Impacts of no-name products (dairy) on market shares and price development
The dairy market develops turbulently. Prices of dairy products for milk producers, processors and consumers ride on a roller coaster. Today a large share of the raw milk is sold as no-name products. Is this a blessing or a curse for the actors?
In the past ten years prices of agricultural products have become more volatile. In particular, price peaks and drops have reached so far unknown dimensions.
Milk producers, processors as well as retailers and consumers have to cope with that new market framework. It appears that especially milk producers are subjected to a high competitive pressure when market prices are low. This often jeopardizes their economic existence.
Identifying possible causes for the poor economic situation of milk producers in phases of low market prices is essential to better understand competition processes of the dairy market. This is particular relevant for the marketing of dairy products. No-name products play an important role, because large parts of dairy products take part as no-name products. As sales opportunities of branded products with higher added value are limited, no-products represent a possibility to mitigate market pressure. Thus, we have to review if competition is effective or is impeded by the rise of no-name products.
Economy and policy.
Analysing competition processes at the level of retailing with simultaneous consideration of consumer behaviour is only possible if data of a consumer panel is utilized. We therefore analyse a data set of the ‘Gesellschaft für Konsumforschung’ (GfK) which comprises the following categories of products:
The analysis covers the period from January 2012 to December 2015. We are applying the following research methods:
With methods of descriptive statistics we outline the development of the market share of no-name products in the above mentioned categories of products over time.
By applying a hedonic price analysis we can capture the relationship between the price and the characteristics of a product. With this knowledge we can draw conclusions about consumer behaviour.
The question of market power and of a possible abuse of that power by retailers cannot be answered directly with this type of data. However, with specialized econometric techniques we can collect indicators.
We consider the development of the market share of no-name products (dairy) in retailing since 2009:
2.2018 - 12.2020