Private labels are gaining momentum in Brazil
Private Label Brands: A Key Competitive Strategy in Brazil’s Retail Landscape
Private label products are rapidly becoming a critical point of competition in Brazil’s retail market, particularly between traditional supermarkets and the rising popularity of cash & carry stores. These store-branded products offer a strategic way for retailers to appeal to price-conscious consumers while maintaining profitability.
Current Landscape and Growth Potential for Private Labels in Brazil
Private labels are gaining momentum in Brazil, but they still have a long way to go. In major retailers like Carrefour and Grupo Pão de Açúcar (GPA), private label products make up around 20% of total sales. However, across the broader market, this figure drops to just 2%, compared to the global average of 23%.
This gap presents a significant opportunity for growth. Since 2018, major players like Carrefour and GPA have seen a steady increase in private label sales, which has helped them compete with the fast-growing cash & carry format. These stores, with their simpler layouts and lower operational costs, have seen remarkable expansion, growing fivefold from 2013 to 2023.
Private Labels: A Strategy to Retain Customers and Compete with Discount Stores
Private labels are not just a tool to lower prices; they also help build customer loyalty. Retailers like GPA have focused on creating high-quality private label products through their Qualitá brand. By offering premium products at competitive prices, they’ve successfully attracted more affluent customers, driving up foot traffic. Customers who buy Qualitá products, for example, visit Pão de Açúcar stores 2.4 times more often than those who purchase third-party brands.
While cash & carry stores often offer lower prices due to their minimal service model, private label offerings give supermarkets the edge in terms of product range and quality, providing customers with more value for their money.
Challenges and Opportunities in Expanding Private Label Market
The private label market in Brazil faces some challenges, particularly in the cash & carry sector. Despite the growing popularity of private labels in supermarkets, cash & carry stores still account for just 0.6% of private label sales. These stores are slower to adopt their own brands, primarily due to their focus on offering lower prices through bulk purchases rather than focusing on a diverse range of products.
Private Label Brazil: Connecting the Retail Market and Driving Innovation
Private Label Brazil is Latin America’s premier event for private label and outsourcing solutions, held annually in São Paulo. Now in its 8th edition, the event brings together industry leaders, retailers, and suppliers to explore the latest trends, innovations, and opportunities in the private label sector. It’s an essential platform for networking, knowledge exchange, and discovering new business opportunities.
In addition to the main event in São Paulo, Private Label Brazil also organizes a regional version focused on the North and Northeast of Brazil, held in Fortaleza, Ceará. This regional edition provides a unique opportunity for local retailers and suppliers to connect and explore solutions tailored to their specific markets, driving further expansion of private label products across the country.
Conclusion: The Future of Private Labels in Brazil
As the demand for high-quality, affordable products continues to grow, the private label market in Brazil has immense potential. Major players like Carrefour and GPA are already capitalizing on this opportunity, while smaller regional retailers are beginning to explore private labels as a way to stand out in a crowded market. With events like Private Label Brazil leading the way, the future of private labels in Brazil looks bright, providing new opportunities for both large and small retailers to expand their offerings and grow their customer base.
Read About: PRIVATE LABEL BRAZIL the most important event in latin America for Private Label and Outsourcing.
Text Adapted by: Rhennan Caldeira
Source: Iuri Santos, InfoMoney.
