Recession fuels private label beverages

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BASINGSTOKE, ENGLAND — The global economic downturn is providing perfect conditions for private label beverage products to grow and thrive, according to beverage research agency Canadean. In fact, private label products in the total soft drinks sector now account for more than 1 out of every 10 liters traded in the global marketplace.

The rise of private label is becoming a considerable threat to branded soft drinks. The shift from on to off-premise sales has boosted the private label segment as well. While there are fewer consumers ordering beverages in bars and restaurants, consumers are compensating for this by drinking more at home and buying soft drinks in the off-premise, where the majority of private label products are found.

There also is a trend for convenience retailers to adopt their own private label brand with many fast-food chains and sandwich stores doing just this. Overall, how vulnerable the soft drinks category is to private label alternatives depends on various factors, which has resulted in varying levels of private label penetration across the sports drink spectrum. Juice is more susceptible than other categories because it is a relatively mature category and many juices are difficult to differentiate in terms of taste. As a result, almost a quarter of all juice volumes are private label.

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