Trade agreement strengthens ties between EU & South America

The European Union (EU) has finalized a trade deal with Mercosur, a bloc consisting of Argentina, Brazil, Paraguay, and Uruguay. European Commission President Ursula von der Leyen hailed it as a "historic milestone" in today’s volatile global economy.

If ratified, the agreement will lower tariffs, streamline customs processes, and enhance EU access to raw materials. This could boost trade between the two regions, which currently accounts for nearly € 113 billion annually. EU exports, including cars, machinery, and pharmaceuticals, are expected to rise, while South American exports of minerals like lithium and nickel, as well as agricultural products, will gain smoother entry into European markets. The deal would reduce prices for consumers.

The Mercosur-EU trade bloc encompasses nearly 800 million consumers and 20% of global GDP. EU officials estimate that 60,000 European companies already export to Mercosur, half of which are small businesses. For Germany, facing economic headwinds, the agreement offers an opportunity to reinvigorate its export sector.

However, ratification faces hurdles. France, Italy, and Poland have expressed concerns about environmental protections and fair competition for European farmers. French trade minister Sophie Primas underscored her country’s resistance, emphasizing the need for stricter safeguards to protect local industries and uphold European standards.

After the agreement is translated into all EU member state languages, it will go to the European Council for ratification, where EU countries are represented by their trade ministers. If the agreement is not blocked, it then must be ratified by the European Parliament. 

To drive sales, Carrefour launches geolocated connected TV campaigns

Carrefour in France is pioneering geolocated TV advertising to promote non-food products while advancing its strategic goal to phase out paper leaflets. This innovative initiative targets viewers using internet-connected TVs—representing nearly 90% of French households—within Carrefour store catchment areas. Weekly campaigns highlight discounted products.

“We aim to maximize promotion visibility through digital channels while reducing reliance on print,” says Frédéric Preslot, Carrefour’s Operational Marketing Director for France. He adds that this complements the retailer’s existing investments in its mobile app and CRM systems.

To streamline campaign management, Carrefour collaborates with CoSpirit, which has supported its local marketing efforts since 2023. “Connected TV allows us to innovate and fine-tune advertising pressure for each campaign and store,” explains David Scalia, Sales Director at CoSpirit.

Carrefour also leverages Armis' platform to automate and industrialize ad distribution, creating highly targeted campaigns based on postal codes. “This is a first in retail for such detailed, industrialized campaigns,” notes David Baranes, co-founder and co-CEO of Armis.

To control production costs, Carrefour partners with Wonder to create 3D video ads for connected TV platforms. Starting this year, artificial intelligence will further streamline video production.

Carrefour’s campaigns air on leading connected TV platforms, including TF1+, M6+, FranceTV, MyCanal, RMC-BFM, and YouTube, avoiding live TV channels. According to the retailer, these ads achieve hundreds of thousands of views per operation, significantly boosting sales of promoted products.

As part of its sustainability strategy, Carrefour plans to eliminate paper catalogs by 2026. Over 300 stores have already stopped distributing leaflets, with remaining stores significantly reducing printed content. CEO Alexandre Bompard views this as a critical step in Carrefour’s strategic transformation.

Connected TV campaigns signify a bold move towards digital marketing leadership, enabling Carrefour to connect more effectively with consumers while reducing environmental impact.

As part of its sustainability strategy, Carrefour plans to eliminate paper catalogs by 2026. Over 300 stores have already stopped distributing leaflets, with remaining stores significantly reducing printed content. CEO Alexandre Bompard views this as a critical step in Carrefour’s strategic transformation.

Connected TV campaigns signify a bold move towards digital marketing leadership, enabling Carrefour to connect more effectively with consumers while reducing environmental impact.

Albert Heijn says it is first supermarket to receive B-Corp Certificate

Dutch retailer Albert Heijn receives the B-Corp certificate, an award for companies that pursue social and environmental impact in addition to profit. According to the company, it is the first supermarket in the world to obtain the certificate. It had been focusing on getting the award since April 2023.

To obtain B-Corp certification, companies undergo an extensive audit. The assessment covers the company's entire operation and measures the positive impact of the company in areas of governance, workers, community, the environment, as well as the product or service the company provides. Candidates must score at least 80 points on the audit, 200 points is the maximum. Albert Heijn scored 97.9 points, and the retailer is happy with the score. Companies must re-certify every three years to retain B Corporation status.

Weight loss meds alter food spend of drugs' users

Consumers who use GLP-1 medications for weight loss, like Ozempic, shift their purchasing habits. Users make fewer food and beverage purchases during the first three months of use and return closer to benchmark levels by the end of year one. Spend on groceries can reduce by 6% overall, though purchases of produce, meat, snacks, protein bars and yogurts increase. This is one of the findings of a new report from market information company Circana.

GLP-1 weight-loss users shift their spending on food purchases both in and out of home. At grocery retail, they are spending more on foods that support GLP-1 balance, including vegetables, eggs and nuts. Conversely, they are making fewer purchases of products they’ve been recommended to avoid, including spicy foods, fatty proteins, and beverages with added sugar. 

The evolving behaviours reveal a clear connection between category growth and the health-driven preferences of these consumers, offering brands fresh opportunities to align with their goals. “A deeper understanding of GLP-1 medications and their roles in weight loss has unlocked new opportunities to enhance the food, beverage, and non-food products that support consumers’ overall well-being,” said Sally Lyons Wyatt, global executive vice president and chief advisor, Circana. “As accessibility, availability, and affordability of these medications improve, it will become critical for companies to develop strategies that support consumers on their health journeys.

By addressing the preferences of these consumers—such as an increased focus on protein, vegetables, and fruits, along with reduced consumption of sugar, carbs, and sodium—brands can align product innovation and marketing strategies with these consumers’ health goals. Additionally, categories such as high-protein, ready-to-eat meals, and portion-controlled snacks are well-positioned to meet the specific needs of weight loss medicine users, demonstrating the potential for growth in both traditional and emerging product segments.

Danish non-food chain accelerates expansion

Søstrene Grene had its strongest financial result in the company’s history in the latest financial year, according to its CEO, Mikkel Grene. The Danish company increased sales by 22% and profit went up 15%.

Its stores offer a wide assortment of home interiors, kitchen items, hobby articles, beauty, travel items, party supplies, gift wrapping, stationery, toys as well as seasonal items. Every week, new products land in stores. Prices are low, most products are sold under 10 euros.

The concept is different from other non-food discounters in that the atmosphere in the stores is special, focused on aesthetics and ambience, appealing to the customers’ senses. Goods are on wooden shelves and wicker baskets, with warm light and delicate colours. The layout draws the consumer into the depths of the store, while the sense of time is quickly lost. Almost all the items in the store are own brands.

After the strong results of the past 52 weeks, the company now wants to take the opportunity of the momentum and expand its network of over 300 stores to a targeted 500 stores within the next three years. The company operates stores and web shops in 16 European countries.

Countries, big brands strike out at popular Nutri-Score

Despite its widespread appeal, Nutri-Score has faced pushback in several countries, including Italy, Romania, Greece, Cyprus, the Czech Republic, and Hungary. Authorities in these nations argue that the system unfairly penalizes traditional products, such as those commonly found in the Mediterranean diet. Critics contend that Nutri-Score oversimplifies food evaluations by focusing on select nutritional factors, which can distort consumer understanding of a product’s overall health value.

In addition to governmental objections, major brands like Danone, Heineken, Unilever, and Arla Foods have expressed reluctance to adopt Nutri-Score on their product packaging. These companies argue that the algorithm used to calculate the scores doesn’t align with their national dietary guidelines, or that recent changes to the system have downgraded their products to lower categories, resulting in what they believe to be unfairly low scores.

Nutri-Score, a front-of-pack label (FOPL) system, uses a color-coded, traffic-light-like design to rate the nutritional quality of packaged foods based on their fat, sugar, salt, and calorie content per 100 grams or millilitres. A “Green A” signals the healthiest option, while a “Red E” represents the least nutritious.

Recent revisions to the Nutri-Score system have reclassified dairy and plant-based beverages. For example, solid yogurt, considered a meal food, is classified differently from drinkable yogurt, which is viewed as a beverage often consumed between meals, moving it from the general food category to the beverage category. This shift had a significant impact on product ratings, as the algorithm applies different nutritional criteria depending on the product category. As a result, certain dairy products that previously held high ratings of “A” or “B” dropped to lower ratings of “D” or “E,” largely due to their sugar content or the use of alternative sweeteners.

In the beverage category, only water maintains the top rating of a “Green A.”

Packaging at crossroads

The forthcoming EU Packaging and Packaging Waste Regulation (PPWR) is set to reshape the packaging landscape across Europe. The new legislation aims to drastically reduce packaging and packaging waste and will be implemented gradually starting mid-2026. It establishes ambitious goals for manufacturers and retailers, impacting both branded products and private label.

A turning point for packaging! A new era for packaging! Revolutionary! Game-Changing! Experts keep on finding new words to express what an immense change this law will bring. The final version of the law is expected to be published before the end of this year, officially setting the timeline for implementation. So, how will the PPWR impact the private label sector? The answer is clear: it will significantly alter how packaging is designed, consumed, and disposed of throughout the entire EU value chain. Businesses need to be ready.

As part of the EU Green Deal, the regulation has three core objectives: to reduce packaging waste, promote high-quality recycling, and establish uniform rules across all member states. While there was previously an EU directive on packaging waste, it allowed individual countries considerable flexibility. Now, with this regulation, standardized guidelines will apply across the board, with stricter enforcement.

To address these changes, PLMA will hold an in-depth conference on all aspects of packaging on 30 January 2025. The event will not only focus on the new PPWR legislation, but will feature a diverse range of packaging related presentations, covering topics such as private label packaging trends, innovation, creative design, sustainability, a look into the future, and consumer perception. It is a must-attend for anyone in the private label industry. For more information, click here.

Come and go in Everest Alliance: Aura Retail in, Super U out

In a surprising turn of events, Cooperative U, operator of the Super U supermarket chain, is set to part ways with the international purchasing alliance Everest, as well as the Epic alliance. The retailer joined the alliance only two years ago, partnering with the other members Edeka, Picnic and Jumbo. The split is reportedly due to internal disagreements among the partners, potentially around strategic approaches or negotiations. Everest negotiates purchasing prices for its partners with more than 50 multinationals. Epic Partners includes Edeka, Jumbo and Picnic, as well as Migros Group, Jerónimo Martins and Esselunga. Epic negotiates with major suppliers for top-quality conditions for international marketing campaigns.

Just days after Cooperative U’s departure was announced, Everest and Epic welcomed a significant new member: Aura Retail, a French food purchasing powerhouse. Aura Retail stated that it wants to negotiate the best pricing conditions with the biggest multinational manufacturers, thus allowing more advantageous prices for its customers. With Aura Retail now onboard, Everest is expected to rival the size and influence of Eurelec, a key alliance between E. Leclerc, Rewe, and Ahold Delhaize.

Meanwhile, Aura Retail, Everest’s new partner, recently published details of this new partnership forged between Intermarché, Auchan and Casino. The French alliance comprises five operational structures offering purchasing partnerships between the three groups for an initial period of 10 years. For food purchases, Aura Retail will be made up of three central purchasing units managed by Intermarché. For non-food purchases of national brands, two structures have been set up by Aura Retail and managed by Auchan. Private label is part of the portfolio of the alliance.

With the departure of Cooperative U and the entry of Aura Retail, Everest is undergoing a significant transformation. The evolving makeup of these international purchasing alliances reflects the increasingly complex and competitive nature of global retail. As large retailers seek to enhance their negotiating power with multinational suppliers, these alliances will continue to shift in response to both internal dynamics and external market pressures.

The inevitability of AI in retailing never more apparent

Artificial intelligence is increasingly being integrated across various functions within retail businesses. Carrefour recently demonstrated how it leverages AI to enhance its commercial offerings and optimize stock management, both in stores and warehouses. AI tools assist store managers in making data-driven decisions about product placement, quantities, and shelf arrangement. These algorithms consider factors such as location, weather, and population demographics, providing precise insights for decision-makers. Additionally, AI is now being used for pricing and promotions, tailored down to the store and product level. Data from loyalty cards or apps plays a crucial role, offering models real-time, customer-specific purchasing behaviour.

Tesco is another retailer harnessing the power of AI. It has announced plans to utilize AI to introduce a new initiative: using loyalty card data to encourage customers to choose healthier and more affordable alternatives. By analysing customer shopping habits, the AI will provide personalized product suggestions aimed at delivering greater value to shoppers.

Albert Heijn has introduced a new feature in its app, called "Scan & Cook," aimed at helping customers reduce food waste. The feature allows users to snap a photo of items in their fridge or pantry and upload it to the app. Using this technology, which will be further enhanced throughout the year, the app then transforms the ingredients into personalized, delicious recipes with just one click. This is one of the Generative AI applications that Albert Heijn has developed, implemented, and is now rolling out.

Here come the robots...maybe

A report by Rabobank about the food industry shows that robotization will be the focus of food manufacturers in the coming years. Almost all food manufacturers the bank spoke to indicate that the lack of qualified personnel is one of the main reasons for robotization. In addition, working conditions, production costs, sustainability and flexibility are considerations to look into robotization.

Now that the tight labour market will remain a problem in the years to come, robotization offers the opportunity to achieve turnover growth without having to expand the workforce accordingly, do more with the same amount of people. In addition, robots can be deployed for specialist functions where there is a lack of skilled staff. Using robots for, for example, quality control, product placement or recipe dosing can lead to a smaller margin of error and hence, more consistent quality.

Besides the above-mentioned advantages, there are reasons not to invest in robots. The biggest barrier seems to be the current production process. The human production factor brings a lot of flexibility to the work floor. In order to earn back the investment in robots on a specific production line, certain minimum production volumes are often required. Private label producers in particular will have to examine the long tail in their range (recipes, packaging, etc.). Some manufacturers are reluctant to commit to certain product ranges or production volumes by investing in specific robots because contracts with buyers are often no long-term agreements.