Monday, September 26, 2011
Tesco moves beyond private label with venture brand Chocablok
But, it doesn't come cheap... Each pack retails at £3.99 per 500ml, a pricing that clearly emphasises its premium positioning amongst the likes of Ben & Jerry’s, Haägen Dazs, and Mövenpick.
What does Tesco say about this then? “Our venture brands are very different to own-label,” said Tesco brand developer, Sidonie Kingsmill to Marketing Magazine, “they will never be "me-too" products. We look at where the customer opportunities are, where brands are not succeeding and what we can do in addition to brands. We’re in a unique position as the biggest retailer, with access to the best suppliers worldwide.”
This development made me reflect on the limitations of private label. Private label has developed a lot since its early days as a discount and often rather boring offer. Today we can find PL goods across the whole range of categories and the British retailers are phenomenal at this. However, this Tesco example might also demonstrate some of the limitations of PL. Clearly Tesco isn't just doing this for fun. No, instead they've carefully analysed the situation and realised that they can make even more money if they also develop brands that are 'freed' from the motherbrand, and thus able to compete against other brands with no danger of being held back by the mother brand associations i.e. in this case Tesco.
Well, that is just one reflection, I guess there must be more reasons why Tesco is venturing into this arena. And maybe some of the other simple reasons are: plenty of cash, retailer power and distribution network. They simply can!