PLMA E-Scanner – September 2020

September, 2020
PLMA announces 2020 Online “World of Private Label”

As an alternative to the cancelled in-person trade show in Amsterdam, PLMA is launching the Online “World of Private Label” to allow for manufacturers and retailers to continue business growth. Held from 1-4 December, the 2020 Online “World of Private Label” will be divided into designated product category show days. To keep participation efficient for exhibitors and buyers, each category will be open for two full days. Products presented by PLMA’s online exhibitors will include fresh, frozen and refrigerated foods, dry grocery and beverages as well as non-food categories, including cosmetics, health and beauty, household and kitchen, auto aftercare, garden, and housewares & DIY. Based in the cloud, the show will be accessible from anywhere.

PLMA President Peggy Davies said, “Over the last 35 years the “World of Private Label” trade show has grown to become the industry’s leading event. We understand the disappointment that our members and others may have felt upon the cancellation of our Amsterdam show but we are convinced that our Online “World of Private Label” will provide the worldwide private label industry with valuable sales and marketing solutions when these are most needed.”

Carrefour launches a value brand

Carrefour is launching Simpl, a value-tier brand, across Europe and beyond. Simpl packaging does not bear the Carrefour logo or emblem. The retailer said “the entire product range is currently being reviewed and re-evaluated” and it hasn’t been determined how many Simpl products will eventually be included in the range.

“The new branding is more attractive and looks more modern. The products are gradually replacing the previous product range, so you will see them more and more in our stores. The rebranding is very recent and ongoing: the process will certainly take another few months”.

Retail analyst Olivier Dauvers pointed out that the launch of Simpl isn’t the first time that Carrefour has responded to looming economic hardship with a new private label launch. In 2009, it unveiled Carrefour Discount, partly in response to the global economic downturn. Carrefour also introduced “white label” products in the 1970s, during another economic crisis.

Germany aims to ban unfair trade practices

The German Federal Ministry of Agriculture wants to ban “unfair trade practices” to protect farmers and medium-sized food manufacturers. LZ reports the law would punish violations with high fines and public disclosure. According to the draft, the new “Food Supply Chain Act” should not only protect “primary producers against unfair trading practices, but all suppliers”. Specifically, for example, payment deadlines of more than 30 days for perishable goods and more than 60 days for other foods are to be prohibited. Short-term cancellations of deliveries, unilateral changes to contracts or "non-material payment claims" as well as the threat of retaliation are prohibited.

In total, the proposed law names ten unfair trading practices that are generally prohibited (so-called "blacklist"). Six other practices, such as listing fees or advertising subsidies, are classified as “unfair” unless they have been “clearly and unambiguously agreed between the buyer and the supplier”.

The German Retail Association (HDE) criticised the legislative proposal. “In principle, there is no need in Germany to regulate contractual relationships in the food supply chain, because the current civil and competition law framework offers sufficient protection against disadvantages. However, regulation is associated with the risk of restricting competition, the resulting losses in efficiency and, as a result, with rising consumer prices”, it said.

Ahold CEO warns against biased data

A leading supermarket executive warns that the growing use of artificial intelligence by retailers carries some dangers. Frans Muller, CEO of Ahold Delhaize, told an industry group that biased algorithms can cause big damage.

Algorithms may be biased by their design or data, Muller said. This can happen, for example, when the teams that develop the algorithms are not balanced. That is why Ahold Delhaize is more careful to ensure that these teams have the right staffing: in terms of diversity, gender, background and world orientation, they must form a representative image of the retailer's varied clientele.

Customer transactions are becoming more data-driven, so that artificial intelligence will play an increasingly important role for the supermarket, he said. “But the algorithms could not prevent certain shelves from becoming empty at the beginning of the corona crisis. The pandemic in the Netherlands led to an increase in online orders of no less than five hundred percent. One in three customers started using the app. The number of transactions increased both in the stores and online. Ahold Delhaize would never have been able to deal with this so well without ‘rich data’ and good algorithms.”

Price gap with A-brands gets bigger

The price difference between A-brands and private label is getting bigger in the Netherlands. Research by The Consumers Association reports that private label products are now on average 45% less expensive than A-brands, compared to 24% less expensive in a survey taken in 2014.

The price difference between A-brands and private label has grown by about 5 percentage points every year: in 2018 the price difference between them was 36%, last year 40% and now an average of 45%. The Consumer Association found that A-brands have become more expensive, while many retailers are place greater emphasis on their budget brands.

Mercadona expands ready-to-eat sections

Mercadona is investing 170m euros to upgrade and expand its ready to eat section of freshly made dishes, The retailer will be adding an assortment with healthy dishes, such as vegetable stew and different types of fish, such as sea bream, salmon and cod with garnish, and more sandwiches like vegetable brioche and Angus burger. There are also new hot deli counter items with an assortment of roasts, such as chicken, ribs and potatoes, and Frango, a typical Portuguese chicken. All these new products are served in sustainable containers made with sugar cane or cardboard.

Migros introduces plant-based range

Swiss retailer Migros has launched the V-Love brand, featuring a range of plant-based and vegetarian foods. The first V-Love products unveiled include a vegetable-based burger, a vegetable-based roast sausage and a vegetable-based grilled sausage. All products are 100% plant-based and certified with the internationally recognised and protected V-label, used to mark vegetarian and vegan products.

Poundland adds food range

Poundland has added a ‘free-from’ range to its food offering in 16 stores across the UK. It will include gluten-free savoury and sweet snacks, breakfast cereals, bakery products and pasta, as well as dairy-free milks. The move comes as the retailer accelerates the roll-out of its expanded chilled and frozen food offer to 60 stores, with more planned. The new range includes around 400 everyday items, from frozen fish to yoghurts.

In the Stores 

Carrefour is acquiring 172 stores under the Supersol banner in Spain, located mainly in Andalusia and the Madrid region. The stores will be converted to three formats, Carrefour Express, Carrefour Market and Supeco.

Walmart has resumed talks with potential buyers of a stake in its Asda stores.

The Federal Cabinet in Germany has approved the regulation for the introduction of the nutritional traffic light Nutri-Score. The introduction is planned before the end of the year.

Tesco is selling its Jack’s grocery products in around 900 One Stop convenience stores, offering a 50 SKU range of products under the discounter brand.

Co-op in the UK is planning a new range of grocery and nonfood items under the Honest Value brand.

Aldi Italia has opened its first two stores in Milan. The discounter expects to have 100 stores in the country by the end of this year.

The Polish government wants to unite more than 40 state-run food companies into one holding company.

Carrefour Poland has added grocery shopping to its Click & Collect service.

Globus has joined the RTG purchasing cooperative group.

Mere, the Russian discount grocer, plans to enter the Serbian market.

Lidl is launching its Lidl Plus smartphone-based loyalty system across Germany.

Despar Italia has launched the 'Despar Veggie' range featuring 36 SKUs with V-Label certification.

Marks & Spencer is adding 750 food products to its online range for the retailer’s launch on the online grocery platform Ocado.

Spar Hungary has introduced eco-friendly food packaging, including a BPA-free, vegan, washable food bag.

Amazon has developed a “smart” shopping cart that keeps track of shoppers’ purchases and allows them to complete their transaction while exiting the store.

Danish retailer Salling Group is renaming more than 6,000 private-label SKUs under the Salling brand with a new packaging design.

Albert Heijn is introducing salad bars in approximately 100 stores before the end of this year.

Auchan is working with Glovo, the food delivery company, in four European markets and is extending the reach of its click and collect services in Poland.

Plus in the Netherlands is introducing new packaging for its private label products.

Coop Switzerland is adding nine vegan ice cream items to its assortment.

Dutch retailer Jumbo has launched the ‘Lekker Veggie’ meat alternative range offering 42 vegetarian and vegan items.

Portuguese retailer Continente is launching a premium dry and wet dog and cat food range under the UPPY brand.

Spar Austria is testing filling stations for unpackaged and loose organic food items in a hypermarket in Salzburg.

Netto Denmark is planning to automate its distribution center in Køge that supplies 600 stores with dry groceries.

Market Research 
Online shopping grows across Europe

E-commerce in Europe is expected to be worth 717bn euros at the end of 2020. That would mean an increase of 12.7% compared to the situation last year. This growth is somewhat lower than the 14.2% increase of the European e-commerce in 2019.

A report from Retail X shows that Western Europe is still the most developed ecommerce market in Europe. This region accounts for 70% of the total e-commerce value in Europe. Western Europe also has the highest share of online shoppers (83%). The biggest growth, however, can be found in the eastern part of Europe. The e-commerce markets in Romania and Bulgaria both increased by 30% last year, which is the highest growth number in all of Europe.

Organic food sales up in Denmark

Organic food sales in Denmark increased by 9% year-on-year in 2019, to DKK 14.1bn (1.89bn euros), accounting for 12% of total sales, according to data from Statistics Denmark. Organic milk, grains, flour and vegetables emerged on top of the Danish shopping list, but other product categories also saw a significant increase in demand.

The desire for more organic products among Danish consumers is also reflected in the constant growth in organic food sales over the past five years. The study listed spirits (+34%), wine (+19%), cookies and crackers (+28%), rye bread (+23%), and frozen vegetables and potato products (+45%) as the top five fastest-growing organic products in 2019.

PLMA News 
Over 40 retailers win Salute to Excellence Awards

Forty-three retailers were winners of PLMA’s 2020 International “Salute to Excellence Awards”, in recognition of innovation and quality of their private label food and non-food products. Nearly 550 products introduced in the past year were submitted for consideration in the world’s largest competition dedicated exclusively to own brands. Award-winners in food and beverages, as well as non-food, reflected many of this year’s strongest new product and consumer trends. Key features were natural and organic ingredients, environmentally conscious agriculture, responsible aquaculture, and protection of nature and preservation of the environment.

Thirty-six Salute to Excellence Wine Awards were also given to 16 retailers from 7 countries for best quality or best value.

The award-winning food and non-food products were selected in August by panels of judges, consisting of industry professionals, including chefs, former retailers, academics, nutritionists, journalists, and packaging specialists. Please click here to see the full results.

Online Executive Education Programme, 27-28 October

PLMA is offering an online edition of the Executive Education Programme on 27-28 October.  Classes include lectures and interactive sessions, entirely devoted to private label. Industry experts and faculty speakers offer information on how to develop products and build private label brands. To register or receive more information, please contact PLMA at education@plma.nl.

Events 
27-28 October

Online Executive Education Programme

1-4 December

2020 Online “World of Private Label”