Private label brands are gathering momentum to mount a serious challenge to household brands in consumer shopping carts across the Middle East and Africa, according to exhibitors at the inaugural Private Label & Licensing Middle East who hailed the event for giving them a voice and a platform in an industry undergoing dramatic change.
Private Label & Licensing Middle East, the MENA region’s only dedicated private label and licensing exhibition, developed following extensive industry feedback for a sector-specific event, has enjoyed an impressive debut at Dubai World Trade Centre, shining the spotlight on the opportunities in an industry that is primed for rapid growth. According to the Global Private Label Report from Nielsen, private labels accounted for 10% of global retail sales in 2018.
With consumers increasingly turning attention towards affordability and sustainability without compromising on quality, the MENA region in particular is a land of opportunity for private label brands. Especially so for the UAE where private label has just a 2.2% retail market share, according to Nielsen.
Halssen & Lyon, the German tea expert, which creates customised products and packaging for clients, has already taken its first steps in the market, through a joint venture with Dubai Multi Commodities Centre (DMCC).
“There is great competition happening now between big brands and private label companies,” said Dietmar Scheffler, CEO, Halssen & Lyon.
Globally we have seen the importance of private label and what impact it has had in Europe, for example, where private label brands hold over 40% market share in some countries. Younger generations no longer feel obligated to stay loyal to big brands, it’s with them that the greater opportunity lies,” Scheffler added.
“We are glad to finally have a show where the future of FMCG brands can be discussed openly and lend a hand to companies looking for local partners. The MENA region is where private label brands can really make their mark with a new range of consumers and we are looking to expand further in the region.”
After operating in the Middle East market for almost 40 years, UAE-based Al Bayader International, which specialises in disposable packaging has seen the birth of private label in the region and is optimistic for the future. CEO/Founder Nidal Haddad, said: “Ten years ago private labeling was a foreign concept to the market but now we are seeing an influx in requests from consumers to see something different that truly caters to their needs.”
“There is a desire for local products that people can trust, there is a huge opportunity for local companies to show their dominance in the market. Consumer insights are the key to knowing your market and successfully building consumer trust.”
“I believe in the future, this market will become difficult to stay in without having a private label brand, as local brands begin to show their dominance over international brands. This show is key and exactly what was needed for the region,” added Haddad.
Peter Gale, Managing Director, Retailers Vertical, Nielsen, told the Prime Summit, the sector-focused conference which brought together industry thought leaders to share key insights and discuss major issues, that the next five years will be full of opportunities for private label operators, but cautioned that “brands must work to build up confidence and trust to achieve success.”
Gale highlighted research from Nielsen, a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide, showing the current global average for private label brands market share is 16.3%, with the UAE at just 2.2%.
While highlighting the opportunities available, Gale said “the main limitation for future growth in the MENA region is the difficulty in finding local partners for retailers to manufacture private brands.”
The inaugural Private Label & Licensing Middle East 2019 closes its three-day run today, 31 October.