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Industry News
PLMA e-Scanner – May 2023
May, 2023
Grand French fusion in the making?
Casino and Les Mousquetaires (the Intermarche and Netto banners) are in exclusive talks to deepen and extend their strategic cooperation. The two groups want to extend the duration of their purchasing alliance, called Auxo, by two years to 2028. In addition, new partnerships are to be formed, amongst others, a purchasing alliance for private label food. The agreement equally foresees that points of sale of Casino could be sold to the Mousquetaires over a period of several years.
A few weeks ago, Casino had already agreed with Teract, a garden center, pet and food retailer, to enter exclusive discussions to merge. The latter merge would create two separate entities: one controlled by Casino, bringing together the retail activities in France. And a new one, named Teract Ferme France, which would be in charge of supplying local agricultural products through a short food supply chain.
Casino is troubled by high debts, around 3 billion euros of which will be maturing in 2024 and 2025. Czech billionaire Daniel Kretinsky has already made known that he wants to sign up for a capital increase.
7-Eleven to expand to Western Europe
Iconic convenience store chain 7-Eleven is preparing to expand into new parts of Europe and seeking franchisees in up to 10 countries. The chain, which operates over 83,000 stores in 19 countries worldwide, is known for its round-the-clock opening hours. It is considered the inventor of the convenience retail sector 96 years ago. The company was founded in Dallas, US, and is now owned by Japanese firm Seven & I Holdings.
The retailer is initially targeting Germany, France, Ireland, Italy, Poland, Spain, Turkey, and the UK. Austria and Switzerland could also be considered, according to reports. The Benelux countries are not included in the plans. In Europe, 7-Eleven already has stores in Denmark, Norway and Sweden. The CEO of 7-Eleven international said the company wants to become the one-stop-shop where people can quickly and conveniently get quality food and beverages despite their busy lives. The need for high-quality convenience food is also great in Europe. That’s why the European market is now a leading expansion area for the 7-Eleven brand.
7-Eleven isn’t the only convenience chain with its sights set on European expansion. Circle K’s parent company Alimentation Couche-Tard recently announced the acquisition of over 2,000 sites in Germany, Belgium, the Netherlands and Luxembourg.
Albert Heijn testing higher 'true price'
Dutch retail leader Albert Heijn is conducting a test with the true price on coffee in three of its To Go stores. Customers can choose whether they pay the regular price or the ‘fair’ price. The surcharge of the ‘fair’ price goes to the Rainforest Alliance.
With the true price, the retailer wants to provide insight into the real social and environmental costs of the product range. The company True Price calculated the amount of the surcharge for Albert Heijn, based on a method developed by Wageningen University. The surcharge, among other things, compensates for environmental damage caused by the production of coffee and dairy products, such as CO2 emissions, the use of water and raw materials. It also guarantees farmers and their employees a living income.
Coffee at true price at Albert Heijn can be up to 36 cents more expensive, this is the case for Latte. The surcharge is lowest for (black coffee) espresso, at 8 cents. After two test months, the company will evaluate and decide whether the project will be continued and rolled out across more stores.
The retailer is also targeting the highly regarded B Corp certification, which it wants to achieve this year. It would be a first for a Dutch grocery retailer.
Food retailers experience big decrease in margins
A new report by McKinsey and Eurocommerce shows that because of cost inflation, lower volumes, and more price–sensitive customers, Europe’s food retailers saw the biggest drop in margins in five years.
Between 2019 and 2022, the average margin of European grocers decreased by three percentage points. The EBITDA margin decreased by one percentage point, while the EBIT margin stagnated. Adjusted for inflation, turnover dropped 7.1%, driven by intensified downtrading, consumers opted for cheaper products.
The analysts expect that consumer behaviour in 2023 will continue reflecting a cautious approach due to the knock-on effects of recent economic uncertainty. Retail volumes are likely to stay flat for the rest of 2023 due to the difficult economic climate. More than 53% of consumers plan to save more money on food.
Across Europe, consumer downtrading has led to substantial growth for private label. Compared with 2021, the value share of private label increased by 1.9 percentage points. However, only 0.8 percentage points of this increase can be explained by same store downtrading. The remaining part is caused by faster–than–average price increases for private label goods (0.8 percentage points) and above average growth of the discount channel, which has a higher private label share (0.3 percentage points). Pure online players grew faster than inflation in 2022 and some reached profitability.
Regarding channels, discounters gained 1.4 percent in market share in Europe relative to 2021. This was largely driven by a combination of aggressive footprint growth in recent years, recovery from the pandemic–related sales dip, price inflation faster than market average and an increase in price sensitivity in the market. Discounters grew at the expense of all other channels: traditional trade declined by 0.8 percentage points, hypermarkets by 0.2, online by 0.3, and supermarkets by 0.1.
This is the third time McKinsey and EuroCommerce have launched a joint State of Grocery Retail report, which includes a survey of more than 12,000 consumers and almost 50 grocery executives and thought leaders.
Online supermarket Picnic launches 2000-SKU private label range
Pure online grocer Picnic has officially launched its private label range, now comprising about 2000 SKUs. The first products entered the app-only supermarket three years ago and the range has steadily expanded and will continue to do so.
The design was to be bold, fun, not cheap looking, radiate quality, and be “instagrammable”. Since the products do not appear on the shelves, they were ‘designed for the home’. Picnic uses constant customer feedback to tweak products, recipes and packaging.
The retailer aims to double the number of private label products in the future. Drugstore, frozen, fresh and vegan products will be among the next categories. Picnic operates in the Netherlands, Germany and France and uses electric delivery vans, adapted to the requirements of inner-city traffic.
In the Stores
Lithuanian supermarket chain IKI has opened its second contactless convenience store in the capital Vilnius and plans to open a total of four contactless outlets by the end of the year.
Aldi is changing its strategy in the cosmetic products range. The discounter no longer relies on A brands but is strengthening its own brand Lacura and wants to align it globally.
Tesco has begun recycling used plastic food trays back into packaging in what it calls an “industry first”. The process creates a fully circular packaging solution for its range of core chilled ready meals. The change will see customer-recovered PET trays – collected via European kerbside waste – recycled and converted back into food-grade plastic trays.
Monoprix is launching eight fruit juice items in biosourced, aluminum-free packaging made of 90% plant-based materials. The cardboard from wood and plastic of plant origin from sugar cane are combined. This approach is quite new, especially for a private label.
Iceland has introduced a Local convenience format in the UK. It will stock goods from Iceland’s own label range, as well as its exclusive own-brand partnerships. The store is owned and managed by forecourt operator SGN Retail.
Portuguese retailer Continente has reformulated more than 538 private label products in the past three years, removing approximately 860 tons of sugar and 120 tons of salt. It has also removed palm oil from around 92 SKUs.
Spar in the Netherlands debuted new clothing for its supermarket employees. The aprons, shirts, blouses and jackets are made from organic cotton and recycled PET bottles.
Boots has launched what it describes as its No7 beauty own brand’s biggest ever cosmetic science innovation. The products contain a “world-first super-peptide blend” that Boots said is proven to harness the skin’s natural repair process and the renewal of over 50 key proteins in skin cells.
H&M Beauty launches OHH! (Oh Hey Hero), a collection of 10 everyday vegan essentials from a frictionless razor through to a body moisturizer for just about every body.
Sainsbury’s removed single-use plastic trays from its own-label By Sainsbury’s whole chicken range. The retailer said the new trayless packaging would use a minimum of 50% less plastic and will save 140 tons of plastic per year.
LIDL Portugal announced it is reinforcing its commitment to sustainability by digitizing its price labels. The switch will allow for significant paper savings and is to be completed in all stores by the end of 2024.
Holland & Barrett launched a range of at-home blood tests that promise customers results within 48 hours. The own label offer of 11 SKUs, marketed as Ivie, includes a General Health Blood Test, as well as a vitamin, iron, cholesterol, testosterone and diabetes blood test.
Market Research
The NielsenIQ-GfK merger is postponed
NielsenIQ has notified the European Commission it would withdraw the current acquisition filing for German market research firm GfK, adding a new tie-up plan would be submitted "as soon as possible".
Supposedly, the tie-up was likely to face a full-scale EU antitrust investigation, with regulators demanding asset sales in return for clearing the deal. Because of the compressed time period to test any proposed remedies, the parties, in consultation with the Commission, determined that the best course of action is to refile for approval in the coming weeks.
NielsenIQ has operations in more than 90 markets, covering more than 90% of the world's population while GfK leads in market research on technology and durables in 67 countries.
Quick deliverer Getir publishes national trends
Getir in Italy has taken stock of its 18 months presence in Italy. The best-selling categories are soft drinks and the fruit & veg segment, the top ten include bananas, courgettes, water, cherry tomatoes, kiwis, avocados and milk.
Getir's analyses shows that the evenings and weekends are the favorite times for consumers to place online orders. 46.5% of customers of the quick commerce app order groceries from Friday to Sunday. Timewise, there is a boom in deliveries scheduled between 5 and 9 pm, the slot chosen by half of consumers.
One-fifth growth in plant-based food recorded in Europe
Sales of plant-based foods in 13 European countries hit a record high of €5.7 billion last year, with a growth rate of 22 percent since 2020, according to a report by the Good Food Institute Europe (GFI Europe).
The GFI Europe report analyzed NielsenIQ data and found that plant-based meat sales grew to €2 billion in 2022, accounting for six percent of the pre-packaged meat market, while plant-based seafood and cheese categories saw double-digit growth.
The most developed category of plant-based foods was plant-based milk, which now accounts for 11 percent of the overall milk market. Although plant-based seafood was the fastest-growing category with unit sales expanding by over 300 percent between 2020 and 2022, it remains the least developed, with sales of just €43 million in 2022. The report also found that sales of plant-based yogurt grew by 16 percent between 2020 and 2022, while conventional yogurt sales decreased by four percent.
The analysis looked at sales data across Austria, Belgium, Denmark, France, Germany, Italy, Netherlands, Poland, Portugal, Romania, Spain, Sweden, and the U.K.
PLMA News
How many products are there?
At every PLMA show we're asked, how many products are there on the show floor? To be honest, we really aren't sure, so we usually answer, "thousands," or "tens of thousands" or even better, we simply say, "a lot." It'd actually be easier to guess the jellybeans in one of those huge plastic jars.
One thing we do know, there'll be enough products in Amsterdam to satisfy every visitor. Our 2,600+ exhibitors are justifiably proud of what they offer and more than happy to show them off. They'll invite you to touch, examine, even eat some of them; Pasta, coffee and hand soap are always popular.
Most products are displayed live, but others will be depicted in posters, videos and photographs; more can be seen in printed materials of all kinds. If you’re looking for specific products, the best place to start is PLMA’s online Show Navigator to narrow the search considerably.
40,000 net m2 of exhibit space divided over 8 Food halls and 5 Non-Food halls is a lot of ground to cover. But if there's time after you've found your desired products and visited all stands you had planned, try stopping by PLMA’s Idea Supermarket. We feel certain you'll discover some pleasant surprises there as well. Maybe even jellybeans.
To request a visitor registration link, please click here.
Pre-Show Seminars at "World of Private Label" on 22 May
PLMA offers a special seminar programme on 22 May from 14:00 to 16:00, prior to the "World of Private Label" trade show. This year, Arjan Both, Walmart’s Senior Vice President of Food Sourcing, will speak about opportunities in global sourcing and international negotiations.
Other presenters at the pre-show seminars are:
- Servé Muijres, Retail Consultant Shopper, GfK Netherlands. Muijres will speak about “Behavior Changes of FMCG Shoppers in Challenging Times: Insight in Consumer Attitudes and the Implications for Private Label Retailers and Manufacturers.”
- Kayleigh Meister, Analytical Team Lead, NielsenIQ. Meister will discuss the “Current Outlook of European Private Label Trends: The Latest Update of the Country-by-Country Market Share Data and Trends.”
Admission to the seminars is complimentary to all registered visitors and exhibitors in possession of a valid "World of Private Label" entrance badge.
Also on 22 May, the winners of PLMA’s 2023 International Salute to Excellence Awards will be announced. The awards honour retailers for innovation and quality in private label products and packaging. More than 100 winners representing 56 food categories and 34 non-food categories will be recognized.
“PLMA is proud to offer a comprehensive pre-show programme to give attendees a clear understanding of product and consumer trends that will drive the private label business forward,” said PLMA President Peggy Davies.
Events
23-24 May
PLMA’s “World of Private Label” International Trade Show
Amsterdam, The Netherlands
28 June
Lunch & Learn Speaker Series Webinar
E-Scanner is a monthly publication of the Private Label Manufacturers Association, Strawinskylaan 1873, 1077 XX Amsterdam, The Netherlands.
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