One key word emerges from The Grocer's Own Label Supplier Survey this year: quality. All our winners, as voted for by buyers of the UK's top retail and wholesale businesses, provide product that outshines the competition. Some even surpass the top branded names in each category, according to the buyers.

And there's a good reason. Competition has never been so intense. Own label now makes up nearly £35bn of grocery sales each year in the UK, according to Mintel, which projects that figure will rise to more than £36bn by 2011. Currently own label accounts for about 40% of total food and drink spend. But supermarkets have grown their own-label businesses to such an extent that in most cases it now represents 50% of sales. Wholesalers and buying groups have also taken to own label, and many now stock their own brands in every category. And of course, in some cases, such as Marks & Spencer and discounters Aldi and Lidl, it makes up nearly all their sales.

Own-label contracts can therefore represent a massive sales boost to suppliers. "Own label can represent such a huge volume that your factory is going to be busy all year round," says Tarlok Teji, head of retail at Deloitte. "That means there's a strong desire to work with retailers on own label. I know one supplier who even has a separate factory set up just for own-label production."

Unlike 10 years ago, when price would have been the main discriminating criterion, quality now comes first. "Innovation and quality are absolutely foremost," says Stephanie Chafor, central buyer at Waitrose. "We have to be so proud of the product to be willing to put our own name on it and that means suppliers producing to our own really high standards - unlike brands, which look after themselves."

So for the winners of our survey, there can be no greater pat on the back. The results this year show how tough the market can be. Of last year's 12 winners, just three reappear on top of the rostrum this year. Premier Foods wins the canned foods category again, Tangerine wins the confectionery category for the sixth time running and FFI the coffee people take top spot in the hot beverages category for the third year in a row.

The remaining 10 categories have gone to names that did not win last year and some have never featured. In some cases this is because new categories have been added to the awards. Bakkavor Mariner, for instance, wins the soup category, with one buyer stating: "Bakkavor has helped improve our market share and the quality is excellent."

But in most cases it is innovation and commercial strategy that has won over the buyers. Some of the awards' regular winners have lost out to more dynamic competitors. McBride had won the household category every year since the awards began - an amazing seven times - but this year it is ousted by Jeyes. It impressed for "bringing forward regular ideas for new own-label products," according to one buyer.

And Arla Foods would have been celebrating a fifth consecutive win in the dairy and yellow fats category. But this year Robert Wiseman was the buyers' favourite. One buyer praises Robert Wiseman's account manager "who was fully supportive of the business through a very turbulent dairy market during 2007." The company was also commended for its "excellent availability and commercial support".

The other winners are Lyons Seafoods (meat, fish & poultry), United Biscuits UK (biscuits & cakes), Hill Station (frozen foods), Gaymers Cider (alcohol), Tulip (chilled foods), Gerber Juice Company (soft drinks) and British Bakeries (bread & morning goods). All our winners go through to The Grocer's Gold Awards later in the year, where they get the chance to be named UK's Best Own Label Supplier.

And the winner of that will certainly deserve it. It has been a tough year for all suppliers, with rising raw material and energy costs taking their toll. The own-label suppliers that have dealt with these while maintaining the highest service levels stood out. Certain categories have been hit particularly hard. "The past year has been unprecedented with the rocketing cost of milk as a result of surging global demand and lower than normal domestic production because of poor weather," says David Peat, national accounts director at Robert Wiseman.

But he points to his work with Tesco to illustrate how great service can still be achieved. "Segregation of all our fresh milk supplies to Tesco is one of the most difficult but rewarding examples of collaboration with a retailer for many years. The process of identifying farmers to join a segregated pool of milk producers exclusively supplying Tesco provided many challenges, not least ensuring the milk could be segregated throughout the supply chain."

Ice cream maker Hill Station has also found it tough. "With the dairy industry being in crisis this past year we have found it harder," says CEO Cliff Carter. "Skimmed powder has trebled in price and double cream has doubled."

It also faced the not inconsiderable distraction of almost going bust at the start of last year. But it has been able to maintain its focus on high quality product. One retailer asked Hill Station to reformulate an own-label product from a different supplier that was receiving complaints about iciness and poor texture. "We rectified the problem in a couple of weeks," says Carter. "We have done trials and will be factory producing shortly. We have also managed to complete the changes without having to change the ingredient listing or packaging, again saving cost for the customer."

Indeed, our survey is littered with examples of suppliers going the extra mile for their customers. FFI the coffee people was challenged by The Co-operative Group late last year to redesign the labelling on their entire range of own-label coffee and chocolate drinks to reflect the retailer's new logo, and all within five months, before Fairtrade Fortnight started on 25 February this year. "Considering packaging lead times, design approvals and the approval of various bodies that have to be factored in, this was a considerable task," says Austin Sugarman, sales and marketing director. But they did it.

Lyons Seafoods helped reduce wastage across Sainsbury's ready-to-eat shellfish range and improved on-shelf availability.

And even when things go wrong, finding a speedy solution can often be just as impressive as having the smoothest of years. Bakkavor Mariner launched a new soup range in Waitrose in October last year backed by a significant two-for-£3 promotion on the £1.99 products. This was off the back of category research Bakkavor Mariner had done to remove duplication and to simplify the tiering to make it easier to shop in-store.

But the labels on the new pots arrived scuffed and could not be used. "This obviously caused service issues and if not resolved in extra quick time would put the whole promotion and supply of soup at a national level at risk," says Sarah Thorneley, commercial manager for soups and sauces at Bakkavor Mariner. "Under normal circumstances this would mean a number of heated phone calls between Waitrose and Mariner and then in turn between Mariner and the packaging supplier. But in this instance, rather than play Chinese whispers, all three parties involved sat round a table at Waitrose head office to find a solution."

The importance of this kind of collaboration has come as a result of the way in which own label has evolved. "Own label has a life of its own," says Teji. "It used to be a way for retailers to offer an equivalent product at a cheaper price. Now it has spread all through the quality offering, from the cheaper end, to standard own label competing with the brands, to the luxury end that is often better than the brands. It's a great way for a retailer to make a product unique to itself."

And it continues to evolve. The growth of trends such as healthy eating, environmentalism and sustainability are now at least as important, sometimes more so, for own-label products as they are for branded.

"More than ever we have seen retailers placing a greater importance on consumer insights to drive product and category solutions," says Mike Rennie, sales and marketing director at Gerber Juice Company. And he thinks own-label suppliers can provide valuable category insights. "Good own-label manufacturers can offer a completely unbiased view that is trusted by retailers - in a way that brands can only dream of."

Health is one of the key issues for Tangerine, which has been busy switching its confectionery lines to natural colours and flavours over the past 18 months.

And ice cream supplier Hill Station has also been asked to reformulate along healthier lines. "Retailers are becoming more health orientated, requesting removal of hydrogenated fats, asking for less additives and no artificial colours and flavourings," says Carter. "We see a huge growth this year in soft scoop and one-litre lines and retailers are asking us to create cleaner ingredient recipes, which is different from the previous soft scoop offerings on the shelf."

Green credentials are now also part and parcel of the own-label offering. Robert Wiseman has invested heavily to reduce its impact on the environment by trialling alternative fuels for its distribution fleet, reducing the amount of waste it sends to landfill and in the construction of its new Bridgewater dairy "which will be one of the most efficient and environmentally advanced fresh liquid milk dairies in the world", according to Peat.

Lyons Seafoods, too, has focused on buying with the environment in mind. "The majority of our materials are now from sustainable sources and the percentage continues to grow," says commercial director Paul Vita.

And all this needs to happen without reducing the quality. Salt levels now need to be significantly reduced for instance, but the product still needs to pass a taste test. "Retailers are trying to create a point of difference with own label," says Teji. "The ingredients, the shelf life and the labelling all occur as a result of collaboration, but ultimately the retailer controls the product."

This shows just how hard it can be to become one of the UK's top own-label suppliers. Not everyone passes muster. "We are more frequently let down on availability these days than we would like, and that's all through the supply chain," says Gordon Walker, trading controller for Landmark Wholesale. "It is one of the areas where suppliers are taking costs out, but you need to make sure you have top-quality service levels to sustain that. Otherwise you end up running around trying to fill gaps and it makes things worse."

But in general, buyers appear pretty happy, and they understand the pressures their suppliers are under. "It's getting more and more tricky for own- label suppliers to survive," says Chafor. "Product quality has never been so good, everyone is looking to cut costs in the supply chain and consumers expect convenience with quality."

But there's nothing like a challenge to mark out the best. "The cream is rising to the top," Chafor adds.n