Raise a Glass to PL Beverages
Coop’s deep-slash private label X-tra includes cola, while the ‘Coop’ brand offers a lemon-lime product labelled as Spirit.
Irma’s line of coffees leads the pack.
Across the board, the PL concept is on the rise in Denmark and PL drinks are rising with it. While there is limited innovation in introducing new products, there is dramatic innovation in the presentation of staples and trend items.
Danish retailers have been actively promoting their private label platforms in the recent past. While the Coop Danmark outlets and their Irma chain have long enjoyed huge success with their PL lines, Dansk Supermarked Group has had great success defining and promoting its PL program. Other companies have PL concepts, but the two big players above have truly put PL into sharp profile.
When it comes to beverages, Coop’s Cirkel and Irma coffees stand out as high-profile PLs that beat the brands. Both could safely be called icons, launched many years ago when PL was the norm. Other PL beverage categories consist mainly of staples, with some newer trends appearing in the past 20 years. The most notable would be sodas, as consumption has risen drastically in the period. Promoting healthy drinks would be the latest comer to the market.
On the Rise
Supermarkets have been increasing the number of PL products on their shelves, and consumer response has been positive. While the consumer, as a rule, saves money by opting for a PL item, the actual purchase is to a larger degree based upon loyalty and trust in the retailer.
Dansk Supermarked Group and Coop Danmark have the lion’s share of the Danish market. Each holds just over one-quarter of the market: DSG with its Føtex and Bilka super- or hypermarkets, and Netto deep-discount outles; and Coop with its Brugsen supermarkets, Kvikly hypermarkets, Fakta deep-discount outlets and the Irma upscale supermarket chain concentrated around the Copenhagen area. Coop Danmark is associated with the pan-Nordic Coop group having a larger degree of common purchasing and PLs. The SuperBest chain has grown to more than 220 outlets in the past few years, following some consolidation and an affiliation with the Dagrofa group.
SuperBest has just under 15% market share. Spar’s smaller supermarkets and convenience stores, and the foreign deep-discount chains Rema 1000, along with Lidl and Aldi of Germany split up much of the remaining share.
In a survey done by the national Danish agriculture and foods agency, the results indicated increased demand by consumers to know the source of a product before making a purchase. In the case of drinks, it was surprising to note that 10% of men want to know who produced a product as compared with just 1% of women. PL products often do not have sufficient (or at least clear) declarations about the producer of the item. How much of an obstacle, and how retailers will address the issue—if they do at all—remains to be seen.
Soft Drink Share
As mentioned, consumption of soda has risen markedly, especially since TV advertising was legalized in the mid-‘80s. To be sure, the brands muscled in and grabbed share, but retailers saw the light and responded using price as the hook.
Coop’s deep-slash PL X-tra carries cola, cola light (low-cal), orange, lemon-lime and sport sodas. The items come in two-liter bottles sold at roughly half of what 1.5 liters of a brand costs. An X-tra iced-tea product comes in a 1.5-liter carton for about the same price as a 33-cl bottle of a brand.
The company’s ‘Coop’ PL has a similar line, with the lemon-lime product cleverly labelled as Spirit. The 1.5-liter bottles are priced at around 30% under the brands. Both PLs also carry soda water at attractive prices.
The company recently launched the products in 33-cl cans, the first PL retailer to do so. To complement the line, Coop launched a new series of fruit sodas with 12 SKUs in flavours such as lemon, pineapple, grapefruit and apricot. Both labels also have apple and orange juices.
Fruit concentrates have always been a household staple. The products come in bottles or cartons and are mixed with water. The Coop PL has three newer items, Wild Berries, Pineapple and Black Currant concentrates.
A Matter of Princip(le)
Coop’s beer newcomer Änglamark is an organic beer in pilsner or classic. Below: Coop launched a new series of fruit sodas, seen here is currant flavoured soda.
DSG launched the Princip! PL around five years ago for its Føtex and Bilka stores, and the PL has grown ever since, now with more than 100 SKUs. It is clearly a strongly-profiled label pitted directly against the brands under a banner of “quality.” The image is up-market, though shoppers find savings when choosing the PL. The main DSG website has a special, flashy, Princip! website where consumers can learn about the products and find recipes. The site has explanations of label declarations so readers can get some in-depth knowledge of the PL and specific products.
In the area of hot drinks, Princip! features three teas, organic white- and green-tea products, along with an Earl Grey. To illustrate how the Princip! website supports the label, a click on white tea, for instance, shows the product, tells about the source, explains taste and aroma characteristics and tells you how to make it. The line also carries around half a dozen estate coffees, whole beans in 250-gram packages and pre-ground in a 400-gram size.
A couple of newer cold-drink products also feature on the site and in stores. Princip! cold-pressed apple juice has proven to be a hit. Danish consumers have been turning to cider in recent years, as an alternative to beer or wine. Princip! has two ciders, apple and pear, in the line. Once again, the website information tells about the Swedish source and presents an appetizing introduction to the product.
No Boos for Booze
Beer and akvavit were once the ubiquitous, traditional drinks of choice for the Danes, but wine and–to a lesser degree–ciders have taken a big bite out of an age-old table tradition. Supermarkets have vastly increased their wine selections in the past two decades, and now sell the major volume of the drink.
Despite a sales decline, beer remains king. PL beers are as a rule sold far under the price of brands, generally at half the price. Coop has marketed its PL beer, Pokal Pilsner, for many years, adding a Classic brew to complement the pilsner and premium beers—along with an NA brew. The ‘classic’ concept—a pilsner with a bit more body-- appeared via a national brand around 20 years ago and PLs have followed suit.
A newcomer to the shelves is their Änglamark beers, a pilsner and a classic pilsner. The brew is organic to fit in with the Änglamark line of organic and/or fair trade items. Organic beers have had marginal success on the market, but the strong PL may push this one. Crafted beers flooded into the market from abroad and domestic brewers several years ago. Irma carries a limited line of Økologisk Balance, organic brews that would fall under the craft beer category. Netto carries a line of Harboe beers that include a couple of standards and premium brews, along with seasonal beers. Price is the mover, as 24-33 cl-bottle case of Harboe can cost less than a one-liter bottle of a craft beer.
Hot Stuff
Coffee is the area where PL beverages truly stand out, with Coop’s Cirkel and, especially, Irma’s line of coffees leading the pack. In both cases, the company has introduced instants, de-caf instant, luxury estate coffees (ground or whole-bean) and fair-trade items. Irma’s coffee section of stores is dominated by a slew of PL products, while other Coop outlets have a broader selection. As to the latter, PLI noticed in one store that Cirkel coffee did not have center stage on the shelves. Irma and other Coop outlets have had success with estate coffees, too, marketed under the outlets’ names, though the labelling is discrete.
Netto’s Amora PL is another blockbuster in PL marketing, with 40% share of coffee sales. Amora has regular coffee in 400-gram bags, and instant and an organic-fair trade product at a slightly higher price.
SuperBest has a limited number of PL drinks in its Best Discount and First Price lines. Best Discount has a standard pre-ground coffee and an instant that cost around half the price of a brand competitor, but the line also has a creamer and coffee filters under the same label. Spar, also a member of the Dagrofa constellation, has coffee and some sodas under its eponymous label, though some outlets feature Best Discount as well.
Coop’s Änglamark has firmly established itself in all categories, and organic hot drinks is no exception. The line features standard coffee, two instant coffees, regular and de-caf. The latter comes in a jar or a 200-gram bag for refills. Conserving resources in packaging is incorporated into this line of health and ecology-minded products. Consumers also find a selection of four teas in the Änglamark line, along with fair-trade cacao and a chocolate drink.
In the tea area, two tendencies emerge, either low-priced items like the two X-tra products at roughly half the price—as it is with X-tra coffee—of the competition; or, retailers market exotic estate teas. Spanning all price segments is an effective means of merchandising the PL assortment.
