Own label takeover: Your brand is the best defence

The cost-of-living crisis continues to reshuffle the UK grocery aisle, and shoppers who once automatically reached for branded goods are increasingly choosing the supermarket’s own version. According to the British Retail Consortium, own-label now accounts for more than half of grocery sales in the UK, and that share has only grown as household budgets remain under strain.

For food and drink brands, particularly challenger brands without decades of legacy or loyalty behind them, this is an urgent reality. The question is: how do you compete when you simply cannot match on price?

The answer, perhaps frustratingly, isn’t found in pricing strategy at all. So here are a few examples of who we think are balancing the price vs. brand consideration the right way.

Mutti does everything they say on the tin and more.

Mutti is perhaps the clearest example of a brand doing exactly what price cannot. In the canned tomatoes aisle, own-label alternatives sit at around 30/60p for a 400g tin. A tin of Mutti Finely Chopped Tomatoes is more expensive than many other tinned tomatoes on the market [1], typically £1.60 at Tesco, rising to over £2 elsewhere. That’s three to four times the price of the supermarket equivalent for a fundamentally identical product category: chopped tomatoes.

So why do people keep buying it? Mutti has been pioneering smart preservation techniques for well over a century, when the family first started growing tomatoes outside of Parma in the mid-1800s [2]. That provenance is all over the packaging and fundamental to the exceptional taste and quality. The two-lioncrest, the Italian heritage, the claim of being Italy’s number one tomato brand. Every element of the label is doing brand work before the product is even tasted. There was a time when Mutti wasn’t easy to find in the UK, but major retailers including Tesco, Waitrose, Sainsbury’s and M&S have all started stocking it to because consumer demand created by their quality and brand reputation pulled it onto shelves, not discounting.

M&S Food, the own label that behaves like a brand.

M&S is a fascinating counterpoint because they sell almost entirely own-label food. Yet it doesn’t feel like own-label at all; it feels like a brand in its own right. One of its most iconic campaigns is the “This is not just food, this is M&S food” series, which highlighted the quality and luxury of M&S’s offering through visually stunning, almost cinematic advertisements, significantly enhancing their image as a premium food retailer [3].

Throughout troubled times for the UK high street, M&S has been determined to maintain its price premium, even as competitors slashed costs to the bone [4]. That decision, to stay in brand rather than chase price, is exactly what protected its position. No shopper standing in M&S Food thinks they’re buying own label. They think they’re buying M&S. The retailer’s name is the brand, and decades of consistent communication around quality, occasion and indulgence have made that name worth something.

The ‘Waitrose Effect’ is proof that branding can change perceived reality.

Waitrose offers perhaps the most striking proof point of all. The dubbed “Waitrose effect” refers to how the store’s upmarket reputation leads shoppers to believe its private label products are of higher quality than identical own-brand items from other supermarkets, even when the items are objectively the same. One study found that consumers rated identical own-brand goods from Waitrose as superior to the same product from Asda [5].

That’s not product quality doing the work. That’s branding. Waitrose’s No.1 premium range saw a 26% year-on-year sales increase [6] after a major packaging and brand overhaul, without the products themselves changing. The lesson for challenger food brands is significant: perception of quality is shaped by how you communicate, not just what you make.

What can we see?

Your brand, brand positioning and what you communicate can win in the battle to the bottom when it comes to price. Whether it be the provenance of Mutti or the identity crafted by M&S, it’s clear that a well-built brand story fosters loyalty. Despite the ongoing price sensitivity, consumers remain impressionable by ‘brand’, and price isn’t everything. So, we can see the opportunity for communications to rise above the price battle and be victorious with brand power.

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