Kenya’s ‘Private-label’ Rush

Kenyans are unique in their own ways. Kenyans are known to be early/ quick adopters and are always willing to try new things. This characteristic is evident in their day to day life’s including how we market our products and also our consumer spending habits. See how fashion trends and mobile phones have evolved in the last few years in the country

In the last few years, more supermarkets are being established at every other corner and in the estates. This has continued to push out kiosks out of their businesses. As way of trying to pull customers and ensure they retain customers, supermarkets have come up with different business development ideas including ‘private labels’ brands.

For those who don’t know what ‘Private label’ means…it’s a way of retailers having stocks under their packaging and brand name. It’s meant to increase brand loyalty. In Kenya almost all retailers have taken queue. Most have branded rice, Sugar, bread, Water and even cereals.

How it happens. Since a retailer is not in the production business, he engages a manufacturer who produces a certain product and packages it according to retailers approved branding and specification.

Supermarkets love own-label because they often make better margins than on branded products. This is bad news for new producers who need to get on their shelves to reach the mass market. Supermarkets can also let small food companies take risks with new products, then replicate them in a cheaper format if they’re successful. Research shows shoppers are more than happy to switch back to normal/ national brands if they are available at a similar or better price than the equivalent private label product.

Consumers still don’t trust own-label soft drinks, and would prefer to buy branded crisps and snacks than supermarket labels. In fact, it may only be a matter of time before own-label wine breaks through to respectability too, as the supermarkets learn how to tweak the way alcohol is packaged. Rather than a bottle “provided by” a supermarket, wines are now often “selected for” a retailer to help partially retain its snob value.

This rush however has its own implications to the Kenyan manufacturers, retailers and consumers alike, it all depends on how best you manage it from inception.

Contact Retail Worth for more info and analysis. We guide you to leverage all the comparative advantages.