	January 2012

	IN THE STORES Colruyt reports that Belgian shoppers are increasing their purchases of private label products
	MARKET RESEARCH Discounters will lead UK growth
	PLMA NEWS PLMA’s Barcelona Roundtable Conference, 22-23 February 2012, focuses on new products
	EVENTS

Private equity firms investing in private label

   Private equity companies are making big news in private label. Oaktree Capital Management made a deal that bolstered its position as Europe’s largest private label ice cream manufacturer, while industry speculation mounted that private equity firms are interested in acquiring a stake in Greencore, a big chilled foods supplier in the UK.
   The Oaktree deal involves R&R Ice Cream, which it created in 2006 by bringing together Richmond Ice Cream in the UK and Roncadin in Germany. R&R has agreed to purchase Durigon Gelato, based at Schwanewede-Brundorf near Bremen. The purchase is subject to clearance from German competition authorities. R&R has three factories in the UK, and plants in Germany, France and Poland.
   Some sources speculate that the Durigon purchase is linked to R&R’s deal with Kraft Foods to develop, manufacture and distribute five brands (Milka, Toblerone, Daim, Oreo and Philadelphia) in 10 countries.
   At Greencore, management says that talks with private equity companies have ended, but some industry analysts believe dropping share prices are likely to revive negotiations. A U.S. private equity company, Clayton, Dubilier and Rice, is thought to be a potential buyer.

EFSA approves 200 health claims

   The European Food Safety Authority has approved more than 200 health claims for use on food products. The final list of health claims must now be approved by EU governments and lawmakers before being formally adopted early next year. Companies will then have six months to remove any rejected claims from their products.
   Some 2,000 further health claims are still awaiting assessment by the EFSA, while all health claims for plant and herbal substances are currently on hold. The claim approvals come after EFSA completed an assessment of thousands of general function health claims.
   Separately, EFSA sources report that a new proposal for novel foods regulation is expected this year. The proposals may include separate legislation to deal with the controversial issue of animal cloning. The previous novel foods proposal failed last year due to disagreements on the regulation of animal cloning.
   The new regulations probably will feature more centralised authorisation procedure, carried out by the EFSA. The current approval procedure requires evaluation by individual member states.

Tesco launches more “venture” brands

Tesco is launching two additional “venture” brands, which don’t carry the retailer’s name. It is introducing a feminine hygiene range, expected to include sanitary towels and tampons, under the brand name Halo. It has also launched an eco-washing and laundry brand called Naturally Powdered, which includes a range of fabric conditioners, laundry powder, washing up liquid and household cleaning products.
Tesco first announced plans to launch venture brands in last year and currently has four ranges: Chokablok ice cream, Parioli Italian foods and Lathams and Nutricat pet foods. The retailer has also introduced its first non-food brand in the portoflio, Carousel toys aimed at pre-school children.

Aldi names suppliers in Austria

Aldi Süd’s Austrian division Hofer has asked all its private label suppliers to display the manufacturer’s name on product packaging, according to published reports. Starting with the fresh food department, the programme is now extended to include all other product ranges to replace the common ‘produced for Hofer’ labelling. Sources say Hofer wants to emphasise its commitment to Austrian suppliers. Aldi’s policy regarding the revelation of its suppliers differs from country to country.
Separately, Aldi has introduced a marketing campaign in Switzerland similar to the one it uses in the UK. The TV advertisements show “real” consumers talking about an Aldi Suisse product and the comparable item from leading brand manufacturers or competitors’ private labels, including Migros and Coop. Prices for both products are shown to highlight Aldi Suisse’s price advantage.

Ahold plans expansion in Germany and Belgium

Ahold aims for significant expansion in Belgium and Germany as part of its plan to grow during the next five years. The Dutch-based retailer plans to open 10 stores in Germany next year, according to CEO Dick Boer. The outlets will be located close to the Dutch border in the federal state of North Rhine-Westphalia. He added that the retailer intends to open at least 50 Albert Heijn supermarkets in Belgium as well as 150 AH to go stores.
Ahold also wants to significantly increase online sales and save money by having online customers in the Netherlands pick up their grocery orders from designated locations instead of delivering them to homes.

Australian supermarkets add private label

   Faced with the successful expansion of Aldi in their country, supermarkets in Australia are building up their own private label programmes. Woolworths Supermarkets, the country’s largest supermarket retailer, has outlined a five-year plan to double its sales of private label products, bringing their market share up to 35%.
   Woolworths has hired an executive with extensive private label experience to accomplish the goal. He’s former Tesco executive, Tjeerd Jege, who has been appointed director of supermarkets.
   One analyst, IBISWorld, estimates that private label products such as Woolworths “'Select”' and “'Macro”' ranges make up 23% of sales. This is up from 12% five years ago and more than double the category’s market share in the 1990s.
   The big brands are not happy about the shift to more private label. Earlier this year, Heinz criticised the market power of Woolworths and Coles, the second largest retailer, for creating an “'inhospitable environment”' for manufacturer brands by adding private label products.

French retailers opening organic foods stores

Two of France’s largest retailers, Auchan and Leclerc, are looking at new retail formats to increase sales of organic foods. Socobio, the Auchan subsidiary in charge of organics, plans to open the first store this spring in Brétigny-sur-Orge, Essonne. Beyond organic and diet products, the format will feature fresh counters for meat and charcuterie, fish and cheese and also alternative medicine products.
Leclerc plans to open a new format that will feature organic items in Houilles, France. The store will have a selling area of 2000 sqm which will include a special Espace Bio department.

Boots adds premium ranges

Boots plans to introduce premium health and beauty and food ranges in the UK, according to trade reports. The retailer reportedly will offer private label hair care products that compete with those offered by designer salon ranges. It also plans to launch of a range of anti-ageing products.
Boots also wants to expand its health food offering beyond the existing low-calorie or fat-free options. UK stores are also set for a new product emphasis shifting towards food, supplements, baby care and personal care electricals, while the number of in-store photo laboratories will be scaled back.

Edeka restructures non-foods

Edeka is restructuring its non-food business, Lebensmittel Zeitung reports. The retailer’s regional offices and the central headquarters will work together on operational management, marketing and advertising. There will be no change in the centralised sourcing of Edeka’s hardware and textiles. Edeka also announced that its joint programme for buying manufacturer brands with regional drugstore and perfumery retailer Budnikowsky is ending.

IN THE STORES

Colruyt reports that Belgian shoppers are increasing their purchases of private label products.

Aldi Nord is planning to make big investments to modernise all its stores in Europe. The stores designs reportedly will be similar to a new store in Gent, Belgium. Aldi also announced it will roll out in-store bakery ovens across its German network.

Leclerc expects its overall sales in France to grow by 4-5% in 2012, while limiting promotions to about 13% of total sales.

Mercadona in Spain has posted the origin of all its private label products on the National Food and Health Web site.

Casino is adding pork to its Terre et Saveur range. The pork is sourced from farms in Auvergne, Limousin, Loire and Lot.

Asda is working with Leiths School of Food and Wine to support its Extra Special private label range.

Dohle in Germany is offering standard private label products from sourcing partner Rewe.

Spar in the UK reports that its S Budget range has seen a success, generating £2m in sales for the five Spar wholesalers since its launch in September.

Rewe has launched an 80 sqm format under the Merkur banner in Austria. The store, which carries 1,400 products, is in Vienna.

Co-op in the UK is updating and expanding its private label pet food range, adding 11 lines.

Aldi in Australia has launched the ‘Expressi’ single-serve coffee machine and nine coffee flavours. The machine retails at A$79, while the capsules will retail at A$5.99 for a 16-pack.

Morrisons in the UK has relaunched the ‘Baked by Us’ bread range, including 20 artisan lines. The range is produced at the retailer’s central bakeries and uses 100% British wheat.

Douglas, the health and beauty retailer in Germany, is trialling a new store concept called Trend, designed for younger customers.

Lidl is preparing to open its first store in the Baltic countries, according to published reports. The store will be in the Lithuanian town of Alytus.

Eroski has opened a new hypermarket format offered a wide assortment of fresh foods in Zarautz, Spain.

Casino is expanding food and cutting back on non-food sales area of its largest Géant hypermarkets in France.

Tesco is piloting a portal called Tesco Connect for its UK suppliers. It aims to provide accurate sales predictions before promotions, clearer information about likely orders and insights into customer behavior.

Jeronimo Martins plans to have 3,000 Biedronka stores in Poland by 2015.

MARKET RESEARCH

Discounters will lead UK growth

   Discounters, convenience stores and online shopping will be the winners in the UK food and grocery market, according to a new IGD research report. These retail channels will grow by nearly 20% over the next five years to £184bn.
   IGD forecasts that discounters will grow 10% a year and be worth £11.4bn by 2016, up from £7bn in 2011. The trend is evident in current shopping patterns. IGD’s ShopperTrack data shows a doubling in shoppers using food discounters for their main source of grocery shopping. Six percent of them say they now use these stores as their main grocery channel, compared to 3% last September.
   The convenience sector will grow by 4.7% and is set to be worth £42.2bn by 2016, up from the current level of £33.6bn. But the most rapid growth will come online, where the market will double over the next five years to £11.2bn, representing growth of almost 14% annually. Online sales for the current year are estimated to be £5.9bn.

Big gains for private label soft drinks

Volume of private label soft drinks will double in Western Europe over the next fifteen years, forecasts Rabobank in a new study, “Private Label Developments in the European Soft Drinks Industry.” The rising sales will be accompanied by a significant increase in product variety. This will happen as more and more manufacturers of B-brands switch to private label. The report also predicts that half of all soft drink manufacturers will produce for private label in 2025. Market share for private label increased in the last 10 years from 17 to 23%. Rabobank says this will grow to 35% in 2025.

PLMA NEWS

PLMA’s Barcelona Roundtable Conference, 22-23 February 2012, focuses on new products

   “The Art and Science of Creating New Products” is the theme for PLMA’s 2012 Annual Roundtable Conference, to be held 22-23 February in Barcelona. The Conference programme features a special hands-on workshop about product development as well as presentations by industry experts.
   Speakers include Kees Postma, a former Ahold and Bijeen executive, who will focus on the new product process from the retailer’s perspective. David Bird, a senior consumer analyst at Datamonitor, a leading research group, will discuss how shoppers view new products. Lynn Dornblaser, Director, CPG Insight of Mintel will examine the history of new product development and why so many new products fail.
   On Wednesday, 22 February, there will be store tour briefing and visits to leading supermarkets and hypermarkets in the area. The host hotel will be the Rey Juan Carlos I in Barcelona. Special hotel rates have been arranged for conference participants. For more information about the programme and attending the conference click here or contact PLMA at telephone (31) 20 5753032 or email conferences@plma.nl .

EVENTS

22-23 February 2012	Annual Roundtable Conference Barcelona, Spain

22-23 May 2012	“World of Private Label” Trade Show Amsterdam, The Netherlands

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