Own label is undergoing a revolution.

In particular, Tesco, Waitrose, M&S, Sainsbury's and, most recently, Asda, have been transforming entire ranges. And just to emphasise the point, The Grocer Own-Label Food & Drink Awards closed last week with a record 535 entries, almost double last year's figure.

What's driven this astonishing burst of creativity? The logic of investing in own label is by no means infallible: after all, what's the point of buying own label, some could argue, when the branded equivalent is on deal for the same amount, or less?

The fact that so much of the recent innovation is at the premium end is also counter-intuitive, given the public sector job cuts, and concern about the strength of this recovery.

But the supermarkets are rethinking the way they do own label and, driven by changes in consumer behaviour, it's as clever as it is exciting. In some categories, of course, own label can't hold a candle to big brands, though it is often useful to counter a brand (and increasingly it is a single brand), offering price and range choice upwards and downwards.

In categories such as ready meals, however, the tables are turned. And the innovation is inspiring. In Marc Bolland's presentation last week, he rightly identified the need to cherish the point of difference at M&S. Others, such as Tesco and Waitrose, are already one step ahead, which is why they are leading the field in ready-meal sales growth.

In Tesco's development of exclusive branded ready meal ranges such as Ken Hom, Levi Roots and City Kitchen, or Menu at Waitrose, these players have proved that a supermarket is not only a brand in its own right, but has the power and ability to create game-changing new ones that are equally compelling.

Recent deals to sell new films and new albums exclusively in Tesco are proving patchy. But on ready meals, it seems to be Insatiable.

And what of the own-label suppliers? With Uniq, Premier and Bakkavor all encumbered by financial constraints, the proposed merger of Northern Foods and Greencore, announced this week, looks both attractive and opportune, as its scale and complementary client base can achieve significant synergies, while a new five-year finance deal gives new CEO Patrick Coveney - a very capable leader - the financial headroom to express himself.

Ultimately, the merger will stand or fall on its responsiveness to customers. That will be the challenge. Mergers and acqusitions can too often distract a company as its focus is inwards. The danger for Essenta is that, by the time it's ready to look up and out, the opportunity will have been stolen by smaller, more nimble rivals.

The same can also be said of The Co-op's acquisition of Somerfield, of course, although the nimble rivals are in this case much larger. At least now, with the conversion of the stores on track to complet by March 2011, it is back in expansion mode, with plans to add 10% more stores over the next three years. And with additional plans to make better use of its membership card, it can look forward to doing what it's needed to do for a long time: pay attention to its customers.

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