Leading Angolan supermarket chains are accelerating the development of their private label product ranges. But although consumers are receptive, the challenges are for the domestic food processing sector to keep pace with retailer demands.
Private label is taking off in Angola as domestic supermarkets seek to acclerate the devleopment of tjheir own portfolios. Although the pioneer in Angola is Shoprite, which entered in 2003, Angolan supermarket chains only started developing private label in 2011, when Alimenta Angola, Deskontão, Maxi and PomarBelo (then called Pomobel) launched their ranges. Since then, Kero and Candando have also launched their own private label ranges, in 2014 and 2017 respectively.
By 2020, private label market share among the leading supermarket chains could reach 20%, according to some local reports. The growth is coming as consumers become more used to private label and switch brands.
Angolan retailers typically launched private label products in core food categories such as rice, oil and sugar. However, the growth now is in added value processed foods and non-food. Despite the growth of private label, ranges remain small. Kero has just 150 SKUs, compared to 10,000+ SKUs in a large European supermarket chain. where South African retailers such as Shoprite have also developed segmentation in their private label portfolio (basic, good, best; and by type, such as ‘free from’ or ‘organic), this is not yet the case in Angola.
One of the major challenges is the depth of the supply chain in Angola. Candando claims that 80% of its fruit and vegetables are sourced domestically, from producers across nine provinces. But there is more limited capacity in domestic manufacturing. Initially we expect domestically sourced private label products to include soft drinks, canned food, sugar confectionery, some frozen prepared foods.
The real challenge is developing private label in areas such as alcoholic drinks, ready meals, household products, and non-grocery sectors including clothing, books and stationery. Trendtype believes the 20% market share target is unlikely – it will be closer to 10%-12% in most stores. But Angolan consumers are increasingly receptive to private label (unlike in some markets, where private label is still considered unwelcome copycats of trusted brands), paving the way for higher growth.
