Private label effect on small producer business development : a multiple-case study from a producer perspective

Abstract: There is an unstable environment surrounding us today with varying interest rates, increased commodity and energy prices. With price increases in many areas at the same time there has been a successively decrease in people’s private budget. With less money to spend, the hunt for low-price products in food retail has increased. At the same time, private label products in food retail have increased rapidly, now being 29% of the total assortment in food retail (SCB, 2021). To help consumers in these more difficult times, representatives from food retail have mentioned that they will increase the number of private label products in store. Representatives from food producer organizations, on the other hand, say that this becomes at the expense of small food producers brand loosing shelves space and sales for their own brand products. This has shed light on Swedish food retail’s high market concentration, were 89% of the market shares are owned by only three companies. The aim of this study has therefore been to describe small food producers’ perception of private label effects on their business development and to identify the optimal collaboration between food retail and small food producers from a producer perspective. The research was made with a flexible design where four case companies, two in agricultural sector and two in food manufacturing sector, were interviewed using semi-structured interviews. A thematic analysis was made where the themes later was analyzed with the help of chosen theories and a conceptual framework. The findings showed that there is a consensus amongst the interviewees regarding that the relationship with food retail needs to be developed, but how this should be made differs widely. It was notable how it was the interviewees representing agricultural companies who were worried about the long-term effects on the business development of food production in Sweden to a greater extent than the interviewees operating in the food processing industry. The interviewees from agricultural companies are also the ones who mentions the need for regulations from politics regarding how private label products should be managed in the food chain.