Private label products, which are manufactured by one company for sale under another company’s label, have become a popular business strategy for grocery chains. Rozelle Abramson, co-owner of South Africa’s Fynbos Fine Foods, a company renowned for producing hot sauces and food flavourings, has spoken about the advantages of the private label approach over exclusively promoting one’s own brand. In fact, approximately 85% of Fynbos’ sales come from private label products.
Rozelle emphasizes the challenges of exclusively promoting one’s own brand, noting that it requires substantial effort to ensure the product is displayed attractively on the shelves, particularly overseas, and can be quite costly. However, supermarkets have a vested interest in promoting their private label brands, which can significantly benefit those products.
Fynbos faced challenging times following the global economic downturn of 2007-09, which led to a sharp decline in consumer spending on non-essential items. However, participating in the SIAL trade show in Paris was a turning point for the company. It was there that a representative from a major American retail chain discovered Fynbos’s chef salt and habanero sauce, leading to a substantial private label order for approximately 70,000 units.
This deal provided Fynbos with a lifeline, as described by Rozelle, and the company continues to supply its products to the American retailer as well as other international and local clients. Fynbos annually produces approximately 4.4 million units of hot sauces, pestos, chef salts, and jams, with exports making up about 70% of its output.
Furthermore, the company serves as a private label supplier to Turqle Trading, producing relishes, seasonings, and hot sauces for Turqle’s brands, which are distributed in Europe, the US, and Australia.
The success story of Fynbos Fine Foods demonstrates the potential benefits of focusing on private label products in the food industry. It also serves as an example of how a strategic shift in business approach can lead to success, even in challenging economic times.
For more insights from Rozelle Abramson, you can read the full interview with her on how a South African chilli sauce company broke into the American market.