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3 - 5 November 2020
Dubai World Trade Centre

The Future of Private Label in Africa

The Future of Private Label in Africa

Private label is part of a bigger trend as supermarkets become more proactive.

In this report, you will find the current outlook of the food retailers in Africa and the Private Label market penetration

Keep reading to find out opportunities in Africa.

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SUPERMARKET SHARE OF GROCERY

Supermarket penetration is low except in southern Africa. But it is growing rapidly and is becoming increasingly competitive

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INCREASING COMPETITION & GROWTH OPPORTUNITIES FOR RETAILERS

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2000+ stores across 14 countries, market leader in several (e.g. South Africa, Nigeria, Angola)

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On track to become the largest retailer in Egypt and Kenya by 2021

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720+ stores in Egypt and Morocco and growing rapidly

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Market leader in Senegal, 150% revenue growth year on year

COMPETITION PROFILE

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Although modern supermarket retail penetration is low, in the major city most countries have at least some small chains

dot Several competitive national chains

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Some national chains

dotSome small, localised chains

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Few supermarkets, some small chains

dotFew supermarkets, no chains

DO CUSTOMERS CARE ABOUT BRANDS?

yes

✔ Trusted, often through generations

✔ Guarantee of quality

✔ Status symbol

✔ May be more consistently available

✔ Retailers sometimes seen as price gouging

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no

✘ Brand knowledge often limited

✘ Lots of counterfeiting in some categories

✘ Status symbol limited for basic items

✘ Brand availability varies wildly

✘ Budgets are tight so the price will win

Great news for Private Label brands! A growing opportunity to capitalise on consumers willingness to try lower-priced, quality-driven products

MOST PROMISING MARKETS IN AFRICA

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MARKET WATCH

  1. Regular supermarket shoppers are less than 5% of the population in most sub-Saharan African countries
  2. The value will remain the key growth driver for the foreseeable future. But: budget imported private label often becomes premium in the market because of markups
  3. Watch the development of discounters  and value retailers (e.g. Supeco, Choppies, BIM)
  4. Domestic supermarket players have poor supply chains – they need proactive support

THE 25% RULE

The Total Value of Grocery is the sum of the two core channels 

  • Modern Grocery Retail (supermarkets, etc), and

  • Traditional Grocery Retail (traditional kiosks, etc)

When Modern Grocery Retail represents 25% or more of the Total Value of Grocery, retailers can safely assume that Modern Grocery Retail is appealing to BOTH high income and middle-income consumers.

Normally, any less than 25% of the Total Value of Grocery, it tends to only be upper-income consumers shopping in a Modern Trade Supermarket. 25%+ shows that the upper income and middle-income classes are active buyers.

Which means, at 25%+ the market becomes very interesting for Private Label Manufacturers, who can target BOTH high income and middle-income consumers in Supermarkets.

Dynamic environmental factors influence consumers changing preferences. Private Label & Licencing Middle East serves the perfect platform to explore growing market opportunities for retailers, SMEs and product developers to launch their value-added and cost effective brands.


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