During the recent months, Indian retailers have increasingly been concentrating on the private label sales in the stores. A visit to any Indian retail hypermarket would reveal a sudden increase in private label brands promoted by the retailers. Major CPG brands like Knorr, Kissan, Maggi etc.. are being replaced by secondary regional brands or by the retailers private label brands. This is the result of the margin maximization drive by the Indian retailers.
But are the retailers really upto the mark in quality compared with the established brands? My personal observation is not yet. I sampled some private label products across retailers and think that the non processed food products seem ok as private label but the processed food still have a long way to go in terms of quality. I had very bad experience in using ready to make soup of a major private label brand of a retailer. The soup taste was absolutely yukkk and the quality of the same was horrendous. I don’t think I am going to touch any other product of the same private label !!
I think the retailers don’t seem to have realize the importance of quality, consistency and product lifecycle efforts which are needed in a consumer product manufacturing. Repacking rice, daal or any non processed food is ok but making jams, soups, tooth paste, butter etc needs quality infrastructure investment and don’t know if the Indian retailers are investing in the same.
Regarding systems, most of the retailers are configured for basic repacking but private label manufacturing is a different cup of tea… lets see how the Indian retailers cope with this.
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