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Research: Dairy brands caught cold by price

Dairy products are among the best-selling items in food retailing in Germany. But this is exactly where you can currently see best how prices are rising. Shoppers are not indifferent. Their reaction: more buying of private labels.

Milk in coffee, cream in tea and yoghurt on muesli: hardly anyone wants to do without that. But what if, as the German Federal Statistical Office announced a few days ago, real wages fall significantly?

If you do not want to live without one or the other delicacy such as vacation, new mobile phone or the like, the only thing left is to tighten your belt when shopping for groceries. "Many consumers have to look at the money and opt for the cheapest option at the expense of branded and organic products," confirms Monika Wohlfarth from the Central Milk Market reporting to the trade journal "topagrar". "It's about maintaining your standard, you want to get through the winter, be prepared for any additional energy payments, the goal here is no longer higher, faster, further," emphasizes Susanne Rusch, Head of Market Research at Deutsche Milchkontor (DMK), Germany's largest dairy. Quite the opposite. Good is also cheap, many consumers currently think. And so the entry-level range of private labels is booming. Depending on the retailer these are called REWE´s "yes", EDEKA´s "gut und günstig" (good and cheap), LIDL`s "Milbano", ALDI`s "Milsani" or KAUFLAND`s "K Classic".

Less sales, higher prices

Higher, faster, further, on the other hand, it goes with the Mopro prices. As the evaluation of the Society for Consumer Research (GfK) shows, the white line from 2022 goes out with a sales increase of 8.7 percent compared to 2021. According to the market experts, this development was driven exclusively by higher prices (plus 13.7 percent), as sales had developed negatively.

Almost reflexively, one thinks to know who is "to blame" for this development. Once again, the brand manufacturers want to fill their pockets, it haunts the canteens at some lunches. Certainly often right. In this case, however, it is not true. This is because the price increases can primarily be observed in private labels, according to the experts at GfK. Last year, prices rose by 20.5 percent in the white line, while those of branded products rose by only 7.1 percent, below the level of general consumer prices.

Good marks for quality The fact that no-name products are often used is certainly not only due to the price, but also to the good image of the products. Just recently, Stiftung Warentest checked the quality of a total of 1,414 products in a meta-evaluation of the last four years. Branded goods versus private labels. Across all products, branded goods received an average score of 2.8. With 2.7, retailers' own private label brands were even a bit further ahead. With brand classics you often experience a top taste, but private labels score more in the declaration. When it comes to pollutants, there are hardly any differences, when it comes to microbiological quality, brands are slightly ahead of private labels.

No wonder it's often just about nuances. Brands and private labels often come from the same company. Almost all large dairies serve both rails. This can be easily found out by the identity marks. Traders are obliged to print this on the packaging of dairy products. The oval sign is primarily intended for the supervisory authorities. Not only. Consumers can also use it to see where the dairy product comes from. And there you will find names like Müller, Arla, DMK, Zott, Bauer, Danone and many more.

So it's hardly surprising that, with such good arguments in favour of private labels, more and more people are resorting to no-name in the current situation. "The discounters currently have the better offer not only for their regular clientele, but also for numerous exchange shoppers," says Dr. Robert Kecskes from GfK.

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