

"Just like the experience in Hungary, Czech Republic, Slovakia, Poland, as a country modernizes its distribution system plus creating hypermarket and supermarkets, private label goods will grow. Historically the amount of private label goods offered is directly reflected to size of supermarkets," they said.

Though private label goods in the food industry may be a relatively new development to food industry's like those in Romania, the association believes that private labels are helping to encourage diversity amongst consumers.

This in turn has offered a wealth of opportunities for processors and the wider food industry in the country.

"Obviously nothing is long established, until 5 or 10 years ago the government controlled the market. Now you find an open market where companies are able to compete and private labels can penetrate," they said.

 Source: CEE FoodIndustry