How active is the company Inco-Veritas in the area of Private Label?

- The trade activeness of the company INCO-VERITAS S.A. in the area of Private Label is entered into the long-term strategy of the company’s sales. The ambition of the company is meeting clients’ expectations in the scope of offering a wide range of household chemistry products, cosmetics and garden fertilisers of own brands. We direct our offer to trade chains, wholesale chains, distribution companies, but also to other producers. Until now, as an unquestionable leader on the market in the category of dishwashing liquids for many years, our company concentrated mainly on the development and strengthening the positions of own brands – LUDWIK, BUWI, FLESZ, MINOS, AUTO-MAX, AZOFOSKA, GARDENWIT, FLOROVIT. We placed less emphasis on active sales measures of own brands. Contracts from this area constituted an additional, more marginal share in sales volume. Most of them concerned the so-called “contract manufacturing”, and only a few are typical contracts of own brands.

How do you assess the development of Private Label products?

- INCO-VERITAS S.A. is observing the changes that are taking place on the market attentively, and it recognises the fact, that own brands are characterised by a high dynamic growth. According to research carried out by Nielsen, the share of Private Label in the offer of trade chains in the last years has increased by 11% to a level of over 15%. In some store categories, such as discount stores, the share of own brands in the offer amounts to over 85%. At the same time, this is the most dynamically developing category of stores, which have over 65% in shares in the distribution of own brands. According to PMR Publications’ report, it is these formats of stores - discounts and supermarkets will constitute further dynamic growth of Private Label in Poland.

What about the traditional channel?

- Aside from the modern market, Private Label have also been present in the traditional channel for a few years. Currently, the traditional market has over 8% in shares in the distribution of national own brands, and its quickly progressive consolidation and increase in purchase strength sees a very promising development of own brands in this channel.

What does the development of Private Label of dishwashing liquids look like?

- In the category, which is of course what we are most interested in, that is dishwashing liquids, the dynamics of Private Label developments is bigger and bigger. According to MEMBR’s research, the number of own brand shares on the market of dishwashing liquids in 2005 amounted to 9%, and in 2008 it was already above 24%. According to MEMBR’s data, in 2008 Private Label in this category were third on the market in terms of value, and in terms of numbers - first.  For us, these arguments are enough to get interested in the own market area. Therefore, we have made the decision of coming out with our offer, knowledge and experience in the scope of producing household chemistry, cosmetics and garden fertilisers on the Private Label market.

Who has taken advantage of your offer so far?

- We offer Private Label products in eleven categories, of various quality standards – premium, economy, value for money. ALDI Polska Sp. z o. o., TESCO Polska Sp. z o. o., Jeronimo Martins Dystrybucja S. A., Libella Sp. z o. o., Zakłady Chemiczne UNIA Spółdzielnia Pracy have already taken advantage of our offer. INCO-VERITAS also directs its offer in the scope of cooperation in Private Label to foreign partners.

What can your potential clients interested in Private Label expect?

- We offer our clients over 60 years of experience in developing technology and production. The available production capacity in our leading categories belong to the largest in Central Europe – in household chemistry it is 100 000 tons annually and in garden fertilisers it’s 24 000 tons. We have our own resources and tools in the scope of producing plastic packaging and thanks to this, we are able to offer our clients modern and aesthetic packaging in materials type HDPE, HDPP and PET. Our Department of Development employs 25 people, who develop tens of recipes and implementations annually, both in the area of standard products, as well as innovative products. The high quality of our products is verified daily by masses of satisfied clients, loyal to our brand and quality for years. We want to transfer this value to the area of own brands. We offer Private Label products in the following categories: garden fertilisers, dishwashing detergents, detergents for dishwashers, for washing fabrics, cleaning detergents for surfaces and kitchen and sanitary devices. In our offer we also have wax detergents for protecting wooden surfaces, shoe polish, automobile cosmetics, professional cleaning products and health cosmetics.

Does the Polish Private Label market differ from the one in Western Europe?

- The Private Label market in Poland, Central and Eastern Europe differs from the Western European market. There, own brands are perceived as an alternative for brand products. In countries, in which own brands are developed and take up a large part of the market (Switzerland 54%, Great Britain 43%, Germany 39% - AC Nielsen 2008), there is a conviction, that they are equally good as brand name products. In Central and Eastern European countries, own brands still take up a small share of the market (Poland 21%, Hungary 25%, Czech Republic 28% - AC Nielsen 2008) and are perceived as a cheap product of mediocre quality. Partly, chain stores are to blame for this situation, which in entering the Polish market with own brands at the end of the nineties, positioned them mainly as products of first price – the cheapest and poor in quality.

Are own brand products still perceived like this?

- Fortunately, own brand products have evolved since that time in accordance with the trends in Western European countries. Together with the development in amount, a significant quality improvement has taken place. According to PMR Publications’ report, own brands of first price in TESCO, Carrefour and E. Leclerc in the first quarter of 2006 were represented by 2,788 articles and in the analogical period of 2008 by 3,340 articles. However, the medium shelf has grown respectively from 2,819 articles to 9,944 articles (including Premium products). The opinion that own brand products are worse in quality than brand names is losing its raison d’etre. Products from the Premium category are characterised by high quality, interesting and attractive design of packaging and attractive price in relation to brand name products.

Thank you for interview.
Tomasz Pańczyk