Organic Private Labels as Sources of Competitive Advantage—The Case of International Retailers Operating on the Polish Market

Abstract

The main aim of this study was to determine how chains of modern international retailers can achieve a competitive advantage (CA) by introducing private labels (PLs) in the organic category and can, in turn, stimulate the consumption of food produced with respect to sustainability principles. The research was conducted with the use of a qualitative approach and involved two steps. First, in order to select retailers with organic private labels (OPLs) and producers delivering products under OPLs, in-depth semistructured interviews were conducted with the representatives of management boards of 17 enterprises. Second, in order to analyze the assortment-based competitive advantage of the OPLs in depth, 8 enterprises were analyzed. In order to explore the price-related competitive advantage, three products offered under PLs, organic PLs, producer brands, and imported brands were selected for subsequent analysis. For retail chains, it was found that the introduction of OPLs is the source of CA via six contributors, namely, price, range of assortment, type of PLs, image of the retailer, sustainability and specific process, and product-related attributes of organic food. Extension of offers with organic private labels makes it easier for consumers to buy organic food at more affordable prices and follow the principles of proper nutrition and a sustainable diet with low environmental impact. At the same time, the international retailers can position themselves as chains contributing to more sustainable consumption.

1. Introduction

1.1. Private Label

Private labels (PLs, i.e., own brands) are becoming increasingly important [1] in the consumer decision-making process [2,3,4,5,6,7,8,9,10,11] and support the creation and attainment of a competitive advantage by various enterprises [12].

Products under PLs are sold under a retailer’s brand, which may be the retailer’s own name or a name that is used exclusively [13] and known as a home brand, store brand, or own-label brand [14]. PLs can also be described as a retailer-owned private label brand [15], private label brand (PLB) [9], store brand [2,5,16,17,18], own brand [5], private label [1,10,18,19,20,21,22,23], or private brand [11]. Some researchers use other descriptions, e.g., private label (store) brand [6] or private label product [24].

The importance of PLs in global retail trade is increasing [10,20,25,26,27,28,29]. According to the Nielsen Report, a new retail revolution connected with the development of private label products is currently taking place. Retailers are innovating in order to meet consumer expectations and are stretching PLs from premium to budget segments. The largest markets for PL products are to be found in Western European markets [25]. According to the Private Label Market’s (PLMA’s) 2017 International Private Label Yearbook, the market share of PLs was equal to 40% or above in 7 out of 20 European countries, namely, in the United Kingdom, Germany, Austria, Belgium, Switzerland, Spain, and Portugal. More countries recorded a share of 30% or above, namely, Denmark, Sweden, Norway, France, Poland, Hungary, Italy, the Czech Republic, and Slovakia. The largest market share increases were noted in Austria (up to 2.8 p.p.), 43%; Germany (up to 2.1 p.p.), 45%; and in Poland (up to 1.4 p.p.), 31% [30].

The increase of PLs shares is related to the ongoing concentration in retail trade and the growing share of large international retail chains [31]. Large international retailers are perceived as trendsetters in relation to lifestyle, consumer behavior, consumer experience, digital preferences, etc. [32,33] In Poland, the share of large-scale formats has been increasing since 1998 in the structure of retail trade. In 2017 the total share of the value of large format stores in fast-moving consumer goods was approximately 57%. The detailed structure was as follows: discount stores (31.7%), supermarkets (10.5%), and hypermarkets (14.9%) [34]. In 2008, for example, the total share of large-scale formats was equal to approximately 34% [35]. Poland is perceived as a leader of PL development in Central and Eastern European countries [30], and the number of PLs has been on the rise for the last 20 years in this country. Initially, PLs were introduced as economic brands characterized by a lower price by ca. 40–50% than producer brands and by small assortment diversity [36]. PLs’ dynamic development resulted in a rise in market shares and in strengthening the competitive position of individual retail chains. This influenced retailers to decide to introduce PLs in new product categories, i.e., with more added value [37]. Currently, PLs are available in nearly every product category; thus, they constitute an important element of the competition. Changing consumer preferences and growing interest in organic food have become factors determining the development of PLs [37,38].

PLs are available in a wide range of product categories, from food to cosmetics and other shopping products such as textiles, household appliances, and electronic devices [39]. Recently, retailers have begun offering PLs in such categories as organic, health, and wellness products. Some studies have pointed out that consumers are interested in products produced in a health-, environmental-, and social-friendly manner [40,41,42,43,44,45,46]. This is linked with growing consumer concern in relation to product origin, environmental impact, and nutritional value—for example, products such as coffee, tea, cocoa, and palm oil that are available under PLs must deal with important environmental issues, e.g., waste management, water saving, soil erosion, and crop protection [47].

Over the years, the evolution of how PLs are perceived was observed via the price–quality strategy, product types, and differentiation. Trade researchers present three types of PLs: economy PLs (low-quality tier or generics), standard PLs (mid-quality tier), and premium PLs (top-quality tier) [21,48]. Some retailers introduce standard and economy PLs to complement the standard line of private label products (SPLs) with a special “economy” private label (EPL) [8,19]. Economy PLs positioned as a budget, low-priced, or low-value private labels comprise elementary products in basic types or varieties with little marketing support [19]. Standard PLs are perceived at a higher quality level than economy PLs [8].

A very important stage in PL development was the introduction of premium PLs that were positioned in higher price–quality segments. Some retailers distinguish between premium private labels (PPLs) and value private labels (VPLs) [48], and premium and economy PLs [23]. Some retailers use brand positioning strategies to distinguish premium PLBs from classic PLBs [9] and standard PLs [49]. Contrarily, manufacturers often refuse to produce economy PLs as they want to supply only premium labels that will satisfy consumer needs and maintain a positive image [17].

The introduction and development of PLs determines a broad range of advantages for retailers [3]. PLs have higher profit margins than other products, which results in greater profits and leads to maximizing total retailer profitability [13], yet retailing companies introduce PLs not only to gain profits [13,50].

In recent years, PLs have been analyzed as a tool to create and achieve a competitive advantage [12]. PLs can build store loyalty [51,52] and influence product usage [22]. This can be associated with opportunities for companies to achieve differentiation [2,51,53] and positioning [2].

PLs can also build and strengthen strong consumer relationships [53]. This is the result of adequate relationship management that leads to consumer satisfaction, trust, and commitment. Successful PLs can personalize a customer’s shopping experience through greater acceptance that can, in turn, create higher customer loyalty [39,53]. PLs are also perceived as a means of competing for the rational consumer versus the value innovator [13].

1.2. Organic Food Sector in Poland

The organic farming sector in Poland, just as in many other Central and Eastern European countries, has experienced tremendous growth in the last decade in the production area due to policy-driven incentives for conversion to organic production. In 2016 the number of farms was 22,369, with 536,579 ha under organic production (approximately 4.0% of utilized agricultural area). Despite this significant growth of organically managed land in Poland, the domestic organic market is still considered to be immature [54]. Even though there were 705 organic processors representing various branches in the year 2016, the supply of domestic organic processed products continues to remain low [55].

Organic food is commonly described as the product of a farming system which excludes the use of chemical fertilizers, pesticides, growth regulators, and synthetic feed additives for livestock. Irradiation and the use of genetically modified organisms (GMOs) or products produced from or by GMOs are generally prohibited in organic production.

Use of the term “organic food” refers to Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labeling of organic products and repealing Regulation (EEC) No 2092/91, as it sets out the principles of organic production and defines how organic products should be labeled.

As a result, the range of products offered in organic quality is limited. A serious impairment to creating a diverse assortment offer is the reluctance to cooperate and the lack of a professional organization dealing with organic logistics and sales, which negatively impacts the potential for creating a common offer, particularly in relation to small-sized organic farms. Another issue that appears to be a crucial factor towards further development of the organic food market in Poland is the structure of sales channels and the prices for organic products.

Wier and Calverley [56], in their multifaceted analysis of factors determining the development of organic food markets in Europe in the late 1990s, have argued that the conditions for developing organic food markets are related to a high level of supermarket sales. However, sales through supermarkets pose various challenges to the organic sector in countries with a low supply because they demand large quantities of organic products of a homogeneous quality, delivered to schedule and supported by professional promotion [57]. These conditions, despite many policy-related initiatives and financial support, are still difficult for the organic sector to fulfill. Poland has three main channels of organic products: specialized organic food shops, hypermarket and supermarket chains, and direct sales from farmers and processors. The online sale of organic food is developing very quickly, particularly when it comes to processed organic products and non-food. However, there are also many initiatives that directly link farmers and consumers via online delivery systems. However, there has been a growing presence of organic products, including in mainstream channels such as discount stores and hypermarkets, which was one of the key drivers of the current growth in value of 10% as recorded in 2016 [58]. Data collected in a recently completed project on the organic food market in Poland shows an increased retail focus on organic products, with PLs gaining the share in branded organic sales. The main driver of organic sales growth is expected to be the introduction of new product types and the extension of already-established private labels and branded product lines to also include organic products [58].

In the past, organic packaged food was only available in a very limited number of specialized outlets. An improving economic climate and a growing focus on health are the main reasons for increased interest in the organic category, with 19.4% of Poles stating that they buy organic food at least once a week [59]. Most often, organic food is bought in specialized stores and discounts. According to the consumer survey above, the top categories of purchased products are eggs, vegetables, and cereal products.

Organic food consumers in Poland tent to be better educated and well off. The most important motive to buy organic food is health but environmental aspects are gaining more and more importance. The consumer segment with the highest spending on organic food is more open to novelties but also looking for the best value for money and expecting that organic food will be convenient [59].

The forecast for organic food market development in Poland is optimistic. According to the Euromonitor Report on Organic Packaged Food in Poland, sales are expected to increase by 24% in 2016–2021. In the forecasted period, competition should increase due to the development of private labels and new entrepreneurs entering the market [58].

1.3. Competitive Advantage

In recent years, PLs have been perceived as a tool to gain a competitive advantage for retailers [5,6,12,37,53,60,61,62,63,64,65,66]. Development of PLs is associated with the processes of concentration in trade and retailers strengthened their positions in distribution channels. It enabled integration processes, increasing the bargaining power and competitiveness of retailers. In these aspects, PLs should be analyzed as outstanding resources connected with sustainable competitive advantage (SCA) [31].

Competitive advantage (CA) is defined as “an advantage of higher ability of competition, [and] it is the core of capacity of economic and business activities in markets where competition exists” [67]. It is described as the factor that differentiates a given enterprise from others and keeps it “alive and growing” [68].

There are two basic types of CA that lead to three generic strategies: cost leadership, differentiation, and focus. The last strategy exists in two variants, namely the cost focus and differentiation focus strategies. The sources of the cost CA depend on economies of scale, proprietary technology, preferential access to raw materials, and other factors [67], e.g., process engineering skills, products designed for ease of manufacture, sustained access to inexpensive capital, close supervision of labor, tight cost control, and an efficient distribution channel [69,70]. The company can achieve cost leadership, and the objective is to become the lowest-cost producer. This state can be reached mainly through high capacity utilization, high productivity, and effective use of technology [68]. The strategy is associated with a business offering standard products with relatively little differentiation achieved by standardizing the processes [70].

The differentiation strategy allows the enterprise to be unique on the market in relation to one or more attitudes that are valued by consumers. It is associated with premium positioning resulting in higher quality and higher prices. This strategy can be achieved by using (1) branding strategies that lead to consumer loyalty towards brands, high brand equity, and strong consumer relationships; (2) unique products and superior product quality; and (3) wide distribution and promotional support. The focus strategy has two variants related to the target segments. In the cost focus strategy, the company uses a cost advantage in its target segment based on low prices. In the differentiation focus strategy, differentiation in the target segment is the main business activity that concerns the special needs and preferences of the consumers [67]. When analyzing the term “quality”, the type of business including [67,69,71,72,73,74] production, service, or retail should be taken into account.

Barney [75] distinguishes between CA and SCA, in that “[a] firm is said to have a CA when it is implementing a value-creating strategy not simultaneously being implemented by any current or potential competitors. A firm is said to have an SCA when it is implementing a value-creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy”. The resource-based theory (RBT) indicates that a CA can be created by a firm’s strategic resource, which must be valuable, rare, difficult to imitate, and nonsubstitutable [75]. Some studies analyzed implementation of the RBT in strategic management [76].

Many authors have analyzed the ways of creating CA and the drivers of CA [75,77,78,79,80,81], e.g., Kitson et al. [82] suggested that the basis for a regional CA was as follows: human capital (the quality and skills of the workforce), social and institutional capital (the extent, depth, and orientation of social networks and institutional forms), cultural capital (the extent and quality of cultural facilities and assets), knowledge and creative capital (the presence of an innovative and creative class), infrastructural capital (the size and quality of public infrastructure), and productive capital (an efficient productive base for the regional economy) [82].

A very important way of achieving a CA is the implementation of a sustainable strategy with the aim of sustainable development, including environmental protection, and reduction of poverty and global warming. Detailed activities include eco-efficiency, development of environmentally friendly products, and reputation-building [83].

The two sources of CA as presented above, resulting in both a market-oriented and a resource-based approach, can be extended by measuring the outcome of competitive efforts through firm performance (e.g., profitability) or market share stability [77].

Some authors have indicated that market orientation has a positive effect on business performance in both the short and long run in order to achieve a sustained advantage [84]. Conversely, the resource-based approach focuses on an internal environment, which is considered to be crucial. It can be extended to a resource- and competence-based view [85].

Therefore, the aim of this study was to determine how chains of modern international retailers can achieve a CA by introducing OPLs. Six contributors of CA were distinguished and identified, including price, range of assortment, type of PLs, image of the retailer, sustainability and specific process, and product-related attributes of organic food.

2. Methods and Methodology

2.1. Aim of the Study

The main aim of the study was to determine how modern international retailer chains can achieve a CA by introducing OPLs. The scope of the research covered

-

an analysis of factors determining a given retailer’s decision to introduce OPLs;

-

an analysis of the contributors of the CA, including type of PLs, assortment, specific attributes of organic food, sustainability, prices, and retailer-based advantages;

-

identification and analysis of the drivers of the CA in relation to each contributor;

-

assortment and price analysis of OPLs offered by retail operators on the Polish market;

-

analysis of the OPLs’ branding elements.

Based on the above, the hypothesis proposed in this study was as follows:

Hypothesis 1.

The competitive advantage of OPLs is a compilation of six contributors related to price, range of assortment, type of PLs, image of the retailer, sustainability and specific process, and the product-related attributes of organic food.

This study attempts to fill an important gap in the literature related to OPLs and their importance as a tool to create and maintain the retailer’s CA. There is a lack of research in the area of OPLs as analyzed from the producer’s and retailer’s point of view in the context of CA. A considerable amount of literature has been published on factors related to consumer behavior and those determining the food and non-food PL decision-making process [2,3,4,5,6,7,11,24,39,51,52,86].

2.2. Research Methods

The research was conducted using the qualitative approach, i.e., in-depth semistructured interviews and structured observation.

The semistructured interview is a qualitative data collection strategy in which the researcher asks the respondents a series of predetermined but open-ended questions [87]. It is used to gather focused, qualitative textual data. This method offers a balance between the flexibility of an open-ended interview and the focus of a structured one. It can also ensure that data on the experiences of the participants is gathered. Such information can help develop the investigation process from general topics (domains) to more specific insight (factors and variables) [88,89].

Interviewers using the semistructured interview approach generally follow a document called an interview guide or interview schedule that includes the following: an introduction, a list of topics and questions, suggested probes and prompts, and closing comments [90,91,92]. In semistructured interviews, the researcher has more control over the topics of the interview than in unstructured interviews [87,89,93,94]; thus, we decided to use this approach as the most appropriate one for the purpose of this study. The in-depth semistructured interview questions were developed based on an analysis of the literature, including qualitative studies related to organic food products, corporate reports, and an interview with two stakeholders, namely, a producer and a distributor. The detailed structure of the interview guide used in this study is provided in

Table 1. Structure of the semistructured questionnaire.

Type of Category	Scope of Topics
Topic Category	Organic Food
Main categories	(1) Retail chain policy in the field of organic food (2) Factors influencing the introduction of organic food (3) Share of organic food in total sales (4) Availability and quality of organic food (5) Environment and competition (6) Marketing strategies (7) Private labels—detailed analysis for the purpose of this study (8) Promotion (9) Financial situation (10) Risk factors (11) Perspectives of development

Source: own data.

.

We used structured in-store observation for the assortment and price analyses [95], which entail the collection of data according to a set of predefined topics and rules. The structure of the observation as well as the predefined variables were developed in line with the main purpose of the study [96].

2.3. Data Collection Process

Data was collected from August to November 2017 within a research project titled “Marketing, promotion and market analysis of organic production in Poland, including opportunities and barriers of development”, financed by the Ministry of Agriculture and Rural Development. The objective of this part of the study was to identify the development of organic private labels with the aim of obtaining more insight into the CA of retailing companies.

The research was carried out in accordance with the ethical principles related to an enterprise understood in accordance with article 55¹ of the Civil Code [97]. For the purposes of this project, we identified retail and production enterprises from the organic food sector. The owners or representatives of the enterprise’s board were asked about the possibility of conducting an interview. All of the participants of the study were provided with anonymity.

We conducted 17 in-depth semistructured interviews with specialists or experts (purchasing managers and/or sales managers) of food retailers and with board directors supported, if relevant, by category managers, and by marketing specialists in the case of organic food producers. A detailed description of the data collection process is provided in Figure 1. The sample of surveyed enterprises consisted of 9 retailers of organic food, 7 organic food producers, and one producer who was also a distributor. This group was divided into two subgroups when taking into account their OPL offer (in the case of the retailers) and production of organic food on behalf of an OPL retail chain (in the case of the producers). The first subgroup consisted of 6 enterprises, including two producing under OPLs, 3 retailers owning OPLs, and one that was both a producer and a distributor. During the in-depth semistructured interviews conducted in this group of enterprises, the issue of OPLs was discussed in greater depth.

In the second subgroup, there were 11 enterprises, including 6 retailers that did not have OPLs in their offer and 5 producers not delivering organic products under OPLs on behalf of the retailer. An additional question for the retailers during the in-depth interview concerned their reasons for a lack of OPLs, whereas the producers were asked why they did not produce organic products under OPLs.

All of the respondents gave formal consent to participate in the interviews and designated contact persons to ensure smooth communication. We also asked if we could record the interviews and there were no refusals. The interviews took place at each enterprise’s headquarters; in one case, the representative of the management board visited our university. The interviews were conducted by the researchers directly involved in the project and who are also the authors of this study. Each interview lasted from 120 to 150 min and was conducted by two or three experts.

Interviews were transcribed in a matrix based on a spreadsheet to facilitate a qualitative comparative analysis in accordance with the list of issues presented in Table 1. The data that was collected was discussed during 9 sessions involving the whole research team in order to summarize and synthesize all of the relevant aspects, in line with qualitative analyses.

We selected three retail enterprises for the assortment and price analysis, namely, Carrefour, Auchan, and Jeronimo Martins, and these participated in the semistructured interviews. Additionally, we covered Tesco and Lidl in the analysis since both are important players on the Polish retail market.

An analysis of the assortment was made by observing the store and making a list of its assortment items. The brand names, brand type, product name, size of packaging, and price for packaging were taken into account, e.g., brand name: Carrefour Bio; brand type: organic private label; origin of the product: imported product; product name: sunflower oil; size of packaging: 750 mL; price per package: 13.99 PLN.

In order to present the prospects of domestic entities, the largest Polish producer and distributor of organic products (BioPlanet) and the largest Polish producer of organic products under their own brand and for OPLs (Symbio) were selected. A producer (Wytwórnia Makaronu BioBabalski) delivering products under OPLs was also included in the group of surveyed production enterprises.

The assortment analysis covered 23 product categories (

Table 2. Range of assortment and price analysis.

	Organic Products Categories:	Information:
Assortment Analysis	(1) sugar (2) ketchup, mayonnaise, mustard (3) cereal bars and oatmeal cookies (4) flour (5) rice (6) barley, groats, and brans (7) dried fruits and nuts (8) organic preserves (9) canned vegetables and fruits (10) coffee (11) tea (12) milk and milk drinks (13) cheeses (14) butter (15) rice, soy, and oat drinks (16) oils (17) pasta (18) syrups (maple, date) (19) crunchy, muesli, and rolled cereals (20) honey (21) jams (22) superfood (23) legumes	1. number of food product items available under PLs 2. number of organic products available under producer brands 3. number of organic products available under OPLs 4. number of categories with organic products 5. number of product items per category
	Organic Products:	Product Prices for:
Price analysis	basmati rice, long-grain rice coffee sunflower, rapeseed oils	1. organic imported brands 2. organic producer brands 3. organic PLs 4. organic discount PLs 5. nonorganic PLs (premium) 6. nonorganic PLs (economy) 7. nonorganic discount PLs

Source: own data.

). For the purpose of this study, categories of organic products appearing in the commercial offer of the production companies and retailer chains were adopted. The condition for inclusion of the product category was the presence of OPLs in it. There were 5 aspects covered by the analysis: the number of assortment items available under the PLs, the number of product categories with organic products, and the number of organic products available under the PLs were taken into account. For a comparative analysis of the prices, three organic products (coffee, oil, and rice) under PLs were selected due to their availability in all of the retail chains that were surveyed. In the case of some products available under the PLs, such as coffee, tea, cocoa, and palm oil, important environmental issues, e.g., waste management, water saving, soil erosion, and crop protection, were also evaluated [47].

The organic product items were divided (when possible) into 7 groups, namely, organic imported brands, organic producer brands, organic private labels (for Carrefour, Tesco, and Auchan), organic discount private labels (for Jeronimo Martins and Lidl), nonorganic private labels (either premium or economy), and nonorganic discount private labels. The average prices were calculated for each group. In order to present the difference between prices, 100% was accepted as the average price for organic private labels.

2.4. Participants

The largest retail chains operating on the Polish market were included for the purpose of this study; an additional criterion was to have PLs in the assortment offer. Thus, the following chains were taken into consideration: Biedronka, Lidl, Tesco, Auchan, and Carrefour.

In Poland, the share of large-scale formats equaled approx. 57% in 2017 [34]. The largest retail chains are Jeronimo Martins (the Biedronka chain), Schwarz Gruppe (the Lidl and Kaufland chain), Tesco, Auchan, Eurocash, and Carrefour [98,99]. In 2011–2016, the market shares of the 10 largest retail chains exceeded 16 p.p. and amounted to 58%. The highest share belonged to Jeronimo Martins (19% for the Biedronka chain), as its share exceeded 8 p.p. [99]. All of the largest retail chains introduced PLs. The share of these chains in the sales structure of PLs exceeded 80% [100], including the share of the Biedronka chain, which was equal to 50% [98].

Participant No. 1 (Carrefour) is one of the largest multinational retailing chains in the world, operating in more than 30 countries in Europe, the Americas, Asia, and Africa. The French group’s stores offer a variety of formats and channels, including hypermarkets, supermarkets, convenience stores, Cash&Carry stores, and e-commerce. It has three operational models: integrated, franchised, and partnership stores. The group is interested in products sourced from local or national suppliers, which in 2016 represented close to 74% of all brand food products sold. In addition to brand-name products, Carrefour offers own-brand food products, namely Carrefour, Carrefour Bio, Carrefour Selection, No Gluten, Carrefour Baby and Carrefour Kids, Carrefour Ecoplanet, Reflets de France, Terre d’Italia, De Nuestra Tierra, Viver, Bon App’, Veggie, etc. [101].

Participant No. 2 (Auchan) is a multiformat retailer operating in 18 countries through city center superstores, out-of-town hypermarkets, online shopping, and drive outlets. Auchan Holding brings together 3 independent companies with complementary businesses, i.e., as a retailer, as banking services, and as commercial real estate services. Auchan Holding offers own-brand food products, mainly Les Produits Auchan (Auchan products), Le Moins Cher (which are the least expensive), Rik et Rok (products designed for children), Les Produits Régionaux (regional products), and Mieux Vivre Bio/Sans Gluten (Live Better Organic/Without Gluten), which are Auchan products that are either bio or gluten-free [102].

Participant No. 3 (Tesco PLC) is a British multinational retailer with leading supermarkets, hypermarkets, and superstores under such brands as Tesco Extra, Tesco Superstores, Tesco Metro, One Stop, and Tesco.com-only. Tesco is diversified geographically and into various areas of business activity, such as the retailing of books, furniture, toys, clothing, electronics, gas, and software, and financial and Internet services. It has over 6550 stores in 12 countries across Europe and Asia offering products ranging from “Tesco Value” items to the “Tesco Finest” range.

Participant No. 4 (Jeronimo Martins) is a Portuguese corporate group operating in the food distribution sector in Portugal, Poland, and Colombia. In Poland, Biedronka is the food retail sales leader, operating 2722 stores across the country. Biedronka offers a wide assortment of PLs under individual or category brands [103].

Participant No. 5 (Lidl Stiftung & Co., Neckarsulm, Germany) is a German global discount supermarket chain that belongs to Schwarz Gruppe. It is a private family-owned German retail group operating over 10,000 stores (ca. 9900 Lidl stores, of which 3200 are in Germany, and ca. 1190 Kaufland hypermarkets, of which 640 are in Germany).

Participant No. 6 (Bio Planet S.A.) is a Polish market leader in the production and distribution of organic food. Since 2006, the company has been offering certified organic products catering to the needs of consumers interested in bio food. The company’s portfolio assortment consists of over 4000 products, including 350 products under the Bio Planet brand (a constant offer of ca. 250 packed products). Bio Planet promotes the idea of organic nutrition with the mission “Bio Planet wants to face the challenges of the developing world by spreading environmental awareness among its consumers and promoting natural dietary components”. Bio Planet delivers organic products under the Bio Planet brand name and distributes the products of well-known manufacturers [104].

Participant No. 7 (Symbio Polska S.A., Lublin, Poland) is one of the largest producers of certified organic food in Poland, manufacturing over 300 products under the Symbio brand. The company’s main areas of activity are the production and export of food intermediates used in food production as well as production and distribution of retail products for the domestic market and for export. Its mission is formulated as “Pure nature. Nature products coming 100% from nature”. In the structure of total sales revenue in 2016, 75.1% was generated by domestic sales [105].

Participant No. 8 (BioBabalski Pasta Manufacturer; in Polish: Wytwórnia Makaronu BioBabalski) has been operating in the sector of organic food producers since 1991. The company specializes in the production of wholegrain pasta, cereal flakes, and many types of flour and groats available under its producer brand and under the OPLs of retailers. This enterprise’s mission is to popularize old cereal seeds.

3. Results and Discussion

3.1. Organic PLs—General Approach

Decisions by international retailers to introduce PLs are made at the highest levels of the corporate hierarchy. The reasons for these decisions vary and are determined by both external and internal factors. The external conditions relate to market position, macroeconomic trends, changes in consumer behavior, and country-specific implementation of corporate strategies towards PLs. Growing consumer interest in health, environmental, and social aspects in the food production process has also been observed [40,41,42,43,44,45,46]. The internal factors cover enterprise management, product portfolio, and product category. On the Polish organic food market, as compared to other markets [46], the increasing interest of both producers and retailers towards environmentally friendly practices and social responsibility in food production is being observed. This is connected with the growth and spread of sustainability certification of PLs and other branded products since sustainability certification allows to gain a premium price and premium image [47].

Among the 9 retailers, 6 had not introduced any OPLs. These included retailers that had PLs in their offer but not in the category of organic food. Three smaller retailers with Polish capital did not own PLs at all. The reason for their lack of possessing PLs was their perception of such products as being cheaper and of inferior quality. The issue of PLs competing with producer brands was emphasized as due to lower prices. The retailers also mentioned the threat of PLs.

Among the international retailers surveyed here, their OPLs have been available in their assortment of products from a period of a few years to more than a decade, and they were created specifically for the Polish market or transferred from a parent company operating on a foreign market. The strategy of introducing OPLs as used by the retailers mimics the strategies of parent companies and focuses on gradual expansion of products to the markets of other countries. The decision to introduce OPLs in case of international retailers is also driven by the supply of organic products. The timing of this process results from the implementation of adopted strategic goals at the corporate level.

An important issue related to the decision to introduce OPLs is the availability of the suppliers of organic products. Among the 7 producers participating in the first stage of research, 5 did not deliver products under OPLs; only the largest enterprises were engaged in the supply of organic products for PLs. Smaller organic producers had not taken into account production under PLs due to competition with own brands, as the economic aspects referring to cost structure were pointed out. The necessity of using unified packaging and conducting consumer research were among the reasons for not supplying products under PLs.

R2 “If the supplier is a big player, then expanding the PLs will not negatively affect its portfolio. If it is a local supplier, it cannot produce PLs because there is no such capacity. Introducing a PL with someone else may be a threat to that company. The emergence of the PL may also be a chance to cooperate.”

Our results revealed that the decision of a given retailer to introduce OPLs was determined by factors related to the suppliers’ capacities. There are several strategic options that can be distinguished:

• foreign OPLs and a foreign supplier,
• foreign OPLs and a domestic supplier,
• OPLs created for the Polish market and a Polish supplier,
• OPLs created for the Polish market and a foreign supplier.

R1: “When we started, in the first years there were mainly imported products, and from the very beginning of opening we had PL products on the market, only our PL is both local and international.”

The choice of a specific strategy is determined by market conditions related to ensuring the continuity of supplies in the appropriate quantity and quality:

• deliveries of organic food,
• deliveries for the PLs.

In the first option it is possible to have several suppliers for one assortment item to ensure the product’s continuous presence on store shelves. This approach allows the elimination of fluctuations in deliveries from individual suppliers.

The second option requires a comprehensive approach. It is necessary to acquire, for a specific product, usually one supplier who will ensure continuous supply in the correct quantity and quality. This is determined by the fact that products will be available under the brand of the retail network, thus constituting an additional mark guaranteeing quality. A different approach to both domestic and foreign suppliers results from the requirements posed by the internal quality assurance systems that are adopted by the retailers.

R1: “It is difficult to say whether the requirements are different for products, whether domestic or foreign. If we import a product from a local supplier, at the outset we determine what the quality level must be, what requirements the product must meet. Those that are imported do not assume our requirements here, this happens at the level of the country that the product comes from. Each country introducing a product takes into account the market to which the product is introduced. The products that we have on sale are made either only for our parent market or for other countries.”

3.2. Competitive Advantage of OPLs

The CA resulting from the introduction of PLs in the category of organic food is a multifaceted issue. Six contributors of CA to be distinguished are summarized in

Table 3. Contributors to the competitive advantage of OPLs.

Contributors to the CA
PLs-based competitive advantage	type of PLs brand name as a corporate brand or category name
Assortment-based competitive advantage	number of product categories types of categories specific product categories and product items innovations
Organic-attributes-based competitive advantage	health naturalness certification lack of preservatives wellness organic quality
Sustainability-based competitive advantage	certification social aspects environmental protection sustainable development animal welfare trust-based relationships Social Corporate Responsibility
Price-related competitive advantage	the price difference between organic products sold under PLs and the producer brand the price difference between organic products sold under discount OPLs vs non-discount OPLs the price difference between products sold as OPLs and PLs
Retailer-based competitive advantage	quality guarantee retailer awareness PL awareness PL perceived quality reliability good market position trend creation (forecasting)

Source: own data.

and further discussed in the following sections.

3.3. PLs-Based Competitive Advantage

The decision processes of retailers to introduce the OPLs were driven by the type of PLs (new or existing PLs, sub-brand or single brand, product or corporate brand) and the positioning strategy of the OPLs (economy OPLs or premium OPLs). In the literature, these types of PLs are described as eco-brands or sustainability-oriented brands [46].

In the case of large international retailers, most often the corporate brand was adopted as an umbrella brand for all of the assortment items (

Table 4. Description of the retailers’ OPLs.

Name of the OPLs	Description of the OPLs
Carrefour Bio	organic PLs of the Carrefour group sub-brand double brand supporting element: Carrefour as the corporate brand element ensuring individualization and identification of the organic category: Bio double associations: with the retailer brand name and organic products
Auchanbio	organic PLs of Auchan Holding new brand of France Auchan retail offering customers easier access to a wide range of quality organic products at affordable prices sub-brand for organic products and new retailing format double brand with supporting and supported elements supporting element: Auchan as the corporate brand element ensuring individualization of the organic category: bio double associations: with the retailer brand name and organic products
Tesco Organic	organic PL sub-brand of Tesco other PLs: Tesco Value and Tesco Finest double brand with supporting and supported elements supporting element: Tesco as the corporate brand element ensuring individualization and identification of the organic category: organic double associations: with the retailer brand and with organic products
Bio Organic	organic PLs of Lidl Stiftung & Co. category PLs dedicated to organic products brand name of OPLs without a corporate name single association: with organic products
goBio	organic PLs of Jeronimo Martins in the Biedronka chain category PLs dedicated to organic products brand name of OPLs without a corporate name single association: with organic products

Source: own data.

). This resulted from the business strategy at the corporate level. The presence of a corporate brand in the OPL’s name is a supporting element and simultaneously provides a specific quality guarantee. The second element (bio or organic) supports both individualization and identification of the organic category.

This approach is crucial for further development of the PLs in the retail chains, with the PLs in the basic product categories [8,19]. It allows to extend green product lines [46] and distinguish premium PLs from economy PLs [9,49] since it is related to positioning in the higher quality and price segment [48] and aimed to satisfy consumer needs [17].

Our study revealed that the introduction of OPLs into the portfolio of international retailers was connected with the decision to change the brand architecture in order to specify brand roles and the nature of relationships between brands. The extension of PLs in the organic food category by international retail chains resulted in the transition from a branded house strategy (e.g., Carrefour, Auchan, Tesco) towards a sub-brand strategy, e.g., in the Carrefour chain to Carrefour and Carrefour Bio, in the Auchan chain to Auchanbio and Auchan economy, and in the Tesco chain to Tesco Organic, Tesco Finest, and Tesco Value. However, the discounts accepted a house of brands strategy, e.g., goBio, Melly, Prawdziwe, and Delikate at Jeronimo Martins and Bio Organic, Pikok, Pilos, Cien, and Fin Carre at Lidl.

An important element shaping the CA of OPLs is their image depending on the type of PL and the image of the retail chain. These factors strengthen the image of organic food perceived as one product category. For this reason, it is understandable that sub-brands are introduced as OPLs to ensure more accurate identification. This allows a distinction between PLs in organic food and PLs in conventional food in the process of communication with consumers. It is also a tool for facilitating merchandise-related activities, e.g., by helping to arrange products on shelves and to introduce uniform visual identification. The growing role of a brand in positioning organic products is shown in the literature. Brand communication could play an important role in triggering higher levels of consumer awareness and can reinforce consumer confidence, trust, and safety of usage [41].

3.4. Assortment-Based Competitive Advantage

The existing structure of the retail trade in Poland determines the strategic objectives of retailers as covered by the research and focuses on the provision of a comprehensive assortment of products. The assortment range of organic products is enlarged by expanding both the premium and economy segments as well as by developing the PLs. Such a decision can be perceived as a strategy involving sustainability goals aimed at the development of new environmentally safe products sold at a premium price [83].

This is a consequence of the ongoing competition between retail chains that reflects, on the one hand, the different formats of retail outlets and, on the other, changing consumer attitudes. The growing global demand for organic products determines the management board decisions of retail chains to introduce such product items under PLs.

R3: “There is more room to maneuver (…), a comprehensive approach, trend forecasting, and client searches for such products, so we must have them in our offer…”

R1: “The variety of products is our strategy, we want to meet the expectations of those consumers who are looking for gluten-free, healthy, ecological, local, national and other products.”

The number of food products available under PLs in the analyzed product categories ranged from 193 (Auchan) to 401 (Tesco). This diversification results from different business strategies, including the introduction of new products and new categories under the PLs (

Table 5. Overview of PLs and organic products, including the number of categories and total product items.

Type of Enterprise	Enterprise	Type of Products and PLs	Total Product Items	Number of Categories	Product Items Per Category
Retailer	Carrefour	food products under PLs	203	19	10.7
		organic products under producer brands	274	18	15.2
		organic products under PLs	30	13	2.3
	Auchan	food products under PLs	219	16	13.7
		organic products under producer brands	193	17	11.4
		organic products under PLs	22	12	1.8
	Tesco	food products under PLs	401	17	23.6
		organic products under producer brands	105	13	8.1
		organic products under PLs	26	12	2.2
Discount	Biedronka	food products under PLs	257	17	15.1
		organic products under producer brands	8	1	8.0
		organic products under PLs	26	12	2.2
	Lidl	food products under PLs	352	16	22.0
		organic products under producer brands	9	5	1.8
		organic products under PLs	29	11	2.6
Producer and distributor	BioPlanet	food products under PLs	1539	19	81.0
		organic products under producer brands	270	10	27.0
Producer	Symbio	organic products under producer brands	198	12	16.5
	BioBabalski	organic products under producer brands	60	5	12.0

Source: own data.

). The number of assortment items of organic products under PLs ranges in the hyper- and supermarket chains from 22 in Auchan to 30 in Carrefour, while in the discount stores it is under 30. Few comparable organic products are available on offer in all the retailers and discounts that were surveyed. A detailed overview of assortment in private labels, organic private labels, and producer brands is presented in

Table 6. Overview of product items offered as OPLs, PLs, and as producer brands.

Organic Product Categories	Symbio	Bio-Babalski	Bio Planet		Carrefour			Auchan			Tesco			Biedronka			Lidl
	O	O	O	OPLs	PLs	O	OPLs	PLs	O	OPLs	PLs	O	OPLs	PLs	O	OPLs	PLs	O	OPLs
sugar	1		22	5	1	2	2	1			3	2		1			2
ketchup, mayonnaise, mustard	3		23		10	6	3	8	3	1	13			13			9
cereal bars and oatmeal cookies	9		141		23	28	9	14	11	1	21	7	2	37		2	41
flour	29	17	82	33	2	21		3	16		8			2			4	1	2
barley, groats, and brans	22	15	61	26	5	15	2	8	9		4	37	4	10			6	2	2
rice	7		37	19	5	5	1	7	3	1	13	6		8		2	6		1
dried fruits and nuts	56		137	67									1
organic preserves	15		59		15	10		5	5	3				4		2
canned vegetables and fruits			146		20	15	2	11	10	0	11	0	3	8		2	12
coffee		1	85		7	15	2	47	5	1	28	4		18		1	21		1
tea			273		15	35	2	35	21	0	77	0		50		6	55
milk and milk drinks					14	34	1	13	43		45	10		26	8	2	60		5
cheeses					38	29	1	31	11		64			38		1	68	2	2
butter					1		2	4	3		9			7			5	1
rice, soy, and oat drinks										5		3	5						3
oils	7		101		2	7	2	10	20	1	7	4	2	5		2	10		4
pasta	12	19	103		18	30		20	7	5	36	17	1	20		3	17		1
syrups (maple, date)			44	5	2	6			20										3
crunchy, muesli, and rolled cereals	25	8	98	61							20	14	1				20		5
honey			36		4	4
jams					15	10			5	3	28			4		2	16	3
superfood			19	18
legumes	12		70	34

PLs—food products under private labels, OPLs—organic products under PLs, O—organic products under producer brands. Source: own data.

and

Table 7. Organic products available under PLs.

Popular Organic Products under OPLs Available at Particular Retailers
Organic products under OPLs available at all of the analyzed retailers	basmati rice, long-grain rice coffee sunflower oil, rapeseed oil
Specific Organic Products under OPLs Available at Particular Retailers
… at Carrefour as Carrefour Bio	canned tomatoes, canned green lentils bulgur, French mustard apple mousse, apple–pear mousse, apple–banana mousse, apple–peach mousse
… at Auchan as Auchanbio	tomato sauce, thyme natural soy drink, chocolate soy drink, soy drink with calcium oat drink, almond drink spelt pasta, rye pasta orange jam, apricot–strawberry jam
… at Tesco as Tesco Organic	salty spelt sticks, salty spelt pretzels, dried tomatoes, soya rice–almond drink, rice drink, oat drink
… at Lidl as Bio Organic	linen flour bread flour muesli
… at Biedronka as goBio	frozen strawberries tomato passata, grenadine drink coconut oil, hummus, green tea

Source: own data.

.

We observed a different approach of the super- and hypermarket chains as well as of the discount stores to their introduction of PLs. Discounts develop PLs and OPLs, without or with a small share of products available under producer brands.

When comparing the number of products introduced in the discounts, it should be pointed out that there are more items of organic food, including those available under PLs, in the Lidl store chain than in the other retailers. This is a consequence of the adopted strategy towards the development of a category of organic food and food perceived as “natural and healthy”. Most of the assortment items offered as organic are imported and available in all countries where Lidl operates.

Different approaches to the category of organic food are used among the analyzed hyper- and supermarket chains (Table 6). The largest number of organic products available under producer brands (274) and OPLs (30) was observed for Carrefour. Tesco had the smallest number of organic products in the analyzed product categories (105). In Auchan there were 193 organic products, but the number of products available under OPLs was low.

Our research revealed that all of the analyzed retailers, when they started producing OPLs, tended to introduce organic products that were different from what their competitors were offering. Exclusiveness is an important competitive advantage for particular retail chains, e.g., organic pasta is available only through Tesco and Jeronimo Martins (Biedronka, Cossin, Poland) chains, while organic sugar is offered only through the Carrefour chain (Table 7). This indicates the willingness to stand out and introduce OPLs that are different from those in competing chains.

This differentiation in the assortment of OPLs fits into treating the own brand as an important tool in distinguishing a retailer from its competitors [2,51,53]. It also ensures an appropriate market position due to the adopted positioning strategy [2]. This is in accordance with the description of the comparative advantage analyzed as that which differentiates an enterprise from other enterprises [68].

A different strategy design can be observed in the analyzed Polish producers (Bio Planet, Symbio, BioBabalski Pasta Manufacturer), i.e., there is a larger number of product categories and of assortment items. They have implemented the differentiation focus strategy with organic food as the main target of business activity. This is in accordance with the description of comparative advantage as the advantage of the higher ability to compete [67] and something that keeps the enterprise “alive and growing” [68].

In the flour category, the following items are available in addition to the standard items: wheat bread flour, rye graham flour, whole rye flour, rye bread flour, buckwheat flour, oat white flour, whole oat flour, amaranth flour, millet flour, corn flour, spelt white flour, spelt bread flour, rice flour, soy flour, cassava flour, chestnut flour, quinoa flour, coconut flour, and almond flour. Basic types of flour are available in the foreign retailers’ product offer.

Assortment-based competitive advantage is also reflected in the introduction of such categories of organic food under PLs as superfoods, including baobab powder, hemp protein powder, camu camu powder, chlorella powder, guarana powder, acai powder (freeze-dried), kale powder, lucuma powder, psyllium seeds, and spirulina powder.

3.5. Organic-Attributes-Based Competitive Advantage

The CA resulting from the introduction of OPLs is “healthiness”, which is a key attribute of organic products and the main driver of organic food consumption. It can also be analyzed as an example of the healthy lifestyle trend.

R3: “…for the retailer, OPLs mean ‘promoting health’”

P1: “ in Poland, the egoistic approach—the health benefit—dominates”

P2: “…a safe product, devoid of herbicides or pesticides, it is not genetically modified. (…) it is in one dimension, such as health … “

Another attribute of primary importance is that the organic production is controlled with the third party involved in certification process.

Our research revealed that products available as OPLs were checked in a multistage process. First, the documents (of producer and products) are analyzed and the certificates are verified. Then the product and its compliance with the specification are checked. The next stage is laboratory tests, including sensory ones. This approach is related to the fact that the retailer guarantees its quality. Noncompliance with quality requirements by the supplier is treated as a retailer’s risk.

R1: “For us, the risk is one-failure to maintain the quality of the product. [If] we sell as organic, and then after the results of research it turns out that the non-ecological product must be withdrawn, a media crisis is emerging. The issue of disloyalty and falsification of the product—here is the risk. This is mainly about our brand, where we sign our logo.”

3.6. Sustainability-Based Competitive Advantage

The approach to OPLs is determined by how organic food is perceived in the context of sustainable development and environmental protection. This is an additional dimension and an additional attribute that allows shaping of the CA. Organic products are also related to benefits in terms of animal welfare.

P1: “It is pesticide-free food.”

P1: “…. crops are less harmful to the environment than conventional ones.”

P2: “[In] other dimensions, such as environmental protection, sustainable development and animal welfare (…) organic food is not only healthy, but also the philosophy of life, which means caring about environmental protection, sustainable development and animal welfare, which is very important.”

R1: “… ecological products also bring with them issues of tradition and the environmental protection that is connected with it, they have a lot of advantages related to limiting the level, processing and complexity of the product.”

Some researchers have indicated that enterprises can use brands to promote sustainability to their consumers, industrial customers, and other stakeholders [84] as well as to improve the sustainability of food production [47]. This is connected with consumer perception and interest as well as with the enterprises’ strategies [106,107,108].

Our research revealed that an important aspect determining the introduction of PLs in the category of organic food was social responsibility. It is understood as the introduction of products produced via methods that are less harmful to the environment and are a response to the needs of ever-larger groups of society.

P3: “Each retail network will build PLs, social responsibility is important.”

Another issue is sustainable consumption [43,109] and the role of OPLs in assuring more sustainable levels of consumption. This was observed in the Romanian retail system [109] as well as on the German [47], Italian [44,47], and Belgian markets [42]. Therefore, it is also very important to the retailers operating in the Polish market of organic food.

Our study revealed that the retailer achieved a CA by building trust-based relationships with suppliers of organic products. This aspect is important for cooperation with current and future suppliers. It can also be used—as was mentioned in the literature—to build the company’s reputation by increasing environmental efficiency [83].

R1: “… our goal is to maintain cooperation with suppliers as long as possible.”

3.7. Price-Related Competitive Advantage

The price competitive advantage of OPLs is determined by two factors. The first is the price that is proposed by the suppliers and that takes into account the costs of organic production; the second results from the price strategy adopted by the retailer in relation to a PL positioned in either the lower or higher price segment.

R1: “(…) our weakness, (…) the barrier is price. Perhaps now this barrier is smaller, but until recently the prices proposed by the suppliers were very high, [and] we have a rule that our own brand must be available to the customer in a given price range.”

The price competitive advantage of OPLs should be analyzed in three areas:

• the difference between organic products sold under PLs and the producer brand,
• the difference between organic products sold under discount OPLs vs non-discount OPLs,
• the difference between products sold as OPLs and PLs.

The price analysis for three products (rice, coffee, and oils) allowed us to determine the price differences (

Table 8. Prices of rice under organic PLs, PLs, and producer brands (in PLN per kg).

Enterprises	Brands	Products	PLN 1/ Per kg	Average Price	Price Difference 2/
Organic Imported Brands
BioPlanet	Amaizin	basmati quick boiled	26.68	26.53	+77.1%
BioPlanet	Davert	wholegrain	26.38
Organic Producer Brands
Symbio	Symbio	basmati white	25.98	18.38	+22.7%
Symbio	Symbio	basmati brown	23.98
BioPlanet	BioPlanet	long-grain brown	13.10
BioPlanet	BioPlanet	long-grain white	12.54
BioPlanet	BioPlanet	basmati wholegrain	16.88
BioPlanet	BioPlanet	basmati white	17.78
Organic Private Labels
Carrefour	Carrefour BIO	basmati white	14.98	14.98	100%
Auchan	AuchanBio	long-grain brown	14.98
Tesco	Tesco Organic	basmati white	14.98
Organic Discount Private Labels
Jeronimo Martins	goBio	basmati white	11.98	11.98	−20.0%
Lidl	Bio Organic	long-grain	11.98
Non-organic Private Labels
Carrefour	Carrefour	basmati white	9.98	5.49	−63.3%
Carrefour	Carrefour	long-grain	5.38
Auchan	Auchan	long-grain	2.78
Tesco	Tesco	basmati white	6.98
Tesco	Tesco	long-grain	3.98
Non-organic Private Labels (economy)
Auchan	Auchan economy	long-grain	3.85	3.32	−77.8%
Tesco	Tesco Value	long-grain	2.79
Non-organic Discount Private Labels
Jeronimo Martins	Supreme	long-grain	7.13	7.13	−52.4%

^1/ exchange rate: 1 USD = 3.4813 PLN (29 December 2017) (source: [110]); ^2/ the average price of OPLs was accepted as 100%. Source: own data.

,

Table 9. Prices of coffee under organic PLs, PLs, and producer brands (in PLN per kg).

Enterprises	Brands	PLN 1/ Per kg	Average Price	Price Difference 2/
Organic Imported Brands
BioPlanet	Cafe Michel	87.08	88.97	+29.3%
BioPlanet	Alce Nero	83.20
BioPlanet	Oxfam	80.96
BioPlanet	Lebensbaum	98.48
BioPlanet	Ale Cafe	105.48
BioPlanet	Alternativa	78.60
Organic Private Labels
Carrefour	Carrefour BIO	79.96	68.81	100%
Auchan	AuchanBio	55.96
Organic Discount Private Labels
Jeronimo Martins	goBio	39.98	39.98	−41.9%
Lidl	Bio Organic	39.99
Non-organic Private Labels (premium)
Carrefour	Carrefour	43.96	48.09	−30.1%
Auchan	Auchan	43.96
Tesco	Tesco Finest	56.34
Non-organic Private Labels (economy)
Auchan	Auchan economy	29.90	29.91	−56.5%
Tesco	Tesco Value	29.93
Non-organic Discount Private Labels
Jeronimo Martins	Biedronka	51.96	51.96	−24.5%

^1/ exchange rate: 1 USD = 3.4813 PLN (29 December 2017) (source: [110]); ^2/ the average price of OPLs was accepted as 100%. Source: own data.

and

Table 10. Prices of oils under organic PLs, PLs, and producer brands (in PLN per liter).

Enterprises	Brands	Products	PLN 1/ Per Liter	Average Price	Price Difference 2/
Organic Imported Brands
BioPlanet	Dary Natury	rapeseed oil	34.56	31.01	+95.4%
BioPlanet	Poloniak	rapeseed oil	31.04
BioPlanet	Planette	rapeseed oil	27.44
Organic Private Labels
Carrefour	Carrefour BIO	rapeseed oil	18.65	15.87	100%
Auchan	AuchanBio	rapeseed oil	15.99
Tesco	Tesco Organic	rapeseed oil	12.99
Non-organic Private Labels
Auchan	Auchan	rapeseed oil	4.99	4.54	−71.4%
Tesco	Tesco	rapeseed oil	5.09
Organic Imported Brands
BioPlanet	Planette	sunflower oil	23.64	22,48	+35.0%
BioPlanet	Planette	sunflower oil	21.32
Organic Private Labels
Carrefour	Carrefour BIO	sunflower oil	18.65	16.65	100%
Auchan	AuchanBio	sunflower oil	14.65
Non-organic Private Labels
Auchan	Auchan	sunflower oil	4.68	4.69	−71.8%
Tesco	Tesco	sunflower oil	4.69
Non-organic Private Labels (economy)
Tesco	Tesco Value	sunflower oil	4.69	4.69	−71.8%

^1/ exchange rate: 1 USD = 3.4813 PLN (29 December 2017) (source: [110]); ^2/ the average price of OPLs was accepted as 100%. Source: own data.

). Organic products available under producer brands were offered in the higher price segment. The highest level of retail prices was found to be for imported products, and lower prices were observed for organic products available under PLs as the OPLs of retail chains (Carrefour BIO, AuchanBio, Tesco Organic). Discount stores were characterized by a lower price level for such PLs as goBio and Bio Organic. The non-organic equivalents of organic products offered under the organic PLs of super- and hypermarkets as well as discountswere positioned in the lowest price segment.

R1: “Organic food under private labels will be cheaper (…) It seems to me that if someone is looking for an organic product, that person does not look whether it is a private label or a national brand.”

On markets perceived to be more advanced in terms of promoting food sustainability, the prices of many products with sustainability certification were not higher than the prices of corresponding products without the environmental label [47]. This difference can be explained by the degree of development of the organic sector and the particularly high share of large retailers in organic sales [56].

Price competitive advantage results from the actual price differences; it is also determined by the consumers’ perception of prices, which consists of how the price of organic products is perceived in comparison to that of PLs. Organic food is perceived by consumers as more expensive than conventional food. Organic products, due to the price level, are also perceived as premium food. At the same time, PLs are perceived in the lower price segments.

R2: “The price can be a strong point, showing that organic products are not only exclusive products, intended only for a selected social group that can afford such food. We increase the availability of this product group.”

R1: “The price difference between organic and conventional food depends on the product, but these are the upper limits; a few years ago it was 45%, and not 20.”

In the literature, there is a satisfactory amount of evidence showing how the prices of PLs influence perceived value and brand equity, e.g., price discounts and the brand’s perceived quality exert a significant influence on perceived value [52]. Some studies have indicated that information on both the environment and health that is placed on organic labels can influence consumers’ willingness to pay for labeled organic products [42].

On the other hand, perception of a given PL’s quality is driven by the complexity, price level, average inter-purchase time, and quality variance of the product category [16]. Such price perception is particularly important for organic products that are available under PLs due to the image of organic products as a premium food and in the context of a lower price for them.

3.8. Retailer-Based Competitive Advantage

An important group of attributes for shaping the CA based on OPLs are related to a given retail network. One of them is the perception of added value that results from the image of retailer PLs as a guarantee of quality since retailers adopt additional quality standards for development of PLs.

For consumers, the labeling of organic products with the retailer’s PL is an additional element that guarantees product quality and a proper production process. PLs also allow retailers to be in full control of the product and to take independent initiatives.

P2: “Here, value can be added to the overall values attributed to eco-friendly products if the retailer is convinced that these products under its PLs are subject to special supervision and have been specially selected. This is a double value. This is a sign of the quality of this retailer, we take responsibility for it, we have checked it. We guarantee that although this product is certified and safe, we have checked and verified it. If the retailer convinces its consumers [about] organic products under the PL of that retailer, they will be competitive with organic products under the producer brand, because this is a lower price and a double certificate.”

The introduction of OPLs is a part of the implementation of adopted positioning strategies. This allows the retailer’s market position to be strengthened on the total food market and for it to be perceived as a “trendsetter” in the organic food category.

P1: “Owning the PL builds one’s market position, one is not anonymous on the market”

P1: “the consumers of organic food are more interested in the origin of the product, its path from the field to the table; owning a PL helps to give credence to the fact that they are familiar with the production of such food.”

Our research revealed that strengthening the market position also applied to the consumer–retailer relationship. Consumer loyalty towards the retailer and its PLs is the result, on the one hand, of the competition strategies have been adopted and, on the other, of the consumers’ conviction regarding product quality, the reliability of the retailer, and the way business is done. This enhances the retailer’s positive image on a competitive market. An analysis of the literature shows the importance of PLs in the context of building and strengthening relationships with consumers [53], since greater loyalty resulting from satisfaction is built [39,53]. The “social quality” of the PLs plays an important role in perceived quality and the intention for consumers’ loyalty to be improved [111].

Another aspect of retailer-based competitive advantage is that the cooperation between the retailer and producer based on relationship management is very important. Long-term cooperation contracts are based on mutual benefits connected with trust and partner relations and eliminate frequent rotations. It has been emphasized in the literature that environmental certification determines the reorganization of supply chain relationships, which is aimed at higher bilateral dependency among supply chain players. Additional aspects can be analyzed in terms of a reduction in product uncertainty and an increased degree of vertical coordination [47].

R1: “it is rather constant cooperation. We have many examples of suppliers that we have been with since the very first day, for nearly 20 years.”

R1: “…just as every brand builds its trust, the case is the same for the domestic supplier. Every supplier builds his/her trust, a known one will be perceived better, and a less known one worse, or vice versa—it’s better because it’s from my region and I know the supplier.”

4. Conclusions

The past several years have been a period of dynamic development of PLs in both Poland and Europe. The quantitative increase in the range available under PLs has been accompanied by changes related to launching new product categories. Organic food is an example of such a category, and OPLs have become the source of a CA for large international retail chains. The research conducted here confirmed the hypothesis that the competitive advantage for OPLs is a compilation of six contributors related to the type of PLs, assortment range, sustainability, attributes of organic food, price, and retailer-based issues. The contributors identified here result from the product specificity of organic food and are related to the introduction of OPLs by international retailers. The OPLs can be also approached via RBT as outstanding resources allowing a retailer to achieve an SCA.

The following conclusions can be drawn when summing up the contributors to the CA of OPLs:

• The competitive advantage of OPLs that results from the type of PLs is due to brand architecture and adoption of either a house of brands or a branded house strategy. New PLs have been introduced for organic food with elements supporting individualization and identification of the organic category.
• The assortment-based competitive advantage can be described by the number and types of categories, specific products, and innovations. Retailers exclusively offer certain organic products that are not available in competing chains. This gives them the opportunity to underline the uniqueness of the product offer and to attract consumers who are looking for products with a specific added value at affordable prices.
• The organic-attributes-based competitive advantage is associated with health and naturalness, organic quality, and a certified process of production. The introduction of OPLs allows international retailers to position themselves as chains promoting a healthy lifestyle.
• The sustainability-based competitive advantage is determined by organic food perceived as a product category that respects sustainable development and the natural environment, and enhances a shift towards more ethical and responsible food consumption also in terms of other credence attributes such as animal welfare.
• Another important area of the CA of retailers as derived from OPLs is the management of relations with suppliers. Long-term cooperation based on trust helps to achieve mutual benefits and to reduce the risk of inadequate quality. At the same time, the perception of PLs related to the image of the retailer constitutes an additional element that guarantees, in the minds of the consumers, the quality of an end product and becomes an important contributor of the CA for retailers.
• Price positioning places the PLs of organic food below the producer’s brands and above the PLs for non-organic products. A favorable price combined with the attributes of organic food determines the growing interest of consumers in PLs. At the same time, it separates sub-brands by highlighting the various attributes of organic food that are created for the PLs of organic food. This supports the use of positioning strategies that place the OPLs in the higher quality and price segments.

The OPLs’ competitive advantage as presented above relates to large international retailers with large suppliers. It results from economies of scale and is also an opportunity to implement the principles of sustainable development and to promote sustainable production and consumption.

Our study also has some limitations. The analysis process focused on qualitative data in relation to the OPLs. This research did not address the wide range of other food products in order to provide more insight. Additional research should investigate other food and non-food products in order to evaluate retailers’ complex strategies towards PLs.

Future studies should also cover the management of supplier relations, which is important in relation to organic products. Identifying the factors that determine cooperation is a critical element to ensure the continuity of supply and proper quality of end products. It also constitutes the basis for making decisions about expanding the range of food products available under the PLs of retail chains.