Editorial: Private Label CSD
Beverage Industry’s 2008 Soft Drink Report on page 18 points out that because of the discounting, consumers are price savvy and have a certain idea of how much a case of their favorite CSD “should cost.”
“Because of pricing we’ve commoditized some of our branded products to such a degree that I think that consumers have really lost the value equation with a Pepsi vs. a private label soda or a Coca-Cola vs. a private label soda,” says Bump Williams, executive vice president, general manager for IRI Global Consulting.
Private label CSDs add another dimension to the pricing situation. While private label CSDs retained about the same share of the CSD category last year, and they can force competitive pricing, retailers still need the higher margins and higher spending clientele that branded products bring to their stores.
Some major retailers are re-examining their private label businesses and realizing that if they want to capitalize on premiumization, trading people up or attracting new clientele to their stores, they need to work with both branded and private label products, Williams says.
“They are going to be reassessing their shelf space they dedicate to national brands and private label brands,” Williams says. “... People still really take pride in having a branded soft drink in their hand vs. drinking a ‘Bump Soda.’ I don’t think you can take away from the hundred of billions of dollars that the major soft drink companies have invested in building that brand loyalty.”