Private label or own-brand products are made to order for retail chains, carry the store's own branding and are sold exclusively in that chain's stores. Typically, these items are priced lower than comparable branded goods offered by competitors.

Driven by sharply rising prices, more consumers are turning to these budget-friendly options.

This week, the Finnish government announced plans to restrict the sale and production of private label goods as well as their preferential placement on store shelves in an effort to strengthen the position of domestic producers.

Sirje Potisepp, head of the Estonian Food Industry Association, explained that Finland has long pursued a historically protectionist approach to defending local food production — an approach that has helped maintain strong domestic manufacturing capacity. Although food inflation has been lower in Finland than in Estonia, price has still become the dominant factor in consumer purchasing decisions there as well.

"Given that, the growing market share of lower-cost store brand goods is understandably a concern for Finnish food producers," Potisepp said.

She noted that in Estonia, too, the growing presence of private label products in retail assortments has been a long-standing concern.

"This threatens domestic food production, which is critical not only for food security but also for everyday food availability. Local products have the advantage of freshness and are tailored to local taste preferences," she said.

According to Potisepp, owned brand products are generally produced at lower cost and are often made abroad using foreign raw materials. In a situation where food sales volumes are declining month by month, increasing the share of private label goods and narrowing product assortments is one of the main ways retailers seek to maintain profitability.

Risk to domestic production

According to the head of the Estonian Food Industry Association, the continued expansion of private label products in Estonia, especially against the backdrop of rapid food price inflation—poses a significant risk to domestic producers.

"In the fresh meat category, for example, store brand products already account for more than 40 percent of the market in Estonia," said Sirje Potisepp. "This means local producers have less and less room to operate under their own brand, which in turn limits both their ability to invest and to develop production in the long term."

She also noted that if Finland's protectionist approach were to become a broader trend across Europe, it could begin to limit export opportunities for Estonian producers.

"Private label is a double-edged sword," Potisepp said. "At home, it's a curse, but on foreign markets, it can also be an opportunity for our companies."

Owned brand products make up over a quarter of Rimi shoppers' basket

Marta Palm, purchasing manager at Rimi Estonia, said that private label products now make up just over 25 percent of customers' shopping baskets.

"The share and popularity of these products is growing slowly but steadily. In 2025, we saw continued growth, an expanded product range and increasingly strong private brands, reflected in both consumer preferences and international recognition," Palm said.

According to her, consumers are placing greater value on everyday items that offer good quality at a reasonable price. Customer surveys conducted by the chain also show that Rimi's strong own label selection is one of the key reasons people choose to shop there.

"Consumers are drawn to these products not just for the price, but for the consistent quality and taste. In economically challenging times, people become more price-sensitive, so it's understandable that more affordable alternatives have become increasingly appealing," she added.

Palm emphasized that the goal of store brand is not necessarily to be the cheapest option, but to offer the best value for money. "Private label products have distinct brands and strategies, just like conventional branded products. For example, the Rimi Smart line is positioned as a lower-cost alternative, while other store labels are designed to fill market gaps or offer innovative and healthy choices," she explained.

She added that private label market share varies significantly by product category. In categories dominated by strong local brands, private label's share is lower; in others, where brand recognition matters less to consumers, it tends to be higher.

Store brand goods marginal in Selver supermarkets

Selver's product lineup includes around 100 private label items under the Selver name, along with several hundred prepared foods, salads and baked goods sold under the Selveri Köök brand, according to Selver's head of communications, Mariann Järvela.

Over the past year, Selver has also introduced a number of white label product lines and plans to continue expanding in that direction in the near future. A white label product is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they had made it.

Järvela noted that Selver carries close to 50,000 products in total, meaning that private label and white label products still represent a relatively small portion of its overall assortment.

"When selecting private label products, Selver considers consumer demand, purchase frequency for a specific category or item and the potential price point of the product," Järvela said.

"The assumption is that a store brand item offers consumers a more affordable alternative to a comparable branded product. Its composition and function are the same or equivalent to the branded version," she added.

Generally, branded products still account for higher sales volumes compared to private label goods. However, in some categories, Selver's private label sales rival those of major brands — for example, Selver's butter is especially popular among customers.

"Considering that store brand products account for about 13 to 14 percent of total retail sales in Estonia and around 40 percent across Europe, Selver's share is quite marginal. Private label products make up just a few percent of the chain's total sales," Järvela said.

Own brand goods make up 90% of Lidl sales

Private label products have always been central to Lidl's business model, accounting for roughly 90 percent of all items sold, according to Kaspar Kütt, Lidl's public relations specialist.

Since Lidl entered the Estonian market in 2022, the popularity of private label products has grown steadily. "From the start, we saw that Estonian customers were curious about our brand products and now they've fully embraced them. We don't see this preference as simply a reaction to difficult times, but rather as a sign of growing consumer awareness in Estonia," Kütt said.

Lidl's goal, he emphasized, is not just to offer the cheapest products, but to provide the best possible quality at the best possible price.

"With private label goods, we're able to keep prices low by selling many of the same products across multiple countries, which reduces transport and logistics costs. Customers also don't have to pay for advertising, packaging or other brand-related expenses that often come with well-known labels," Kütt explained.

He added that many of Lidl's private label products are manufactured in the same facilities as major branded goods, meaning they often have the same or very similar composition and quality — just at a much more affordable price.

Coop planning to extend store brand selection

Oliver Rist, purchasing director at Coop, observed that Estonian consumer habits have shifted in recent years, with a growing share of shopping baskets now made up of discounted and promotional items, including a noticeable increase in private label sales.

Coop has been offering store brand products to its customers for the past 30 years.

According to Rist, the selection of Coop's private label goods is driven by sales data, market trends and customer preferences.

"Our goal is to meet consumers' key needs, whether that means affordable Säästu products, locally produced and trusted Hüva items or high-quality Coop series products for customers who prioritize reliability and quality," he said.

Rist added that Coop-branded products introduced in 2018 have also grown increasingly popular in recent years. "We've taken clear steps to support that. For example, we've emphasized the fact that all Coop-brand bakery, dairy and meat products are produced in Estonia," he said.

There are no fixed category limits for private label goods and the retailer regularly adds new items based on demand and consumer inquiries.

Coop does not publicly disclose the manufacturers of its private label products.

According to Rist, sales volume often depends on whether branded competitors are running strong marketing campaigns or special promotions. "That said, private label sales have been growing faster than overall sales — though increasing the share of own brand goods is not an explicit goal for us," he explained.

He also noted that sales performance varies depending on the brand under which a product is marketed. "For example, in the case of value lines like the Säästu range, private label products can often outperform branded ones, especially in today's economic climate," he said.

Rist confirmed that Coop plans to continue expanding its product range.

"Coop remains the largest seller of Estonian-produced food among retail chains in Estonia and we aim to uphold that principle in our private label offerings as well. When choosing manufacturers, we prioritize local producers alongside price and quality. That's why all Coop private label dairy and meat products are made in Estonia," Rist said.

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