October 2024

Industry News
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.

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.

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.

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.”

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.

PLMA Live.eu
Next-Level Loyalty Programmes

Boosting engagement and gathering data have always been the primary functions of loyalty programmes. Judith Kolenburg reports on how retailers are thinking further ahead and combining traditional loyalty cards with digital platforms to enhance the customer experience and drive sales. Carrefour, Delhaize, Lidl, and Aldi are among the retailers profiled. 

In other news, retailers and manufacturers are urging consumers to trust their sense of taste, smell or sight before discarding products that are near or even past their 'best before'-date. Pascal Kuipers examines the latest efforts to combat food waste in grocery retail. 

The Key to Successful Buying and Selling

One of the major challenges of today’s modern leadership is understanding and communicating effectively in a five-generation workplace. 

Karen Green, experienced retail seller and buyer, and founder of Buyer-ology®, outlines her matrix and five-stage B-U-Y-E-R process to effectively profile targeted customers and ultimately increase success in selling opportunities.

In the stores

Waitrose is letting customers bring their natural wine bottle corks to its stores for a recycling trial. A third-party provider will reprocess the used corks to make products like flooring, insulation, aircraft components or mulch to improve soil.

dm is adapting its own brands to align them to the retailers’ international expansion. In order to reduce possible language and comprehension barriers, the imagery is to be improved, and local language will be used.

Jumbo has launched a new own brand called Jumbo’s. The new line comprises ready meals and poke bowls. The meals are located in the refrigerated department, adding a luxury touch appearance.

Carrefour has started the rebranding of the acquired 60 Cora stores to the new banner. Customers will see their store transform to gradually adopt the codes of the Carrefour group.

Aldi Nord is closing its first cashierless store in the Netherlands. The experiment that was launched two years ago was educational but is too expensive to continue.

Conad has announced it aims to double the number of its own brand Piacersi items to increase the share on the total of Conad private label products. Currently, overall, its own brand lines are worth 6 billion in total. Piacersi is dedicated to people who consider it a priority to take care of their physical and mental well-being.

Edeka has started the campaign of its new own brand “Herzstücke”. With the move, the retailer wants to boost its own brand share in sales. The range includes around 1,000 items in total.

Consorzio C3 has renovated its own brand line of Noi&Voi beverages. The quality has been enhanced and the design includes new graphics with bright colours and a layout that highlights the product.

Tesco has introduced a new luxury private label for meat, called Finest Steakhouse. The line has a dedicated fixture in the meat department displaying steaks, alternative mains, a range of tempting sides as well as steak sauces and steak butters.

Aldi Süd has increased the share of plant-based products in its range to 60 percent. The company now has more plant-based products than animal-based products. Aldi Süd also offers over 1,200 types of products labelled vegan. This number is expected to rise to 1,400 by the end of 2026.

Selex Group has a new TV campaign in Italy emphasizing the Selex private label. The own brand offers high product quality, guarantees competitive prices, a wide range of products and increasing attention to the issues of sustainability and territorial origin.

Continente is taking another step towards an inclusive society, by integrating translation into Portuguese sign language into its advertising films. With the new approach, Continente wants to expand the accessibility of its messages, contributing to an all-inclusive society.
 

Market research
2025 food and drink trends revealed

Mintel has published its global food and drink trends report for 2025. The researchers explored what it is that influences consumer behaviours and attitudes toward food and drink. The experts predict that four topics will prevail for consumers:

Fundamentally nutritious. The emergence of weight-loss medications like Ozempic will redefine consumer perceptions of ‘food as medicine’ from added functional ingredients to meeting daily essential nutrient needs.

Rule rebellion. Embrace consumers as ‘perfectly imperfect’ beings who are hungry for brands that help them ‘break the rules’ in food and drink.

Chain reaction. As disruptions to the food supply become more frequent, the industry will need to encourage consumers to accept and trust the new origins, ingredients and flavours that will emerge locally and globally.

Hybrid harvests. Food and drink companies will need to demonstrate how technology and agriculture work together to benefit consumers, farmers and the environment.

Retailer apps in Germany are widely used, save money

A study by the consulting firm Simon-Kucher reveals that 80% of customers in Germany already use retailer apps, with this figure reaching as high as 96% in the drugstore sector. The survey, which involved 1,000 consumers, explored how app usage influences shopping behaviour.

The primary motivation for using these apps is saving money. Over three-quarters of respondents (83.2%) said the apps make them more aware of discounts, while 73.1% reported that they are able to make cheaper purchases through the apps. About half of the participants indicated that they shop more frequently and in greater quantities using retailer apps. Additionally, most respondents noted that the apps improved the efficiency of their shopping experience and overall satisfaction.

These apps also encourage users to explore new products. Features like product recommendations (55.7%) and discounts (64.4%) prompt users to try new items, although discounted products tend to be added to carts more often than those simply suggested by the app.

In terms of in-app purchase incentives, personalized discount coupons on specific items, volume discounts, free products, and bonus points were the most favoured. In contrast, digital flyers and competitions were significantly less appealing to users.

PLMA News
Record number of international suppliers at PLMA's US Show

Responding to American consumers' increasing appetite for food products featuring ethnic and international ingredients and flavors, PLMA will present retailers with a record 900 suppliers from more than 60 countries at its 2024 Private Label Trade Show, November 17-19, Chicago.

The Show floor will offer 52 country and regional pavilions, another record, from North and South America, Europe and Asia, to enable buyers to source new and innovative products for today’s more discerning shoppers. New pavilions include Morocco, Poland, Vietnam, Portugal and Costa Rica. There are also expanded groups from Australia, Canada, Chile, France, Greece, Guatemala, Italy, Peru, Spain, and Ukraine.

Events
PLMA's Annual Private Label Summit - Milan

At the Annual Private Label Summit, participants engage in a programme featuring presentations, panel discussions, networking opportunities, and a store tour delving into the retail landscape of Milan. The venue rotates annually among major European cities.

29-30 October 2024
Milan, Italy
Registration Details