Private Labels in the Tissue Industry, between Market Contraction and Expansion

Today’s consumers are becoming increasingly fond of private labels, even for tissue products. And it’s about more than just savings.

At the turn of the millennium, the so-called “retailer branded products” were already registering growth trends in the European market. At the time, tissue paper products were achieving significant sales volumes and market share with private labels.

Today, not only in the countries of the “old” continent but also in dynamic markets like Russia, private labels have earned the trust of more than 8 out of 10 consumers (in this case, it was the contraction in salaries that caused the growth in PLs, but the rapid evolution in consumer preferences were also reflected in the products themselves). Sales are highly significant: in 2016, the Italian PL market alone amounted to 9,500,000,000 €.

And it is the Italian scenario which perfectly illustrates the evolution of PL products. Last year, high-tier PL sales grew by 13%. The figure is symptomatic of a process that has steadily continued in the last few years: the perception of PL product quality is growing and becoming a determining factor in the purchase decision (valid across all continents).

From price-led to quality-led purchases, PL products reflect the evolution in consumer demands and the need for producers to differentiate and define new segments for their PL tissue. The perception of quality in private labels, in particular for commodities, is growing in aspects such as transparency, traceability and product performance. If once the purchasing driver for PLs was price, today is it the increasingly important quality/price ratio.

A different scenario is the US market, where producers of branded tissue products have a much higher sales share than PL (the latter, however, are eroding the position held by the brands). The explanation is to be found both in in the continuous flow of innovation as well as in the sales policies for retailing (incentives for shelf assortment and for sales).

How can producers balance out a market that is more and more interested in private labels? How can they maintain the prominence and sales of PL products? Let’s try and list the essential requirements for a successful strategy:

1. From the point of view of production assets, think of differentiation, with companies setting up factories specialized in PL tissue products;
2. An overview is necessary; one that pays attention to the rapport between producers and retailers and ensures they don’t behave like “enemies”;
3. Market niches on a global scale could be identified and exploited, with the opportunity to achieve high margins;
4. Investing in innovation, always. Innovation in the product, in the process, in sales and in communication to capture the consumer’s imagination, heart and purchase decisions. In all this, exploring new sales channels plays a fundamental role, as does acknowledgement of emerging purchase dynamics (consider that by 2020 online sales will represent 15% of total sales on a global scale);
5. Every brand carries with it a story that is rewritten every day together with consumers and “sustainers”. Working on these stories guarantees affinity with the brand, engagement, prominence, differentiation and loyalty.


The point of departure and the point of arrival of every sales system is the consumer: knowing one’s public is the true competitive advantage of every player. In this case, it is necessary to know who the buyers are in every possible detail, what they want, what they buy at the retail sales points, how often they buy, which product categories get them out shopping, what goods they decide to purchase when standing in front of the shelf, and what sparks their decision at that moment. To quote Nielsen: understanding shopping fundamentals.