Retail private labels challenge

Written by Administrator
Wednesday, 20 February 2013 07:33

PepsiCo and Coca-Cola being indisputable leaders of the Russian market of juices continue loosing market position. At the end of 2012 their cumulative share decreased by 7 % points to 64%. The producers explain this reduction by the optimization of the business, experts in development by own private labels for retailers development.

According to the Russian Union of juice producers (RCSP) report at the end of 2010 PepsiCo and Coca-Cola occupied 82% of the market in natural expression, 2011 -  71%, 2012 -  64%. The share of PepsiCo over the past year fell from 45.4% to 40.3%: the decrease showed "Lebedyansky"  from 24.9% to 21.3 per cent, as well as "Wimm-bill-Dann"  from 20.5% to 19%. Coca-Cola and Coca-Cola Hellenic Bottling Co.  proceeded  better. The decrease showed only a "Nidan", which share decreased from 9% to 7%, "Multon" build-up indicators from 16.7% to 17% in 2012. But in general Coca-Cola's share on the market of juices decreased from 26.7% to 24%. Sady Pridonya has increased it's share from 6.7% to 9%. 

Nevertheless under latest data of retail audit in cities with population over 10 thousand people which is conducted by Nielsen owned by PepsiCo and Coca-Cola juice brands still hold more than 50% of the market in terms of volume. The leading brands of the Coca-Cola have 23,8%, 17% of which is "Good" ("Multon"), 6.8% - "My family" ("Nidan"). Flagship brands of PepsiCo occupy 29.5% of the market,  which 14.6% gives the share of the "Фруктовый сад" ("Lebedyansky"), 10.8% - "Любимый" and even of 4.1% for the "100% Gold" ("Wimm-bill-Dann" both).

Coca-Cola Co. and Coca-Cola Hellenic Bottling Co. bought "Multon" in 2005 for $500 million, "Nidan Juices" in 2010 for $276 million. Its competitor PepsiCo paid $1.8 billion in 2008 for the company "Lebedyansky" and in 2010 bought  "Wimm-bill-Dann" for $6 billion.

Marketing Director of  Multon Pier Filippenko  announced decrease in the share of the two largest players on the market of juices connects with the changes in the structure of sales companies, as well as the assortment optimization. If earlier we worked more closely with independent distributors, now the sales structure is more balanced in favor of its own trade representatives in all regions",- he specifies. Marketing Director for the category of juice PepsiCo Natalia Vasina explains the fall in aggregate share of the company at the end of 2012 due to output of the product portfolio of small local brands. "The growth of aggregate share of our priority brands, such as "Фруктовый сад", "Я", " J7 " and other have been reached by the results of the year",- points Mrs. Vasina.

However, the head of the agroindustrial busines-unit of "Neo Centre" consulting group Anastasia Zalutskaya considers the main factor of reduction of PepsiCo and Coca-Cola  share the active development of networks' own private labels. "They offer  attractive consumer prices in comparison with the large players of the market",- the expert notes. According to her assessment  released under its own brand retail network products are usually cheaper than their direct analogues on 10-15% in average. This tendency is observed not only in the market of juices but also in other segments of food market, stated in "Neo Center". According to the RCSP the share of private trademarks on Russian juice market by the end of 2012 amounted to 7% having increased during the year by 2-3 %.


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