The COVID-19 crisis has boosted shopper interest in locally produced products. News anchor Judith Kolenburg reports on how retailers are responding with their private label strategies.
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Sebastiaan Schreijen, senior analyst and Cyrille Filott, global strategist for consumer foods tell us  how private label suppliers can best prepare for Nutri-Score and Eco-Score requirements.
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PLMA E-Scanner – December 2021

December, 2021
Traditional retailers teaming with flash deliverers

The rise of fast delivery companies, which promise to bring home groceries in ten or twenty minutes, has caught the attention of traditional grocers. Since there obviously is a market for such speedy service, some chains are taking advantage of the popularity, performance, and availability of delivery teams of the fast deliverers and partnering with them.

Tesco has teamed with delivery group Gorillas and is testing ten-minute deliveries from its supermarkets and offering a range of 2,000 items. In spare space within the supermarkets involved in the test, small warehouses were set up from which the Gorillas teams operate. In France, Casino Group took a stake in Gorillas. Casino was already supplying the dark stores of Gorillas, and this cooperation will now see several hundred Monoprix’ private label items added to the Gorillas range.

Rewe took a share in express delivery service Flink. The latter now sells numerous private label products from Rewe, especially organic items and convenience products from the "Beste Wahl" line. Carrefour signed a partnership with start-up Cajoo in France, which will take care of the order picking of 2,000 national and Carrefour own brand food and non-food products via the interface of the Uber Eats app.

As for the costly last mile, a loss-making issue for retailers, partnering with a quick commerce provider may be one way for chains to at least break even.

EU seeks to stop deforestation

Europe is the second largest buyer of soy, beef, palm oil, cocoa and coffee. These are often manufactured on an industrial scale, which involves cutting down forests. The European Union has now introduced measures to limit EU-driven deforestation.

The Regulation sets mandatory due diligence rules for companies that want to place the commodities on the EU market with the aim to ensure that only deforestation-free and legal products enter the EU market. Importers of food and some derived products will have to prove that their items are grown only on existing agricultural land. In the first instance this means that these products entering the market have to be traceable so their origin is clear.

The Commission will use a benchmarking system to assess countries and their level of risk of deforestation and forest degradation. European member states are responsible for the checks.

Keeping score, from Nutri- to Eco- to Planet-

Front-of-pack health label Nutri-Score is already being used in major supermarkets across Europe for a few years. It classifies the nutritional value of products on a scale from A (very healthy) to E (unhealthy). The label, which enticed manufacturers and retailers to reformulate products in order to get a better score, has been accepted by consumers and helped them make healthier choices.

This year, Eco-Score was launched, this label rates the environmental footprint of products from farm to fork. The system measures the CO2 impact of products, but also their impact on water, biodiversity and particulates. Like the Nutri-Score, the Eco-Score is a front-of-pack label with an A for the product with the lowest ecological footprint to E, the highest. Colruyt has adopted the new score for its own brand products and will include national brand products in the coming months. Lidl Europe and Carrefour have also started using the label.

Finally, an additional labelling system was launched: “Planet-Score”. Some 27 manufacturers and eight retailers in France, including Auchan, Lidl, Franprix and Monoprix, have signed up to test the label for 1,000 food products. The label resembles the Eco-Score, but in case a Life Cycle Assessment cannot be established for a product, the system will look at other factors such as pesticide use, climate impact, biodiversity, and animal welfare.

All these front-of-pack labels attempt to make it easy for consumers to make healthier or more sustainable choices. Instead of having to scan a barcode, the letter A to E directly provides the necessary information.

Ocado advances in warehouse automation

UK online supermarket Ocado wants to automate the entire process from farm and factory to consumers’ fridge. Already using thousands of robots, it wants to eventually replace most manual warehouse jobs with machines.

So far, the company provides its e-commerce technology solutions to brick-and-mortar supermarket retailers, such as Monoprix, Alcampo, Coles, Sobeys, Kroger and Marks & Spencer. Now that food e-commerce is growing and there is labour shortage and rising wage demands, its automated Customer Fulfillment Centres are attracting attention from even more international retailers.

While using robots to handle non-food items is already pretty standard, food has always been a challenge; it can be fragile and can require chilled or frozen temperatures. The success of a robotized solution for grocery could have big implications for labour in the retail industry.

Mere’s expansion is slowed

Russian hard discounter Mere is slowing down its ambitious expansion plans in Western Europe. A few months ago, it had announced that by the end of this year, it would open ten stores in Belgium, and at least three in France and the UK. So far, only one store in the UK opened, with a delay because there weren’t enough products for the store.

Mere operates without warehouses; each store is a self-service warehouse without shelves. Products are stacked on pallets directly delivered by suppliers. The problem seems to be that the company has trouble finding suppliers in this region. It has very strict conditions for its suppliers: they have to offer their goods considerably cheaper than at the competition, they are responsible for the delivery of products to the stores and have to take back unsold goods. Once Mere succeeds in finding local suppliers that are willing to agree with its terms, it could fill the gap created by the upgrade of Aldi and Lidl in Western Europe.

Migros aims for 70% less CO2 in transport

Together with Empa, retailer Migros has in-house developed software, which displays its entire flow of goods in real time. The solution is called “M Opex Tower” and it enables the retailer to make its logistics safer, more efficient, and more ecological.

The tool maps the flow of goods in real time on the road, rail and water based on a digital copy of its entire supply chain worldwide. An algorithm then calculates the optimal means of transport in terms of emissions. Thanks to the software, Migros expects to be able to reduce its CO2 emissions in road traffic 70% by 2030.

In addition to decarbonising store deliveries, the tool makes it possible for the retailer to react quickly to supply chain disruptions, thus increasing its resilience.

In the Stores 

Tesco discontinues the Jack’s store format. Tesco’s subsidiary Booker Wholesale will continue and expand the Jack’s own label in its stores.

Monoprix has launched a new loyalty programme called ‘Compte M’. The new programme is more service-oriented and personalized, with offers adapted to customers’ purchasing habits.

Okay, Colruyt’s inner-city and neighbourhood format has opened an autonomous 24/7 self-service supermarket. Customers can enter the store by scanning their loyalty card or app. The range includes about 650 items, both A-brands and own brands.

Pingo Doce is including the Nutri-Score nutritional label on all of its private label products as one of the company’s measures to promote health through food.

Kaufland has introduced a new range of natural cosmetics under its own brand "Bevola Naturals". The new line is climate-neutral through compensation via climate protection projects, vegan and Natrue certified.

Carrefour Spain has added milk with the Circle of Quality seal to its own brand range. The product also has a more sustainable packaging since 86% of its material is renewable.

Tesco has revealed a new own brand range of refillable cleaning sprays. The bottles can be reused by mixing Tesco dissolvable capsules with water to make a new cleaning solution.

Albert Heijn wants to offer only 100 percent recyclable packaging for its own brand products by 2025. The retailer has also expanded the delivery area of its “AH Compact” service to over one million households in The Netherlands.

Kaufland and Lidl have started to pack organic products with paper packaging based on the Silphie plant. According to the retailers, the innovative plant-based paper is suitable for numerous food and non-food products.

Migros has presented the world’s first plant-based, hard-boiled egg under its own brand V-Love. The egg alternative is based on soy protein; it looks like an ordinary picnic egg and can be cut and prepared accordingly.

Food service retailer Transgourmet is expanding its portfolio with a new plant-based own brand called "Plant-based". The line will include vegetarian and vegan products as well as services such as training and advice on plant-based offers in the catering industry.

Carrefour is permanently lowering the price of 300 private label products in the most popular categories with the slogan: “When everything increases, Carrefour lowers the prices.”

Jumbo launched the “van Dichtbij” (From close by) label for own brand food products from The Netherlands. It will promote the new line in commercials, on its website and in-store with a dedicated “van Dichtbij” shelf.

SPAR International presents a new own brand range across European markets under the label SPAR N°1 Value. The range has been launched with 70 SKUs and is set to expand by the end of the year to over 100 items.

Lidl Switzerland is broadening its range of regional products with the “Typisch” (typical) concept. Regional products now get the chance to be sold in Lidl stores throughout the country under the “Typisch” umbrella brand.

Delhaize is starting a pilot project in Belgium where customers can buy hot and cold dishes in the supermarket chain's first hot kitchen, in collaboration with Tastyoo.

Asda offers refillable draught beer. In-store customers will be able to select from 12 freshly poured draught drinks that can be taken away in one or two-litre refillable glass containers or cans.

Market Research 
Nearly half of Europeans say they eat less meat

A European survey conducted by NGO ProVeg International in partnership with Innova Market Insights, the University of Copenhagen, and Ghent University, has shown a “significant shift towards plant-based eating” across the continent.

In the survey among 7,500 consumers in ten European countries, 46% of Europeans reported that they eat less meat today than they did a year ago. 39% intend reducing their meat consumption (e.g. beef, pork, chicken) in the next six months.

Some 28% of European consumers intend reducing their dairy product consumption (e.g. milk, yoghurt, cheese) and 26% of European consumers intend to increase their consumption of plant-based dairy products in the next six months.

Overall, 30% of participants identify as flexitarian. The Netherlands (42%) and Romania (40%) had the highest share of flexitarians. 7% of the total sample are plant-based eaters (vegan & vegetarians).

Survey: Many Europeans switching to own label

Research by Pricer earlier this year, among 18,000 consumers in ten European countries, reveals that between a third and a half of consumers have switched from branded goods to supermarket own label. On average, just over half (51%) of
consumers usually chose own labels as opposed to brands, where available.

Another finding is that across all markets, 64% of consumers say they want more access to product information, rather than just pricing, at the shelf edge, with the strongest demand being driven by Spanish and Italian shoppers. Moreover, they are more likely to buy a product when they could easily and clearly see information about that product displayed.

PLMA News 
On 23-24 February 2022, PLMA will hold its annual Roundtable Conference online

This year’s theme is “The power of sustainability”. Driving a sustainable private label business is a challenge for retailers and manufacturers. It touches every aspect of companies' operations. From sourcing, product composition and transport, to processing, packaging, waste management and store and warehouse design. What are the drivers and barriers of making sustainable choices? What is the role of the consumer? How can companies turn the cost of change into future success?

PLMA's Roundtable Conference gives insight and provokes discussion about these important issues, for registration and more information click here.

Events 
23 & 24 February 2022

PLMA's Online Roundtable Conference

31 May & 1 June 2022

PLMA's “World of Private Label” International Trade Show
Amsterdam