Updated: Apr 13, 2021
Since goods under private labels can be brought to the shelves of stores of foreign chains faster than products under their own A-brand, this direction can become one of the growth drivers for domestic exports, Izvestia reports.
The federal center "Agroexport" under the Ministry of Agriculture has found a new way to significantly increase Russian food exports with the help of private labels. Since many domestic companies find it difficult to enter foreign markets on their own A-brand, they can begin to manufacture products for foreign retail chains under the retailers' own private label brand (see here for more on Private Label Brand development)
“Sale of goods under private label for foreign retail chains can become one of the important directions for the development of Russian agricultural exports. The supply of such products is distinguished by lower costs than, for example, its introduction to new markets under the company's own A-brand. This decision may become relevant for many manufacturers who are not yet ready to invest significant funds in product promotion, ”said the center representatives.
They also clarified that goods under private label brands can be brought to the shelves of foreign chains faster than products under their own A- brand. But it is impossible to name specific cases as each case is individual and depend, among other things, on the products and network of the country. At the same time, a private label brand manufacturer does not need to prove to a retailer that his product will show better sales dynamics than products already on the chain's shelf.
The producer of sunflower oil "Blago" has been practicing this format of cooperation with different countries and retail chains for more than 3 years. The company's products under the retailers' private label brand are sold in Georgia, Azerbaijan and Tajikistan. The Blago representative emphasized that the private label brand production project for foreign retail partners is a convenient and safe way for the company for market entry and make first steps in a new market. The dairy plant "Stavropolsky" also plans to produce private label brands for foreign retailers.
At the same time, this week a good example of independent entry into foreign markets was demonstrated by Belevskaya Pastilnaya Manufactory, which launched sales of traditional Russian sweets on Amazon.