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Close up of salty snacks in food factor production line.
According to the BCMPA – The Association for Contract Manufacturing, Packing, Fulfilment & Logistics, while many consumers are seeking value in the products they buy, as they continue to grapple with ongoing cost of living challenges, many are not prepared to compromise on quality. As a result, although BCMPA members are reporting a marked intensification in retailer efforts to keep prices down, this has not yet led to the deprioritising of other key shopper values such as ethical sourcing or sustainability.
As BCMPA CEO Emma Verkaik explained, one of the results of this has been the emergence of ‘smart value’ own label food products: “These provide reliable quality at a lower cost, while offering improved taste, greater variety, such as plant-based options, and sustainable packaging. Indeed, members say they are now seeing more innovation in own label ranges than in previous years.
“At the same time, brand owners are also responding to this situation, maximising the emotional trust and loyalty that they have built up with consumers over the years through product enhancements, or discounts and promotional offers to support their established quality image.”
In both cases, said Verkaik, the services of the outsourcing sector are crucial: “Contract manufacturers and packers provide agile, efficient, and scalable solutions that enable businesses to launch trend-led, sustainable, and innovative products without compromising on price competitiveness. They can also help to create additional value for established brands through product development, efficient production, and packaging innovation, allowing them to remain competitive and deliver effective in-store promotions.”
While much of the growth in own label has been focused on the food sector, the BCMPA said that other categories, such as alcoholic drinks and personal care products, which in the past have been dominated by brands, are also now providing opportunities.
“This demonstrates how own label is no longer being seen as a budget alternative, but a credible quality choice,” commented Verkaik. “Certainly, BCMPA members are experiencing increased interest in non-food areas, and they have the ability to bring such products to market quickly and efficiently.
“This has been reinforced by feedback from recent trade shows, where customers emphasised the importance of delivering value, relevance, and innovation to meet consumer demands for both quality and affordability. Outsourcing is often at the heart of this evolution, offering flexible, efficient, and fast-response solutions to help maximise success for both branded and own label products.”