The rise of private label – and how to ensure your brand is ready to supply Australian retailers

Sep 19, 2022 by Mark Dingley

Avoiding recalls due to packaging & labelling faults is part of being ‘private label ready’


Store-brand alternatives are booming. In Australia, private-label dollar growth is outpacing branded products by nearly two times, with private label accounting for a growing share of grocery sales.

Popular own-brand offerings are now critical to success for supermarkets. With up to 30% higher margins on private-label goods than from branded products, it’s no wonder retailers are moving to increase own-brand shelf space.

Look at Coles: the supermarket giant is looking to grow its own brand products to 40% of sales by 2023, up from 32%.

And there’s huge potential for growth – the private-label market holds approximately 18% of market share in Australia – similar to the United States. By contrast, in the UK, private labels make up 47% of the market, which shows there’s room for growth in Australia.

Let’s take a look at what is driving the private-label boom, and how you can ensure your brand is ready to supply Australian retailers.

Label Maker

Overview of the private-label market in 2022

It’s no secret that the COVID-19 pandemic changed the way people shop. Along with the growth of online shopping (thank you, lockdowns), the pandemic propelled the popularity of private labels.

Once the poor cousin of name brands, private-label products have become popular choices for shoppers who are looking for good quality at lower prices. Some 61% of Australians say private label products are a good alternative to branded products.

Value plays a big role in the decision making, with 70% of consumers saying they shop for private-label products to save money. In 2022, with inflation putting pressure on household budgets, Australian consumers’ hunt for greater affordability is likely to keep the private-brand boom going for a while longer.

Private label goes premium

But gone are the days of private label products being just “cheap” alternatives. Private labels are shifting to more premium, innovative products causing the lines to blur between private labels and name brands. Coles Finest products, for example, can be found in every section of the supermarket, from the freezer to the confectionary aisle and the bakery shelves.

In 2018, in a move to target more upmarket customers and drive innovation, Coles partnered with French baker Laurent Boillon to create an artisan-style, stone-baked sourdough bread. Laurent Bakery was even recognised for its Coles Finest Range at the Annual Royal Hobart Fine Food awards.

Coles CEO Steven Cain said, "When we started the own-brand development many years ago, it was very focused on the entry price-point, making sure that there was great value at that end of town. What we're focusing on much more these days is the other end of town, so to speak … affordable luxuries."


Consumer trends led the way

Retailers are following hot on the heels of consumer trends. Right now, shoppers are willing to pay more for products that meet consumer needs of health, convenience and sustainability.

That’s why, in 2021, Coles launched 150 new sports performance and health ingredients along with its own sports nutrition brand, Coles PerForm. Coles is ticking the “local” box too – a substantial 68% of its home brand products are grown, produced or made in Australia, compared with 61% of Woolworths private label products.

Because authenticity and provenance are just as important for own brands as they are for name brands. To meet this consumer need, retailers are communicating the story behind their private labels, such as how they source ingredients, where the products are made and who the farmers are.

Want to become a private label supplier?

Here’s how you can get ready to tap into the market:

1. Know the rules

Supermarkets have specific requirements to ensure their suppliers are meeting high standards – especially because own-brand products represent the retailer’s brand, not the supplier’s.

For example, Woolworths developed its Supplier Excellence Program (replacing its WQA program), which defines all the safety and quality requirements for the supply of Woolworths' ?own-branded products and Endeavour Group Own Branded Products.


Here are a few things you need to have:

It’s also standard for retailers to ask their own-brand food suppliers – from growers to processors – to have an up-to-date GFSI (Global Food Safety Initiative) certificate.

2. Be compliant with labelling and coding

Compliant labelling and coding is a critical part of ensuring your products are private-label ready. Barcodes must be compliant with GS1 Australia standards, as well as meeting the retailer’s specific guidelines. (Learn all about barcodes in our Barcode Learning Centre and 2D Barcode Learning Centre.)

The good news is that retailers’ own brand requirements for coding and labelling will pretty much echo best practice across the industry. If you’re a food and beverage manufacturing company in Australia, you should already be doing these to ensure the future of your business.

3. Go sustainable

A growing number of retailers are heeding the call and putting sustainability first. In fact, Woolworths, Coles and Aldi have committed to making all plastic packaging reusable, recyclable or compostable by 2025.

So it pays to think about moving to green packaging, if you haven’t already.


For example, Coles prefers its own-brand products to be packaged in materials and formats recyclable in Australia. All packaging is put through the Packaging Recyclability Evaluation Portal (PREP) tool to verify if it is or isn’t recyclable in Australian and New Zealand kerbside collections.

And it’s not just the packaging. Coles promotes a sustainable approach for its Own Brand products with suppliers required to meet its policies and requirements across a range of areas including product safety, human rights, animal welfare, health and nutrition and packaging.

Final Word

Success in the private-label market is all about partnerships. Work closely with retailers from the beginning to ensure that you understand all their unique requirements. There are general standards, but every retailer will have unique specifications based on its brand values, supply chain and customers.

At Matthews Australasia, we have worked with lots of food and beverage companies to help them get their coding, labelling and inspection systems ready for the private label market. Talk to us to see how we can help you.