Italy’s extraordinary culinary heritage: a longstanding barrier to private label

To truly understand the development of private label (PL) in Italy, it is not enough to compare its market share with that of Spain, Germany or the Netherlands. Viewed in isolation from the structure of the market, the figures risk painting a picture of a country that is simply lagging behind. The reality, however, is more complex: private label in Italy has had to overcome historical, cultural and organisational barriers far deeper than those found in other European markets.

Italy’s grocery market has grown out of a rich mix of regional cultures. For decades, it developed through local retailers who understood the eating habits of their communities and tailored their ranges to each region. There was no single Italian consumer, but rather a multitude of consumers shaped by local traditions, recipes and suppliers. This fragmentation has enriched the market’s offering, but has also made it harder to build truly national private-label brands.

When I was working in mass-market retail, it was almost unthinkable for a buying office in Bologna to select a coffee producer from the north and distribute the same product to all its members, from Piedmont to Sicily. In the south, that coffee would likely have met with resistance because tastes, roast preferences and perceptions of quality differed. The same was even more true of wine: until 15 years ago, ranges were largely regional, or extended only a little beyond their home markets.

Italian private label has therefore had to perform a difficult balancing act: bringing together different regions, retailers and food cultures without losing the distinctive character of the offer. This helps explain why it has developed more slowly than in more consolidated markets.

THE COMPARISON
WITH EUROPE

In countries where private label has a very high market share, the national figure is often shaped by the presence of one or a handful of dominant retailers. A retailer with a significant market share, a highly centralised range and a well-developed private-label business can have a substantial impact on the countrywide average.

This is the case, albeit in different ways, in Spain, the Netherlands and Germany, where the strong presence of discounters also plays a part. Italy, by contrast, remains one of Europe’s most fragmented markets: no single operator has the clout to impose a range model across the market as a whole.

Italy should therefore not simply be seen as a laggard in private label. It is a market that has had to overcome greater structural complexity to develop it. Even so, despite these distinctive conditions, private label has grown significantly faster in recent years.

INFLATION AS A TURNING POINT

The real turning point came with the inflation crisis. In June 2022, Italy’s grocery market grew by 8.8% in value, but by just 1.4% in volume. Inflation stood at 7.9%, while changes in the shopping-basket mix subtracted 0.6 percentage points, according to NielsenIQ. In 2023, the gap widened further: sales rose by 9.2% in value, while volumes fell by 2.3%. Inflation reached 12.7%, and the change in product mix shaved 1.2 percentage points off growth.

Italian consumers did not simply absorb the price increases. They changed what they put in their baskets and switched brands, pack sizes, products and channels. Downtrading meant more than buying smaller quantities: shoppers also moved towards cheaper products, replaced manufacturer brands with private label and sought out retailers they saw as offering better value.

Private label was the main beneficiary of this shift. Across hypermarkets, supermarkets and convenience stores, its share rose from 20.4% in 2021 to 21.2% in 2022 and 22.3% in 2023. Across the entire omnichannel market, including discount stores, it reached 29.8% in 2022 and 31.4% in 2023.

The most telling development came next: when inflation eased, private label did not give back the shelf space it had won to manufacturer brands.

In 2025, private label reached a 23.3% share across hypermarkets, supermarkets and self-service stores, and 32% across Italy’s total omnichannel market. The price crisis therefore accelerated a shift that appears structural rather than merely temporary.

THE MARKET PARADOX

The overall 32% share should, however, be interpreted with caution. Discounters have a decisive influence on this figure: in Italy, they account for well over 20% of sales, and private and exclusive-label products make up close to 70% of their business.

The omnichannel figure therefore suggests a market that is already mature. Yet when the analysis is limited to traditional store formats, private label’s share barely exceeds 23%.

The same national average thus masks two very different realities: on the one hand, discount stores, where own label is the backbone of the range; on the other, supermarkets and hypermarkets, where there is still considerable room for growth.

For Italian retailers, this gap represents an opportunity. But future growth will not be spread evenly across the entire price spectrum.

POLARISATION IS RESHAPING THE SHELF

The Italian market is becoming increasingly polarised. Price is coming under greater scrutiny, while premium, specialist and service-led segments are also growing. It is the middle of the shelf that is under the greatest pressure. The figures bear this out. Comparing the year-to-date figures to June 2024 with those for the same period in 2025, leading manufacturer brands remained virtually stable across the omnichannel market, edging up from 10.55% to 10.68% (NielsenIQ). Other brands held their positions, while follower brands declined from 23.16% to 22.73%. Over the same period, private label rose from 31.79% to 32%.

Competition, then, does not necessarily mean a direct battle between private label and the industry’s biggest brands. The brands most exposed are those in the middle: familiar, but not market leaders; more expensive than private label, but not always differentiated enough to justify the price premium.

Private label can grow at both ends of the market as the middle ground gradually erodes. At the value end, this means essential ranges and products with a clear, immediately recognisable savings proposition. At the premium end, opportunities lie in regional specialities, innovation, wellbeing, sustainability, gastronomy and international products.

The private label of the future will be more than a cheaper alternative to manufacturer brands. Increasingly, it will serve as a tool for retailer positioning, helping build identity, loyalty and differentiation.

A MARKET BEGINNING TO OPEN UP

A second shift is adding to this transformation. Historically, Italian grocery retail ranges have been dominated by domestic manufacturers, which accounted for around 95% of the offer. In recent years, however, there has been a gradual and sustained opening to products from abroad, particularly in larger store formats and in premium, specialist and ethnic segments.

This does not yet amount to a full internationalisation of sourcing. Most Italian retailers—with the exception of major international operators and, above all, discounters—lack the import infrastructure found in other European markets. Nevertheless, management mindsets, the make-up of demand and retailers’ willingness to consider foreign suppliers are changing.

International suppliers have two routes into the market. The first is to work directly with chains that have the scale and organisation needed for international sourcing. The second is through specialist importers and distributors already active in Italian grocery retail, which can consolidate demand, manage logistics and support products as they enter the market.

The opportunities are there both for manufacturers able to produce private-label goods for Italian retailers and for foreign brands that can add something genuinely distinctive to the range. Simply offering a product from abroad is not enough: it must bring innovation, competitive pricing or specialist appeal, and meet a need that domestic products do not fully address.

THE NEXT PHASE FOR ITALIAN PRIVATE LABEL

Inflation has accelerated private-label growth, but it does not fully explain the trend. The changes underway have deeper roots: increasingly centralised decision-making, more modern ranges, polarised consumer demand and greater openness to international products. After decades in which strong regional traditions slowed the development of a common offer, Italian private label is now entering a new phase.

The 32% share is a significant achievement, but it does not tell the whole story. It reflects the considerable weight of discount retail, while traditional formats still have plenty of room to grow. Growth will be concentrated mainly at the value and premium ends of the market, putting even more pressure on follower brands that fail to give shoppers a clear reason to choose them.

For Italian retailers, this is an opportunity to turn private label from a simple pricing tool into a genuine asset for their banners. For domestic manufacturers, it means deciding whether to compete on value, specialisation or their ability to manufacture for retailers. For international suppliers, it offers a chance to enter a market that has long been difficult to access, but is now more open, curious and willing to look beyond its borders.

(*) Andrea Meneghini has worked in Italy’s grocery market since 1996. In 2005, he co-founded GDONews, Italy’s first online magazine dedicated to retail. Alongside this, he established himself as a strategic consultant to several prominent Italian and international retailers. In recent years, GDONews became part of PR Italia Edizioni, a publishing and media group that also includes Cibus Link and Retail Link, both recognised as leading platforms in the grocery retail sector. The group has strategic partnerships with TuttoFood and CIBUS, Italy’s leading international food and retail trade fairs.