Room for expansion

According to the Denmark-based trade organization SPT, sales of skincare products advanced by 54 per cent from 2005 to 2012, after taking a brief but notable dip in 2009. The figures do not include ferry/border/airport tax-free sales, which take a significant bite out of domestic retailers’ share in a country with high excises on cosmetics. It is interesting to note that during the same period, perfume sales remained stable — despite a sharp drop in 2007 — with 2012 and 2005 figures at nearly the same level.

“At the moment, there are many trends,” says Flemming Haahr, MD-owner of the Esbjerg-based beauty aids producer Allison. “Non-allergenic and scent-free items have been big in supermarkets and specialized shops for the past few years.”

Haahr tells how “spa” products are also making headway in concert with the wellness boom of the past few years.

“Oils are booming at the moment, and you will see more products coming along,” he says. “We are working on products containing Argan oil from Morocco. And a general trend is new ingredients, usually natural and often vegetable.”

Vanity remains the obvious driving force behind many of the sales, and men are beginning to catch on. At the HeBa chain Matas, and the department stores Magasin and Illum, sales of men’s cosmetics (excluding perfumes) advanced by 28 per cent in the one-year period to mid-2013, according to newspaper MetroXpress.

While Allerød-based Matas has a specialized, well-developed and decades-old private label programme, private label products found in other Danish outlets tend to be relatively young — and merchandising tied to them can be something of a riddle. In some cases, they are given a prominent position, while in others, they are buried anonymously among main brands, and not even price is used as a hook. To be sure, there is room for improvement, which could help expand private label lines.

MATAS AN INNOVATOR

In a stock description for investors, Jyske Bank writes that 98 per cent of all (Danish) women are familiar with Matas, and the drugstore chain holds a 38 per cent market share. The chain’s Striberne (Stripes) brand is by far one of the most well-established private labels in the country.

Stripes covers nearly all product categories. The word “Striberne” does not appear on packaging; the stripes themselves identify the products. Stripes items are colour-coded according to product category — hair, feet, face, etc. — and often are colour-coded within a category. Matas’ website features 45 screens of Stripes items, with a dozen items on each.

Stripes products are often priced as low as half that of a brand and a fraction of a luxury product. Nearly all products have perfume-, paraben- or colour-free alternatives in the same size container and nearly the same artwork.

Haahr points out that scents are on the comeback.

“Newer products have a little scent, ‘healthy’ scents that don’t cause allergies,” he says.

Matas’ other private labels in the product area include Natur, a line of perfume-, colour- and paraben-free non-allergenic products, and Medicare, a limited selection containing more clinical ingredients to support the Medicare name. Natur consists of 24 SKUs for head-to-toe needs and is priced slightly higher than Stripes, but lower than A brands. These private labels are generally merchandised among other brands, whereas Stripes tends to get spotlighted in most outlets.

The first thing we encountered during a visit to one central-Copenhagen outlet was up-market men’s and women’s perfumes, followed by hair-care items. Prices fluctuate, but Private Label International noted that a private label body lotion — part of a special offer display in mid-store — cost one-third that of an upscale (though not top-shelf) international brand, but was priced one-third higher than a low-cost brand that is a household name in much of the world. The clerk said consumers trust the Stripes brand, and most are willing to pay a bit more for the familiar product.

One whole wall at the back of the store — a total area of around 80 square metres — was displaying Stripes bath and body products only, with the legend “100% Care” written prominently above the approximately 4-metre-long shelves. The display contained around 70 different pro-ducts, or roughly 100 SKUs, with size differences taken into consideration. Two newer concepts that truly stood out were a fair-sized selection of items in 100-millilitre containers for airline hand-baggage, and empty refill containers of the same size, with the Stripes logo.

A notable trend was products containing organic ingredients — colour-coded for easy identification. One was a selection of pomegranate preparations: body lotion, oil, cream and some more body-specific items such as cream for around the eyes. The marketing of private labels with a specific function, such as the eye cream, is relatively new, and the Matas store is the only one we visited that offers such products.

For men, Matas has a private label line called Matas Men within the Stripes brand. The products were prominent in the men’s department; packaging was clearly designed with masculine appeal in mind, with the Stripes branding very discreet. Most of the 33 products are deodorants, or products for shaving or the face, but seven we saw are specifically for the body. In general, the containers are smaller or different from their feminine counterparts.

A FOCUS ON THE BASICS

Coop Danmark, headquartered in Albertslund, and Højbjerg-based Dansk Supermarked are nearly equal in size and command well over half of the Danish market within the broad definition of grocery stores. Coop runs 700 stores, including the Kvikly (hyper), Superbrugsen (super), Fakta (deep-slash) outlets, as well as 84 stores in its Irma subsidiary. Coop and X-tra are the main private labels, with the latter often found in Irma outlets and all carrying the health-enviro-friendly Änglamark private label.

Änglamark is what Coop calls its “responsible” label. Polling indicates 90 per cent of consumers recognize the label. The group’s product manager, Tove Siegfredsen, explains how many of the products have proven to be very successful. All are scent-free and non-allergenic, and all have two, and some three, seals of approval. The line 
covers 55 SKUs of beauty products if certain baby items are included.

Änglamark products are generally sold at price levels around those of mainstream brands. X-tra carries 30 SKUs of deep-slash products — basic washes, lotions, creams and hair care products — while Coop has a slightly higher number.

At the Superbrugsen store Private Label International visited in a Copenhagen neighbourhood, the section for toiletries and beauty aids was relatively small, featuring the basics. Änglamark products were beside a limited mix of brands, including a sprinkling of X-tra items on a smaller display unit perpendicular to the aisles. At the top left of the unit was a sign reading “Beauty Care”, but on the right side, “Änglamark” was written, and the label took up roughly half the display. What’s more, the Änglamark brand is actively promoted on the company website, in weekly flyers and, most notably, in TV ads.

A 500-millilitre plastic bottle of Änglamark body lotion costs roughly three times what a comparable bottle of X-tra costs, although the Änglamark products were on sale at around 10 per cent off. Written on the Änglamark lotion package is “Body Lotion — No perfume — No colour”, in English, not the usual Danish, Swedish and Norwegian content declaration. The reverse side has a mix of local languages and English.

Dansk Supermarked runs 1,300 stores at home and abroad, although not all are grocery stores. The group includes the Føtex (hyper), Bilka (hyper) and Netto (deep-slash) outlets. It has seven main private labels and some store-specific private labels, but Budget and Levevis are those relevant in the bath and body area. The Budget label explains itself, while Levevis is promoted through health and environmental values. The company makes efforts to promote Levevis through both the usual channels and in a novel way, by sponsoring the Levevis Run in four major Danish cities.

We visited a Føtex store at the edge of Copenhagen proper, a store in a smaller mall with ample parking facilities. The HeBa section covered 5-10 per cent of total area. Levevis products are situated towards the end — on the way to food section — on a rack facing the aisle. We counted 12 SKUs in the bath and body area, although some Levevis and Budget items were mixed among main brands in other racks. A modest selection of both labels could be found in the baby section at the opposite end of the store.