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The rise of private label in the food industry

07/11/2019

The private labelling industry is now at its peak, thanks to the increase in consumers who prefer purchasing generic and cheaper products over branded ones. In fact, there is a significant increase of 61% in the number of consumers who purchase private label products, making it good leverage for retailers.

But what is private label anyway?

Privately labelled products are those manufactured by a third party manufacturer and sold under a retailer’s brand name.

For example, L&P Global is a private label olive oil supplier, and we supply olive oil products according to the branding of our clients. This includes specifications, labelling, packaging etc.
If you have a business that has to do with olive oil, then this article is for you. Read further and find out the benefits of getting privately labelled olive oil instead of reselling.

Builds Branding

Privately labelled products are done according to the specification request of the clients. This gives the opportunity for retailers to be creative in building the brand that they want.
For example, if you are a spa owner, you can private label olive oil products like moisturizers and display them in your shop.

Higher Profit Margins

Compared to reselling, private label brand offers higher profit margins since it is direct from the manufacturers causing the cost basis to be lower.

Another way to earn from private labelling is through wholesaling. By doing so, retail shops will have the opportunity. This will also help spread your brand to a wider market.
Full control of the product

Manufacturers work in accordance with the retailer’s direction. This means you have the full control of production, pricing, branding and most importantly, the profit.

Common Private Labelling Issues

Bulk order requirements
Purchasing privately labelled products need to be done in big quantity in order to compensate for the manufacturing cost. This is also the reason why it is cheaper - the larger your order, the lesser the price. That is why it is important that you are aware that you will be handling a large inventory when doing private labelling.

Stuck up inventory
Another issue when getting private labelled products is the stagnant inventory. This is when the products are not able to move. Unfortunately, you cannot return it to the manufacturer if it's not moving, unlike with branded merchandise.

Fortunately, here at L&P Global, we make sure that we only provide the best olive oil products to our clients, making sure that their customers are going to come back for more. As a private label/OEM olive oil supplier, our aim is to promote a healthy lifestyle by providing premium products to our customers including those who are in the retailing business.

There are a lot of business opportunities using private label products. If you are interested in private labelling, contact us right away at info@lpglobal.eu!