El artículo fue escrito por Andrea MeneghiniCEO Food Retail Italy, author of a study on the Latin American markets developed at NielsenIQ and presented by Meneghini during the TuttoFood 2026 fair in Milan. Both TuttoFood and Alimentec Bogotá form part of the Anuga international circuit, one of the most important weekday platforms in the world for the food industry and retail. Andrea Meneghini He will also be one of the main international invitees of this edition of Alimentec, where on Sunday (11 June 2 pm) he will share analyzes and perspectives on the evolution of retail and discount formats in Latin America.
The distributor's brand was not created to respond to a sophisticated demand in the market, but simply because retailers need margen and consumers need to be shocked. Everything else - the narrative about the equivalent quality, the evolution of the relationship between the teacher and the customer, the construction of identity through the surface - takes place later, as the rationalization of a decision that had much more pragmatic roots. Understanding why DCS exists is essential to correctly interpret what it means in a specific market and, above all, to avoid confusing the effect with the cause.
The first engine construction of the distributor's brand is arithmetic, not cultural. An industrial brand - whether a large food company or a medium-sized manufacturer - gives the retailer a brute margin which normally varies between 18% and 25% above the price it sells to the public. This company incorporates list costs, promotional contributions, logistical costs and, in most cases, a large part of the marketing requirement that the manufacturer must support to maintain the demand for its product online. The retailer captures this difference, transfers a part to the consumer through promotions, another part to its operational costs and retains the rest.
With the brand of the distributor, the mechanism changes radically. The retailer becomes part of the production committee - many times it entrusts itself to a copacker and, on occasion, to its own brand manufacturer who uses the same production line with a different label - eliminating the intermediate margin of the industrial brand. The result is a brute margin that can rise between 35% and 45% above the price sold to the public. This difference, between ten and twenty proportional points per reference, is the fundamental economic reason for whichever modern distribution chain, regardless of geography, tends to increase in size of MDD when it has the operational conditions to do so.
It is not a "cultural" decision of the retailer. It is a rational response to a sense of profitability in which the financial costs increase, the volumes become tired and the competence erodes the prices of the sale.
The second engine is the crisis. DCS grows systematically at the times when the real income of families contracts: it occurred during the 2008-2009 recession in Europe and the United States, and began to occur between 2022 and 2023, when food inflation reached levels of two days in many western markets. When the economy stabilizes and purchasing power begins to grow, the pace of MDD tends to decelerate or even retreat marginally.
This phenomenon was analyzed in depth during the McKinsey State of Grocery Europe 2026. By 2023, 55% of European consumers said they were actively seeking fear; By 2026 this rate dropped to 46%, while the intention to buy premium products moved to positive territory. MDD has not disappeared — its growth in the EU-11 will increase by 40% in 2025, growing by 0,4 percentage points —, but its expansion trajectory will decelerate compared to the previous two years.
This pattern is relevant because it reveals the true naturalness of the phenomenon: DCS does not grow because the consumer prefers it in an absolute form. It appears that, in a given economic context, the consumer cannot afford the alternative. When the alternative becomes accessible, part of these consumers revert to the industrial brand. The behavior is guided by the pressure of the price, not by a preference built exclusively on the quality or identity of the teacher.
The discount model as structural imposition
The third motor is the greatest mechanic of all. Aldi, Lidl, Mercadona in Spain or D1 in Colombia keep portions of MDD in their range that range between 70% and 90%, not because their customers have consciously chosen to prefer their own brand, but simply because they don't offer much more.
The hard discount model is built on a short scale with respect to the dimensions of the sales point and on a rapid rotation of products, with brands supported precisely thanks to the absence of the costs of the industrial brand. The consumer who enters one of these stable stores is not necessarily expressing a preference for the MDD: he is accepting the conditions of the format which, also for price reasons, has been elected as a point of purchase.
This distinction is crucial when analyzing aggregate data. In Spain, Lidl records an MDD rate of 82% within its stores and markets of 75% (Discount Retail Consulting, 2024). These numbers contribute decisively to the Spanish national average, but do not reflect a cultural preference of the Spanish consumer; reflects the structure of the dominant retail format in this country.
Suiza records the highest private label share in Europe: 52,3% above the total market (NielsenIQ/PLMA, 2025). If we follow the logic of “cooked food as an indicator of sophistication”, we would conclude that the consumer is the most sophisticated in Europe. The interpretation would be erroneous. The brand is structurally inflated by two factors: the integrated model of Migros — which internally produces more than 20.000 references through M-Industry, its manufacturer branch — and the enormous penetration of discounters in the shopping habits of domestic families. It's not a preference. Es estructura de canal.
Germany offers a more illustrative case. The national price of private labels in grocery reaches 36% (NielsenIQ, 2025). But this average hides a very clear polarization: Aldi and Lidl, which now represent a very relevant part of the German market, operate with MDD shares higher than 85%. In exchange, traditional supermarkets such as EDEKA are located at much higher prices, at a discount of 25-30%.
Ese 36% do not describe the behavior of the German consumer. It describes the dual structure of German retail, where a significant part of purchases are made in formats that practically offer no alternative.
The same occurs in Belgium, where Colruyt exceeds 50% in volume with its brands Boni Selection and Everyday, and in Austria, where SPAR obtains more than 45% of its food turnover through private labels (SPAR Press Release, 2024). In both cases, they are the retail models of retailers - concentration of product, product integration and aggressive price positioning - which explain the cuisine much better than any theory regarding the sophistication of the consumer.
Latin America: a different model
The Latin American case is probably the most useful for separating dynamic areas because it makes them visible without superpositions. DCS is growing rapidly throughout the region, but the driver only occurs in a context of low acquisition capacity.
Discount stores like D1 in Colombia — now the country's first retailer for twenty, with more than 2.800 items and 21.56 COP bills in 2025 — use their own brand not only as a qualitative differentiation tool, but also as an economic access tool for segments of the population that previously bought in them traditional channel: neighborhood shops, bodegas and popular markets. ARA, a Colombian discount chain of Portuguese origin, follows the same model exactly. Bodega Aurrera in Mexico replicates the logic of small consumers entering a market where modern distribution still has partial penetration.
The growth of these formats has undermined the normal trade because consumers have developed a preference for the MDD, until the discount offers an overall lower price for a limited discount and, in many peripheral areas, it has converted to the point of sale that is more accessible both physically and economically.
Colombia and Mexico currently represent the largest private label markets in Latin America in terms of value of goods. Ecuador recorded a 300% growth in private label gas between 2019 and 2023, a figure that reflects the speed of adoption of a distribution format, not the sophistication of the consumer.
The consumer who buys MDD in D1 in Bogotá and the one who buys a premium private label in Albert Heijn in Amsterdam apparently achieve the same action, but with completely opposite motivations. In the first case, the purchase is determined by the absence of accessible alternatives. Secondly, it is an active election in favor of a product that the retailer has positioned as qualitatively equivalent to the industrial brand at an affordable price.
Treating both cases as manifestations of the same phenomenon is an analytical error that inevitably leads to equivocal conclusions.
¿La MDD es una herramienta?
Yes. It is a marketing strategy for retailers, a horror strategy for consumers with low economic pressure and, in some countries and retailers, it can also be interpreted as a real alternative to industrial brands. However, it cannot be used as an automatic market price indicator. Noting that the consumer has developed a more conscious relationship with the sense does not necessarily mean that the industrial brand is losing relevance for intrinsic reasons.
The correct question, when analyzing MDD data, is not that high. The real question is: “Why does this consumer buy it?”.
If the response is “because there is no other option within the sales point” or “because there is little price pressure”, the data describes a contextual condition, not a preference. If the answer is "because the retailer has built a qualitatively credible offer and the consumer chooses alternatives", therefore the data describes something much more structural.
The difference completely changes the interpretation and, consequently, the strategy, both for the person producing MDD and for the person who must compete against it.
