Hofer and Eurospin aren't just channels anymore. They're competitors. If you're an FMCG manufacturer with an established brand, you're a tenant on their turf. They can hike your rent tomorrow – or simply evict you.
Days ago, I read a Forbes article about empty shelves at Hofer and the shifts it signals. Discounters are moving beyond "private label retailers" to become actual manufacturers with their own portfolios, aesthetics, and rapid launch cycles. Think Shein in fashion: an extremely efficient machine for developing, packaging, and rotating offerings – all under their own brand.
Let's be clear: for the past 20 years, FMCG lived in the comfortable illusion that the shelf was neutral territory. A brand pays for listing, trade marketing, an 8% discount on promotions, a few endcaps – and the story flows. Today, that story is crumbling because the retailer wields three weapons the manufacturer doesn't: direct contact with the transaction (the customer), control over space, and data on the entire shopping cart.
Negotiations are less about "how we'll grow together" and more about "how much will you cost me." Retailers use should-cost models, track raw materials and energy, and walk into meetings with calculations polished last night by generative AI. When they tell you, "Your price increase is baseless," they're not speaking from a hunch. They're speaking from a spreadsheet.
Here's the truth: private labels have shifted from "compromise" to "preference." Globally, the private label market is estimated at over $900 billion, with forecasts predicting growth towards $1.5+ trillion by the next decade. This isn't a cycle. This is a structural change.
In Europe, private labels command roughly 40% of the market in many categories, significantly more in some countries. Even more dangerous: customers increasingly say private labels offer above-average value for the price, and a segment sees quality comparable to national brands. If brands' defense was "we're better," that ground has been lost. Customers clearly don't take their word for it anymore.
Consider a demographic example: a significant portion of Gen Z and millennials are willing to pay more even for a private label product if they like it and it aligns with their values. This means younger buyers aren't buying the "cheapest." They're buying the "most sensible." If private labels offer aesthetics, clarity, and a sense of smart choice, established brands are in trouble – even with 50+ years of tradition.
My take: tradition is an argument for people with time. On the shelf, no one has time.
When a brand reacts with discounts, it effectively admits playing the retailer's game. The retailer always wins there, with lower distribution costs, better insight into elasticity, and the ability to replace you overnight. Delisting isn't a threat. It's mechanics.
When brands get scared of retailers, I often hear the same reflex: "Let's go direct-to-consumer." Sounds great on a PowerPoint. In practice, for most FMCG categories, it means paying for delivery, packaging, returns, and support – for a basket worth $18.70.
Anyone selling soup packets, spices, or snacks will be torn apart by the "Amazon standard." Customers want next-day, free delivery. I'm not convinced the margin allows for that. Add cold chain for dairy or ice cream, and the business model becomes even less viable for most players.
The paradigm shift: D2C isn't the only way to build a direct relationship. Transactions can stay with the retailer. The crucial part is that the data doesn't.
The Digital Bypass: The Receipt as the New Shelf
More and more smart brands aren't attacking the retailer head-on. They encourage customers to scan receipts with their purchased products – via OCR, QR codes on packaging, and rewards. This not only gives them first-party data without POS system integration but also insights into the conditions under which consumers buy their products, where they buy them, and what other items end up in the cart with theirs. All this is packaged into sweepstakes or brand loyalty programs.
Kellogg's has a "Family Rewards" program where customers photograph receipts to earn points. In seconds, OCR reads the date, store, SKUs, and prices – and the brand gains insight into the entire shopping cart, not just its own product. This is the difference between "I know they bought my cereal" and "I know they bought it with milk X, fruit Y, and a private label spread." This is data the retailer will never voluntarily provide.
At FrodX, such a model means a brand can collect tens of thousands of profiles (and GDPR consents) within 60–90 days if it has a strong enough reason for the scan. I'm not talking about a $0.10 reward. I'm talking about smart gamification, statuses, surprises, and rewards with a story.
The Pivot: Brands Must Become a Service
Most FMCG marketing still thinks it competes on the shelf. I argue it competes in the customer's mind – even before they step into the store. If the retailer is becoming a manufacturer, then in my opinion, the manufacturer must become a service.
What does this mean in practice? Something that saves the customer time at home, reduces stress, or improves an outcome: a meal planner, quick "how-to" tricks upon scanning packaging, smart personalization that arrives at the right time. When the customer gets a concrete benefit at home, the shelf becomes merely a pickup point. This is a shift in perspective many brands haven't yet digested.
And yes – this bypasses the retailer. Not physically, but psychologically.
I'm writing this as an outsider – without full insight into internal KPIs, channel economics, and IT/legal team limitations – so this is a framework, not a recipe. But both portfolio players (Podravka and Atlantic) already have visible building blocks for a "digital bypass" around the shelf: habits, strong brands, content, and packaging as a repeatable trigger.
The key pivot is simple: a brand shouldn't just be a story on the shelf; it must become a service at home. Coolinarika has a natural starting point here: the next step isn't necessarily more recipes, but usability that reduces the customer's "evening stress" (for example, a feasible dinner suggestion from what's already at home). And packaging is the most consistent entry into the experience: QR/OCR can trigger a short, concrete "trick," a mini-challenge, or point collection – something repeatable with every purchase, not just in a campaign.
If I had to set this up realistically, I'd start with an MVP: a single login + wallet, one use-case with clear utility, and one repeatable reward mechanism. The goal in 60–90 days isn't to "build loyalty" but to prove three things: that people activate, that they return, and that purchasing behavior shifts, even slightly. Once that loop is alive, it makes sense to add layer after layer – gamification, personalization, AR.
1. What percentage of your budget goes into a "better shelf" versus your own first-party data?
2. If you face delisting in one chain tomorrow, how many customers can you still address by name?
3. Do you have a mechanism to collect 50,000 opt-in profiles in 60 days?
4. Do you know your customers' entire shopping cart – or just your own SKUs?
5. What concrete benefit of your brand lives at home, not on the shelf?
6. Do you have at least one "service" product (AI, calculator, planner, assistant) that reduces customer stress?
7. How much communication is personalized based on behavior, not demographics?
In short: Hofer and Eurospin won't slow down. They're becoming better "manufacturers" because they have data, space, and speed. If manufacturers respond with a "brand campaign about tradition," they'll become museum pieces in modern retail.
You don't fight private labels with a louder ad. You fight them with a direct relationship with the end-user. As long as brands prove they can bring users to the shelf – and keep them there – retailers will still want them on their shelves.
Disclosure: I am the founder and director of FrodX. Podravka is our client; we collaborate with them on CX (SAP CX).