the groisru6 e by coolkdei2

thegrocer.co.uk

1 February 2020

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FASCIA SPECIAL

How have symbols evolved in wake of consolidation?

PETFOOD How flurry of buyouts could consolidate challenger market DRS Timeframe ‘impossible’ SUSTAINABILITY Sainsbury’s pledges spark race to net zero

I WANT THAT JOB Strategic development manager at Laxey Glen Mills P66

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VEGANUARY Huge demand from 8 Nisa retailers SPIRITS Chase Distillery for sale 10 SUSTAINABILITY II What Nestlé’s 14 £1.6bn plastics pledge entails BIG INTERVIEW CEO Darcy Willson44 Rymer: Costcutter’s survivor READY MEALS Charlie Bigham’s 46 debuts in desserts HOUSEHOLD Own label bests 47, 53 brands in battle of bog rolls DAIRY Freshways adopts Medina’s Watsons Dairies branding as 50 relationship deepens PEOPLE New boss at Müller Milk & Ingredients as Müller stands down 64

leader

for more opinion see pages 22–25 To comment on an article, or read what others say, go to thegrocer.co.uk

top stories this week on thegrocer.co.uk

“The UK needs a universal recycling scheme to create the circular waste economy everyone wants” Adam Leyland, Editor

“Unilever’s tea brands feel like more of a commodity” Emma Weinbren, group features editor

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our hundred and four milliseconds. Less than half a second. That’s how long it can take for consumers to decide which product to choose when shopping for groceries, according to a 2011 study. So imagine how much shrift that same shopper is going to give, at the end of a product’s short life, to a recycling label that asks them to ‘check local recycling’ or states that an item is ‘not widely recycled’. A decision this week to scrap those two labels (p4) is therefore to be welcomed. The new recycling labels are binary: either it’s recyclable or it’s not, the On-Pack Recycling Label (OPRL) has decided. This will have two key benefits: it will stop angst-ridden consumers wasting time on local authority websites (or the black hole that is recyclenow.com). And it should encourage more producers to use substrates that are universally recycled – producers like Nestlé, which has just spent £1.6bn on a programme to support precisely such an outcome (p14). So far so good. But not only should the label be mandatory. It’s a pragmatic measure to overcome policy shortfalls: for the new label means items that previously were recyclable (but by less than 50% of local authorities) will now go to landfill in even greater numbers. Which just seems a crying shame. We should be building a universal recycling scheme in the UK to recycle as much of the waste we generate as possible. That’s where the new Environment Bill, going through parliament this week, needs to come in. It heralds a world of pain and cash for producers via extended producer responsibilities that will be effective from 2023. But if the industry is going to have to pay, it must also insist that the programme is workable and not riven with the political point-scoring already characterising DRS (p4). This must not simply be a tax like the Soft Drinks Industry Levy. It should be a joint endeavour to create the circular waste economy everyone wants. An economy with an estimated value of £408m. To do that it will need to be simple – but not so simple that genuinely recyclable material isn’t simply sent to landfill.

So it turns out PG Tips may not be Unilever’s cup of tea. Or Lipton, or Brooke Bond, for that matter. Because after months of rumours and denials, the giant has confirmed a potential selloff of its tea division. It’s not a big surprise. Black tea has been in long-term decline, prompting Unilever CFO Graeme Pitkethly to brand British tea drinkers “a dying breed” in October. Unilever’s flagship PG Tips has suffered most with a £5.6m decline last year, relegating it to the third-largest tea brand after Twinings and Yorkshire Tea. That’s largely because its rivals have established clear selling

points. Yorkshire Tea trades on its strength. Twinings has used its premium credentials to create a platform of flavour and variety options, from green tea to Cold In’fuse. Unilever’s tea brands feel like more of a commodity, unable to move with market trends. The surprise return of the Brooke Bond brand, which traded largely on low price, is unlikely to change that perception. On the flipside, its premium herbal Pukka brand is a modern and flexible brand – and growing fast. So that’s one to keep in the cupboard.

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quote of the week “There’s not a snowball’s chance in hell of the government hitting this schedule” p4

More on page 11 1 February 2020 | The Grocer | 3

news

Supermarkets and suppliers agree simplified recycling labels Ian Quinn Supermarkets and suppliers have agreed to make major changes to on-pack labelling in a bid to end consumer confusion over what types of plastic can be recycled. The shake-up, which involves most of the major supermarkets and hundreds of suppliers, will see them switch to a simplified system that will tell consumers to either ‘recycle’ or ‘don’t recycle’ packaging. Previously, thousands of products have carried labels advising consumers to check whether local authorities recycle packs. The On-Pack Recycling Label (OPRL) – the umbrella body behind the shift – said the new system would be simpler for consumers to understand. It could prevent large amounts of packaging such as black plastic being sent to local authorities by households unaware it ended up in landfill, it added. The changes mean plastic packaging including PVC, polystyrene pots and non-infrared detectable black plastic will be

Simpler labels will read ‘recycle’ or ‘don’t recycle’

labelled ‘don’t recycle’, in packaging rolled out from 1 February. While supermarkets have been moving to rid their shelves of the material, some suppliers had been much slower, said industry sources. Confusion among consumers over what is ‘good’ and ‘bad’ plastic had been made worse by a lack of clarity in labelling, they added. Previously, packaging could have been labelled ‘Check Local Recycling’, even though as few as one in five councils accepted the material. The move would also scrap the ‘Not Yet Recycled’ category, which has been used by OPRL members on packaging when fewer than 20% of UK local authorities collect that material. It comes ahead of the government’s planned extended producer responsibility policy, which would make companies responsible for the cost of recovery for their products. “Having a straightforward binary approach to these labels will hopefully give greater clarity to consumers,” said OPRL chair Jane Bevis. “This will give consumers the certainty they have been calling for when it comes to plastic and the knowledge that if they put something in the recycling then they can expect that it will end up being recycled.”

4 | The Grocer | 1 February 2020

Defra has reportedly told the industry a formal consultation will not begin until summer

Industry leaders slam ‘impossible’ timetable for DRS Ian Quinn Industry leaders have described the government’s proposed timeframe for the rollout of its bottle deposit return scheme as “impossible”. Retailers, suppliers and trade bodies were this week summoned for talks by Defra about its key environmental proposals, with the government’s Environment Bill starting its passage through parliament on Thursday. However, the proposed schedule for the rollout of DRS in 2023 has been met with incredulity. Defra is reported to have told the industry a consultation will not even begin until the summer and could even be held up until the autumn, having been delayed by the election and Brexit.

Defra has forecast that the regulations needed to start rolling out the infrastructure for a DRS are not expected to be passed until the end of 2021 at the earliest. This would leave just 12 months for it to be introduced to thousands of stores. Industry sources have warned that with an estimated 30,000 DRS machines needed to cover the UK, at a cost of up to £2.2bn, there is no chance of the store and warehouse refits needed being carried out in time for 2023. “There’s not a snowball’s chance in hell of the government hitting this schedule,” said one source. Another described Defra’s timeline as “absolutely impossible”. “To try to squeeze the rollout of

DRS into just one year simply isn’t going to work.” Meanwhile, the Scottish government is pushing ahead with plans for DRS to start there in late 2021, though it is also facing claims its timeframe is impossible. A source said: “There are already concerns in Scotland about the timeframe, but the task across the whole of the UK is much bigger. We think it will take stores nine months to get planning permission for the machines, just in Scotland.” The Grocer understands industry bodies have accepted that DRS both in Scotland and the rest of the UK will include glass, as well as plastic. Defra declined to comment.

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SOURCING STRUGGLE It’s a lot harder trying to get reliable data for Kenyan bean producers – retail source

Sainsbury’s carbon neutral pledge sparks net zero race Ian Quinn Sainsbury’s has thrown down the ‘net zero’ gauntlet with a £1bn pledge to be carbon neutral by 2040. The grocer said it would slash emissions by tackling food waste, plastic and water usage. It would also look to increase recycling, biodiversity and healthy and sustainable eating, and work with suppliers to set their own ‘net zero’ commitments, in line with the UN Paris Agreement. The move is a genuine first, with no other food retailer having set such an ambitious target. “We have over 27 million customers each week and almost 180,000 colleagues, and we hope we can collaborate across industries and sectors to create momentum and meaningful change,” said CEO Mike Coupe. However, industry experts also warned it faced major barriers,

Sainsbury’s has pledged to cut emissions via food waste, packaging and water usage

while rival retailers stressed their own commitments. “This is a hugely competitive space and Sainsbury’s has stolen a bit of a march on its rivals,” said one leading retail source. “They will be looking to follow suit with their own pledges.” However, the question

of how Sainsbury’s will bring its global supply chain into line with its commitment has been raised. “That is the big question here,” said the source. “How do you measure, monitor and reduce the impact from your supply chain in other countries? “It’s all very well

changing your own impact when it comes to stores, lighting, refrigeration, that sort of thing, but it’s a lot harder trying to get reliable data for Kenyan bean producers.” A rival supermarket source added: “It’s important to note that this is across their own operations. They have no

target to address product related (indirect) GHG emissions.” Tesco said it had become the first FTSE 100 company to set “ambitious science-based targets” to become a zero-carbon business, though at 2050 it would be 10 years behind Sainsbury’s pledge. But Tesco said it had set its suppliers a target of reducing carbon emission by 7% by 2020 and 35% by 2030. Morrisons’ CSR report last year claimed it had reduced carbon emissions by 45% since 2005, compared with Sainsbury’s 35% over the same time period. Asda said it had cut its carbon footprint by 38% since 2007, with a 13% reduction last year. The Co-op said it would reduce direct GHG emissions by 50% from 2016 to 2025, and product-related emissions by 11% over the same period.

Fishermen call for supers to sell UK-caught sardines British fishermen have called on retailers to use UK-caught sardines in canned products, rather than fish from uncertified fisheries abroad. Sardines in all ownlabel supermarket cans are sourced from Portugal and Morocco, according to analysis by The Grocer, while the lack of a domestic market compels most UK fishermen to export.

Portuguese and Moroccan sardine fisheries are not recognised as sustainable by the Marine Stewardship Council, though Morocco is part of a fishery improvement project. The Cornish sardine fishery is the only MSC-certified stock in Europe. Environment secretary Theresa Villiers introduced the government’s new fisheries bill

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to parliament this week with a pledge that the UK will “take back control of its waters” after Brexit. However, questions have now been raised as to why fish caught in British waters is not always available to British customers. “The supermarkets all say they’re trying to do more and be more sustainable but here’s an opportunity to buy local

and they’re not doing anything,” said David Pascoe, a sardine fisherman based in Plymouth. Nick Howell, owner of The Pilchard Works in Penzance, said many supermarkets had been unwilling to use his sardines in own-label products due to higher costs. Howell uses a premium canning method, though most British fishermen tend to use the same

method as processors in Portugal and Morocco. “We’ve had conversation with some supermarkets about putting our sardines in their own-brand products, but they never went anywhere,” he said. The MSC would encourage retailers to start using Cornish sardines in their tinned products, said George Clarke, MSC senior commercial manager.

1 February 2020 | The Grocer | 5

USER-FRIENDLY PACKAGING This trial is the largest ever of its kind and we’re excited to see how customers respond to the solutions provided – Richard Walker, MD, Iceland

news

Booths adds own-brand ‘healthier’ ready meals Upmarket independent supermarket chain Booths has expanded its own-label offering with a new range of ready meals aimed at the health-conscious shopper. The ‘Healthy Plates’ range consists of four SKUs: beef ragu & gemelli pasta, chicken & green bean risotto, chicken & lentil hot pot and a roasted vegetable biryani. Each product has been developed to come in at under 400 calories, less than 3% fat and contain one of the recommended 5 a day. “We’re absolutely delighted to launch our new healthy plates range,” said product developer Kate Rathbone. “Each dish offers nutritional value yet is uncompromising on flavour and quality.”

China exporters fear coronavirus chaos Harry Holmes Food and drink exporters to China are fearing severe disruptions following the outbreak of the Wuhan coronavirus. The number of confirmed cases of the virus in mainland China now exceeds 7,000. Airlines including British Airways have suspended all fights to mainland China. Quarantine measures are now in place to try and limit the impact, including restricted movement around Wuhan, and a ban on wildlife sales at restaurants and markets. But further restrictions are likely after Beijing announced Sunday that it expects the transmissibility of the virus to grow.

Confirmed cases of the coronavirus have reached 7,000

Paul Moorcroft, consumer head at law firm Eversheds Sutherland, believes ports may soon introduce controls. “I would expect livestock will all be closed down and quarantined. Other goods will be of less biological risk and may not be impacted.” Elsa Fairbanks,

director of the Food & Drink Exporters Association, agreed that access to China could become strained. “It’s not going to be easy to access China as a market,” she said, stressing the latest crisis is largely unprecedented. “Seventeen years ago when SARS hit, we

weren’t sending that much to China,” she said. “But this is new to all of us. It’s the first time we’ve spoken about it the way we are.” Exports to China surged following the SARS outbreak in 2003 as Beijing introduced sweeping market reforms. British food and drink companies sent £596m of goods in 2018, up from £22m in 2002, UK export data shows. “A lot of our business is with high-end hotels and restaurants which will be affected because no one is moving,” added Stephen Jones, MD at Somerset-based cheese exporter Somerdale International. Analysis p16

Iceland trials cardboard and Asda reworks Easter paper packaging for fruit & veg eggs to cut plastic Iceland is trialling cardboard and paper packaging on swathes of fresh fruit & veg, in a move it says could save over 400 tonnes of plastic. Some 38 lines are getting new packaging solutions that either reduce plastic content or eliminate it altogether. Overall the measure reduces plastic packaging used on the lines by 93%, according to Iceland. It launched as a trial in 33 stores this week, which alone could save seven tonnes of plastic a year – a figure that

MD Walker: ‘we understand concerns about plastic’

will rise to 440 tonnes if rolled out across the estate, Iceland said. The measures include putting apples, oranges, tomatoes and peppers in cardboard boxes, and wrapping celery and spring onions with paper

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bands. Other produce such as grapes, blueberries and kiwis are now in cardboard boxes with a plastic film top. Iceland said the trial involved 29 “UK-first packaging solutions”, after months of testing. “We understand that consumers are particularly aware of the amount of plastic being used to package produce across the industry and we’ve been working hard to develop user-friendly, sustainable alternatives,” said Iceland MD Richard Walker.

Asda is reshaping its Easter eggs in a move to slash the amount of plastic packaging they need. In what it claims is an industry first, the supermarket said the new shaped eggs would use 98% less plastic – saving a total of 16 tonnes year on year. The move will see the eggs change from a wider, round shape to a thinner, oval shape, which will mean they do not need to be supported by plastic packaging, and instead uses recyclable cardboard.

Asda said it was part of the retailer’s ‘Reduce, Reuse and Recycle More’ initiative and vowed it would not mean the amount of chocolate in its eggs being shrunk. The new range, which will be in store and online from 10 February, is made with 100% sustainable, UTZ-certified Belgian chocolate. “We are passionate about delivering our commitment to customers to use less and recycle more,” said Shelley Solomon, senior director, impulse grocery at Asda.

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news technology & logistics

Tesco unveils new credit card as part of loyalty push Tesco is seeking to drive up membership of its new loyalty card programme with its own credit card. The supermarket today unveiled its new Clubcard Plus Credit Card from Tesco Bank, with features including no foreign exchange fees and 0% interest on purchases for up to 18 months. It follows the launch in November of Clubcard Plus, a new monthly subscription, which for £7.99 a month gives subscribers 10% off two big shops in store every month and 10% off selected Tesco brands every time they shop in store. Tesco said the main benefits of the Clubcard Plus Credit Card included collecting Tesco Clubcard points on almost all purchases as well as no over limit, late payment or returned item fees.

Abel & Cole set to sell unpackaged groceries Lois Vallely Online grocer Abel & Cole is set remove single-use plastic from a range of pantry items – and deliver them in returnable, reusable pots instead. The direct to consumer business claimed the service – which it has called Club Zero – will be the first of its kind in the UK. It will be trialled on 300 of Abel & Cole’s customers, with a plan to roll the service out to all 60,000 customers by the end of February. Members of the service will be able to order staple items such as pasta, rice and lentils in reusable containers, which are nicknamed “VIPs” (very important pots) and will be

Lentils, rice and pasta will be available in reusable pots

collected by Abel & Cole the following week. The retailer hopes the trial will represent a “shift in the way people purchase staple pantry goods”. MD Hannah Shipton said that, as people have become increasingly aware of climate change, the brand has witnessed

a “huge growth” in appetite for sustainable products and ways to shop. “A significant part of the trial is establishing the return and reuse rates of the pots, both of which play a fundamental part in driving the environmental benefits,” she said. “We will

use the trial results to set a benchmark from which we will look to continually improve.” Abel & Cole is best known for its organic fruit and veg boxes, recipe kits and chilled goods but it has more than 2,600 ambient grocery SKUs available to purchase, including toiletries, babyfood, bread and cooking sauces. It estimates it has saved 55 million singleuse plastic bags from landfill and reduced single-use packaging waste by 88% in the 30 years since it was founded. The delivery business certified as a B Corp last year, vowing to find “innovative ways to be as sustainable as possible”.

Drinkly alcohol delivery app Deliveroo launches seeks £250k to fund expansion healthier options An alcohol delivery app that connects consumers to nearby off-licences and convenience stores, is set to raise £250k in a crowdfunding round. Drinkly operates in Edinburgh, Glasgow and London, fulfilling drinks orders within an hour. The startup – which has received the backing of BrewDog co-founder James Watt – intends to expand into 150 locations by December. The company was offering just over 7% equity in the business for the target amount.

Drinkly offered just over 7% equity in the business

Founded in 2016, Drinkly says it can add more than 30% additional revenue to partner stores. In return it takes up to a quarter of each sale. Once an order is made on the app, the delivery

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is done by the store itself, or through a third party. The startup’s founder and CEO John Robertson said the service was distinct from the likes of Deliveroo because of its alcohol focus. “Deliveroo have done an excellent job expanding the food delivery space but for platforms like them, anything other than hot food is an afterthought,” he said. “On-demand services can’t always deliver heavy orders and you can’t gift on Deliveroo,” Robertson added.

Deliveroo is launching several health-focused delivery-only brands, which will be licensed to restaurants to operate from their own kitchens. The takeaway tech firm is creating a series of new restaurant brands “from scratch”, each with its own name, logo, menu and recipes. “Deliveroo will own the name and logo of the brand, but partners will operate the brands out of their own kitchens,” the company said. The first of the new brands is called Dream

Burger, promising a range of “healthy, affordable and tasty burgers and sides” including plant-based options. Each menu item has been created in partnership with nutritionist Rhiannon Lambert. “We have created a menu of mouthwatering, quick, affordable and nutritious meals,” Lambert said. “Our approach couldn’t be more straightforward. We want to boost healthy eating across the UK.”

1 February 2020 | The Grocer | 7

news wholesale & convenience

JJ Foodservice plans three new depots for expansion JJ Foodservice plans to buy three new cash & carry depots over the next five years. The wholesaler hopes to purchase warehouse space in West London this year. However, it is having trouble locating suitable space. “We’re ready to grow, but our biggest challenge is finding suitable freehold sites,” said group general manager Terry Larkin. “We are urging anyone with a warehouse between 20,000 sq ft and 50,000 sq ft in West London to get in touch.” The business, which currently has 11 depots, will be seeking two further sites outside London. The expansion plans follow the wholesaler’s £10m investment replacing its delivery fleet to carbon-emission compliant vehicles.

East End founders set to buy back two depots Lyndsey Cambridge The founders of East End Foods are set to buy back their two cash & carry depots from private equity firm Exponent, The Grocer understands. The deal for the sites at Smethwick and Aston in the West Midlands is being led by Jason Wouhra and several other members of his family and is set to be completed imminently. East End Foods was established by five Wouhra brothers in 1972 and the buyback comes just four months after they sold the wider business to Exponent. The Grocer also understands former Landmark Wholesale trading director John Searle has been brought on board for the

East End Foods was sold to PE house Exponent last year

project, though details of his role are not yet clear. East End was a leading member within Landmark before the group’s merger with Today’s Group to form Unitas Wholesale in 2018. When Exponent bought East End in September it was widely thought it was primarily

interested in its food production arm, rather than the traditional cash & carry operations. It bought East End in September, having previously acquired another Asian food wholesaler, TRS, in June. Exponent is now looking to bring the two businesses closer together. Documents

filed at Companies House show TRS CEO Umesh Parmar officially took on the role as CEO of East End Foods on 16 January. Jeremy Hudson was also named as director, straddling both businesses. At the time of the East End deal, the PE firm said a number of the Wouhra brothers would “continue with the family business”. However, eight members resigned as directors of East End on 26 November. Both Jason Wouhra and John Searle declined to comment. In its most recent accounts, East End’s profit before tax for the year ending 30 April 2019 jumped 71% to £15.3m. Turnover for the period was up 7% to £205m.

Almost 2,000 Nisa retailers Gro vegan

Tuffins celebrates as Shrews level with Liverpool on TV There were celebrations last Sunday as League One Shrewsbury Town came from 2-0 down to draw with Liverpool in the FA Cup – including for the team’s shirt sponsor, independent retail chain Tuffins. The game was watched live on BBC One by 6.3 million people. Shop sales increased by 10% in January, said MD Paul Delves. The retailer is even planning to ship some Shropshire cider to a customer in Chile, who searched online for Tuffins during the game. 8 | The Grocer | 1 February 2020

The Co-op’s new vegan range Gro has made a strong debut in the independent channel. The own-brand range, launched last month to coincide with Veganuary, has already been listed by 1,900 Nisa retailers. “More than half of shoppers now say they would like a greater choice of more convenient vegetarian and vegan options, so we have increased the amount of plant-based ready meals and pizzas available with some great meals in the Gro range

particularly,” said a Nisa spokeswoman. “We’re confident that, working with the Co-op, we are offering Nisa partners the opportunity to be market leaders within the sector for the meatfree category and the addition of the Gro range makes our offer even more compelling.” The top five selling lines in the range to Nisa retailers so far are the falafel and wrap, chilli con nachos, creamy coconut cauliflower curry, Kashmiri spice pizza and Incredible Burger.

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news finance

Chase Distillery mulls options including sale Daniel Woolfson & Alec Mattinson Chase Distillery has engaged advisers to explore its options, including a potential sale, The Grocer understands. The Hereford-based brand is understood to have been working with investment bank Rothschild to lay the groundwork for an exit. When approached by The Grocer, founder William Chase said a sale process was not currently ongoing. Instead, he was focused on exploring funding options for his Willy’s gut health drinks brand, he said. Latest financial results for Chase Distillery, filed at Companies House,

Chase Distillery rebranded its entire spirits range in 2018

show turnover of £16.9m from 1 August 2017 to 31 December 2018, with operating profits of £1.2m. Chase rebranded its entire spirits range in 2018, playing up the drinks’ provenance. It has two MDs: it hired Bacardi’s former travel retail boss, Andrew

Carter, as joint MD in 2018, while fellow MD Adrian Jones has been at Chase since 2014 and is a former corporate financier. “I would imagine [businesses] like Campari and Halewood would be interested,” a senior drinks source told The Grocer. “It is a nice brand

with a growing international presence.” William Chase came to prominence as the founder of Tyrrells crisps, which he sold to Langholm Capital for almost £40m in 2008. “They built Tyrrells up, sold it, then took the money and built Chase. So perhaps they would sell that while they’ve got this soft drink thing bubbling up in the background,” said the source. An international buyer would likely be interested, he said, “because all the production and branding is done and it has a nice story”. “They would be able to roll it into markets using their global footprint faster than [Chase] could do themselves.”

Well & Truly is hoping to grow by 150% in 2020

Well & Truly gains £500k investment Healthy snacking startup Well & Truly has secured a £500k investment from industry fund The Health Group to target ambitious 150% sales growth this year. The latest investment took the total raised by the startup since 2016 above the £1m mark. It will use the money raised to cover marketing activities, including the launch of its first-ever brand campaign, and to expand its sales team with hopes of growing by 150% in 2020.

Eat returned to profit before its Wells profits jump 2019 sale to rival Pret a Manger following rebrand Food-to-go chain Eat returned to profitability in the year ahead of its sale to rival Pret a Manger. The sandwich retailer posted pre-tax profits of £418k for the year to June 2019, showing a recovery from a £7.1m loss the prior year. An expansion in Eat’s franchise business, with income growing nearly 50%, a consolidation of the shop portfolio and NPD were cited as the main reasons. Sales slumped 5% to £90.2m following the

Eat: three more stores to be converted to Veggie Prets

closure of some non-core or unprofitable stores during the year. On a like-for-like basis revenues were 3.3% higher, however, marking 17 consecutive months of growth, with the chain hailing a

10 | The Grocer | 1 February 2020

successful rollout of its Smart Eat shop concept, which has hot self-service options to improve speed of service and delivery. Eat, which was sold to rival Pret a Manger for an undisclosed amount in May 2019, said likefor-like momentum continued. But three stores have been converted into Veggie Prets, taking the number to seven, with a further three conversions planned for early 2020, a spokeswoman told The Grocer.

Wells & Co’s profits have jumped following a rebrand as it prepares to re-enter brewing. The pub group posted operating profits of £5.3m for the year to 29 September 2019, up 5.2% year on year, boosted

Construction of Wells’ Brewpoint site is underway

by an increase in sales. Turnover rose 23% to £53m, with £16.1m generated from its UK managed estate. In June 2019, Wells & Co announced a complete rebrand, which will see it re-enter the brewing industry this year, having sold its brewery and brands to Marston’s in a £55m deal in 2017. Construction of Brewpoint, its Bedfordbased brewery, pubrestaurant, retail shop, coffee roastery and visitor centre, was now “well underway”.

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STEWED? Our tea business has a disproportionately large footprint in black tea – Alan Jope, CEO, Unilever

PG Tips tea business on table as Unilever explores all options Elena Cherubini Unilever has initiated a full strategic review of its global tea business, which could lead to a sale, despite its pledge two months ago to keep the brands. In November, the fmcg giant denied media reports it was preparing a unit sell-off – including PG Tips and Lipton – suggesting it would rather push the brands into high-growth areas such as herbal tea, where its premium brand Pukka is “performing well”. However, CEO Alan Jope said this week “all options remained on the table” for the underperforming unit, after formally triggering a review. “Our tea business has a

Unilever has a ‘large footprint in black tea’

disproportionately large footprint in black tea, which is slower-growing,” he added. “Tea has a long track record of being dilutive to growth and margin, so this strategic review announcement means we want to investigate how we can best create value for stakeholders.” Jope compared the tea division to Unilever’s

former spreads unit, which was sold to private equity giant KKR in 2018 for a whopping €6.8bn. City sources have previously argued a private equity buyer would be the most likely contender for Unilever’s tea division. However, given Lipton’s ties with PepsiCo – through a US joint venture in iced tea – a trade sale remains an option. Russ Mould, investment director at AJ Bell, said it was “little wonder that Unilever’s tea brands are poised over the rubbish bin”, after sluggish growth dented the company’s annual results. Unilever sales rose 2% to €52bn in 2019, but pretax profits dropped 33% to €8.3bn.

Brave Foods secures six-figure funding to battle nut category Pulse snacking brand Brave Foods has secured a “large six-figure” cash boost to accelerate growth as it seeks to take on the nut category. The investment – of which no financial details were disclosed – was led by Döhler Ventures, the investment arm of German ingredients maker Döhler. Döhler had not been “too active on the UK scene” with only three investments so far, but had built a “broad portfolio of food and drink brands” across Europe,

Brave makes roasted peas and chickpea snacks

said Brave co-founder Amber Fraser-Sokol. “They are going to bring huge value to us, not only from their industry experience and knowledge, but also their contacts within the wider European market.”

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Brave’s existing angel investors, who in 2017 injected around £200k into the brand, also followed on in the latest round. The startup, which makes roasted peas and chickpea snacks stocked by Sainsbury’s, Boots and Holland & Barrett, will primarily use the funds to boost awareness of its brand, and of the pulses category in the UK, through marketing. “We really believe in pulse snacking,” FraserSokol added. “It ticks every single major trend.”

city news

DIAGEO SHARES Dates: 30 January 2019 – 30 January 2020 3,900 3,600 3,300 3,000 2,700 J

J 2019

J 2020

Spirits giant Diageo cut its full-year guidance this week as worries mount across the drinks industry on the impact of Hong Kong protests and the coronavirus situation in China. The FTSE 100 Johnnie Walker owner expected its full-year sales growth to come in at the lower end of its 4%-6% mid-term guidance after warning of “uncertainty in the global trade environment” and volatility in key growth markets. Diageo cited a slowdown in India and “challenging” trading conditions in the Middle East and Hong Kong, which hit first-half revenues in its Asian travel arm. It said it was monitoring the coronavirus situation in China, but declined to elaborate on its potential impact. Ask Traders analyst Nigel Frith argued the spread of the virus could have a serious impact on the group. “China is also a key market for Diageo, where it has retail outlets for Johnnie Walker and owns the brand Shui Jing Fang. Sales there are expected to be eroded and significantly.” Diageo reported first-half net sales of £7.2bn in the six months to 31 December, an increase of 4.2% largely driven by price as organic volumes rose just 0.2%. However, reported operating profit of £2.4bn increased by a more modest 0.5%, hampered by unfavourable exchange rates, exceptional items and acquisitions and disposals. The City had predicted a sales impact from global economic turbulence, but the downgrading of second-half growth sent the shares down 2.5% to 3,029p on Thursday morning. Meanwhile, fellow spirits producer Rémy Cointreau also revealed a sharp slowdown of sales in the third quarter ending in December. It revealed an 11.3% slump in quarterly sales, with even its core brands dropping 7.2%. It highlighted the “uncertain geopolitical environment” and political situation in Hong Kong as key drags on performance and notably declined to give the market any sales guidance for the full year until new CEO Eric Vallat lays out his plans. The shares fell 11.7% to €98.95 on the results and slid further to €95.55 by Thursday lunchtime. Track the latest share price movement and performance of 200 UK and international grocery and fmcg stocks via the new Grocer Finance channel at thegrocer.co.uk

1 February 2020 | The Grocer | 11

analysis petfood

How a buyout flurry could consolidate petfood challengers Small brands have capitalised on a radical shift – and the 2020s may see them going global Alec Mattinson

ity dealmakers are predicting a flurry of buyouts of fast-growing petfood brands as the market’s challenger brands continue their march to the mainstream. Consumer M&A specialists suggest at least five petfood and treating specialists are set to come to market in 2020 – generating huge interest among buyout funds and the sector’s established players. Premium-end suppliers Lily’s Kitchen and Forthglade are both reported to be working with corporate finance house Houlihan Lokey exploring sale options, while MPM Products – maker of Applaws and Encore – is working with Harris Williams, with a sale expected this year. Other players tipped to come to market this year include pet

treat specialist and Good Boy owner Armitage Pet Care and Wagg and Harringtons owner Inspired Pet Nutrition. So what’s driving the rush of sales, and could consolidation be on the cards? All these petfood suppliers received private equity cash injections between three and five years ago. The natural lifecycle of a PE owner would dictate there will be exits in the relatively near future, particularly as the general election result and relative stability around Brexit is tipped to unblock the wider M&A market. But the petfood sector also shares characteristics with other hot M&A categories, such as healthy snacking, craft booze, free-from and plantbased goods. While the pet sector has traditionally been dominated

UK petfood private equity buyout pipeline ● Butternut Box: DTC business raised another £15m in 2019 (£21m in total) after its 2016 launch. ● Partner in Pet Food: UK PE house Cinven acquired the Hungarian petfood manufacturer in 2018 ● Armitage Pet Care: Good Boy treats brand and pet accessories firm was

bought by Rutland Partners in 2017 ● Pet Food UK: Barking Heads and Meowing Heads brands bought by Piper for £5m in 2017 ● MPM: Natural petfood maker bought by ECI in 2016 ● Forthglade: Premium wet food brand received £6m funding from Piper in 2015

12 | The Grocer | 1 February 2020

● Lily’s Kitchen: Branded natural cat and dogfood supplier received “several million” investment from US private equity firm Catterton in 2015 ● Inspired Pet Nutrition: Catterton invested an undisclosed sum in the Wagg and Harringtons owner in 2015

by multinational, high-volume suppliers, the increasing humanisation of pets has left a gap for insurgents focused on wellbeing, nutritional benefits and high-quality ingredients. The overall pet sector has proved to be one of the more recession-proof categories in fmcg, but it is experiencing a radical underlying shift. At the top of the market there are some sobering statistics. In a market dominated globally by Nestlé Purina and Mars, four of the top five brands are losing sales year on year. Pedigree, Whiskas and Gourmet shed a whopping £18.6m of sales between them [Nielsen 52 w/e 7 September 2019]. Meanwhile, pet ownership levels have been relatively stable. What growth there has been in the market has been driven by newer and smaller players focused on treating and higher-end offerings. One challenger petfood brand exec notes: “The large multinationals have struggled to adapt and show flexibility as they may be configured with the wrong packaging, the wrong formats or high margin thresholds.” Petfood is also far less reliant on traditional grocery retail than most fmcg categories. While other categories squabble over supermarket shelf space, the petfood sector benefits from a strong specialist pet retail sector, including Pets at Home and Pets Corner, which are able to stock a much wider range of

“The large multinationals have struggled to adapt” brands and products. The sale of goods directly through veterinary practices also opens a further route to market, while the petfood sector is ideally suited to direct to consumer (DTC) possibilities. Predictable ordering patterns and long shelf lives make petfood ideal for bulk buys, and a number of fast-growing companies, such as Butternut Box and Tails.com, are completely DTC. The big boys have clearly taken notice, evidenced by Nestlé’s 2018 acquisition of a majority stake in Tails.com for a rumoured £100m. Get the full story at thegrocer.co.uk

Could these giants hoover more of these on-trend brands to reinvigorate their portfolio with growth assets? One dealmaker suggests the sector’s many different routes to market mean a roll-up of brands is a real possibility. “A lot of these non-supermarket players want brands and products that aren’t available in the main grocers,” he says. “So you can have a multiple brand strategy.” However, another suggests the sheer scale of Mars and Nestlé’s presence in the sector – where they boast a 45% share of a £60bn global market – means brands playing in geographic and category niches are unlikely to thrive. The assets coming up for sale are considerable. IPN’s most recent accounts show sales of £91m, MPM’s £63m, Armitage’s £37m and Lily’s £31m. But Get the full story at thegrocer.co.uk

their profiles and double-digit growth still make them more suitable for PE buyers. International focus The next challenge for a number of these brands will be to prove they can scale up their businesses to work outside the UK. MPM already has a strong international focus, while Lily’s has doubled its international business in 2019. Lily’s Kitchen CEO David Milner declines to comment on “specific market speculation”, but says: “Whether it’s Japan, the Middle East or mainland Europe, people are waking up to the value of feeding their pets proper food made with natural ingredients.” The City source says: “You could see a generational shift here where these companies shift into the next level

of market funds.” He suggests assets held by SME specialists such as Rutland and Piper could interest larger PE players such as Bridgepoint, 3I and Inflextion, who have experience of taking national brands to international markets. A larger PE buyer could also be ideally positioned to consolidate the premium sector. “Putting these businesses together to create something of scale makes sense,” he says. “Having different brands for different occasions and specialities is always going to be something that appeals to the larger players.” Notably, most of those brands tipped for sale have an outsourced manufacturing model, meaning there are obvious economies of scale benefits by combining brands and sourcing higher volumes.

However, one senior petfood source argues that the need for consolidation could be overplayed given the continued global domination of the big two. “The global market is £60bn – you still only need to take enough share to scratch the surface of that to build a company of significant scale.” While there remains plenty of headroom to grow in the UK given the declining sales of the former super-brands, fundamentally petfood is a global product and the same trends driving growth in the sector in the UK are growing across Europe and beyond. Whether a PE house makes a consolidation play – or the trade giants decide ‘if you can’t beat them, buy them’ – it’s safe to assume UK petfood is going global and 2020’s deals will be the catalyst. 1 February 2020 | The Grocer | 13

analysis nestlé

Will Nestlé’s £1.6bn plastics pledge change the game? The Swiss giant wants a circular economy of recycled plastics Daniel Selwood

estlé has ramped up its investment in sustainable packaging by a whopping figure. Earlier this month, it announced a CHF 2bn (£1.58bn) investment “to lead the shift from virgin plastics to food-safe recycled plastic and accelerate the development of innovative sustainable packaging solutions”. So, what are the plans? And what difference will they make? The majority of the outlay will be on sourcing up to two million tonnes of food-grade recycled plastic, working with third parties “to advance the circular economy and endeavour to clean up plastic waste from oceans, lakes and rivers”. More than CHF 1.5bn (£1.19bn) will be allocated to “pay a premium” for such materials between now and 2025. This will create a marketplace for food-grade recycled plastics, Nestlé claims. It also intends to reduce its own use of virgin plastics by one third by 2025. This builds on Nestlé’s 2018 commitment to make 100% of its packaging recyclable or reusable by 2025 (work that this week saw the UK rollout of Nesquik All Natural in recyclable paper). Sander Defruyt, new plastics economy lead at the Ellen MacArthur Foundation, believes the supplier’s investment marks a “critical step towards… decoupling plastic use from finite resources”. All food suppliers “face a challenge when it comes to replacing virgin plastic packaging with recycled alternatives, as not all recycled plastics are safe to use alongside food” he 14 | The Grocer | 1 February 2020

Researchers at the Nestlé Institute of Packaging Sciences in Lausanne, Switzerland

says. “Nestlé’s investment in food-grade recycled plastics could help to drive innovation in this area and develop a market that – with the exception of rPET – is currently very small.” The need for such innovation was highlighted by circular economy specialist Axion’s 2018 warning that “technology and infrastructure is not currently available to produce food-grade recycled polypropylene food packaging from post-consumer household packaging”. Nestlé’s efforts to create a greater market for food-grade recycled plastics will be welcomed by other suppliers, suggests the British Plastics Federation. “Businesses are increasingly looking at ways to incorporate recycled content into their packaging,” says a spokesman. “The inclusion of recycled materials in plastic

packaging often provides the benefit of resource efficiency and, therefore, carbon savings.” Scepticism But sceptics include Break Free From Plastic. The sustainability movement’s European coordinator Delphine Lévi Alvarès says Nestlé must go further by investing in “ending the reliance on single-use packaging and focusing on toxic-free reusable products and systems”. It also needs to phase out “hazardous chemicals, including those identified as endocrine disruptors, from their products at the design stage” she adds. Greenpeace also says Nestlé’s priorities are wrong. It should focus on innovation, not recycling, says senior Greenpeace campaigner Matthias Wüthrich. “Reducing single-use plastic should not mean that Nestlé

turns to false solutions such as recycled content and material substitution.” Nonetheless, recycled plastic will enjoy the lion’s share of Nestlé’s £1.58bn spend – though £198m will be put aside for a venture fund to invest in startups that focus on sustainable packaging through new materials, refill systems and recycling solutions. This will run alongside work at its Institute of Packaging Sciences in Lausanne, Switzerland. But efforts must focus on realistic solutions, argues Recycling Association CEO Simon Ellin. “I would warn against trying to reinvent the wheel by creating new materials that are hard to recycle. Focus should be on smart design using single materials that are easy to recycle.” Could it be the best solution will also be the simplest? Get the full story at thegrocer.co.uk

analysis commodity prices

Coronavirus likely to drag wheat prices Harry Holmes

he outbreak of coronavirus in China looks set to pull down wheat prices after bad weather across Europe had forced the market higher. Flooding in the UK and France at the end of last year contributed to wheat prices rallying by 24% since September. But the discovery of coronavirus in Wuhan in December caused wheat and other commodities to quickly lose ground. The virus is expected to knock more than 1% off China’s GDP and the effects are expected to ripple out across the global economy. “There is a lot of uncertainty surrounding the global level of demand,” says James Webster, senior analyst for AHDB Market Intelligence. “Demand is easing back from China but the full extent won’t be fully factored in yet.” China was expected to increase wheat imports following the signing of the phase 1 trade deal with the US on 16 January. It commits China to purchasing more wheat from US producers, though a clause

prices digest ● Environment: A “far-

reaching” Environment Bill has been introduced to parliament this week. The bill promises to stop exports of plastic waste to developing countries as well as “boost” the UK’s recycling system. The government claimed the legislation will “go beyond the EU’s level of ambition” on environmental policy.

● Chick culling: France has

China was expected to increase wheat imports, but demand is set to fall

stipulates this is dependent on “market conditions”. But demand will likely now fall following the introduction of quarantine measures in multiple Chinese cities to try and limit the impact of the virus. It is a sharp market adjustment after bad weather across western Europe forced wheat prices to surge at the end of 2019. Farmers were unable to plant significant areas of crop, with the available planting area for wheat falling to a 19-year

low, according to Carlos Mera, senior analyst at Rabobank. In Ukraine, meanwhile, dry weather is continuing to prevent a snow cover that is normally relied upon to insulate the crop. “If it turns cold now without the snow that could be a problem for Ukraine although we won’t know the full effect until spring when the crop emerges,” says Mera. “Temperatures are currently relatively high so it is not too bad, but things could quickly change.”

said it will stop the practice of “live-shredding” male chicks and castrating piglets without anaesthesia. The French government indicated a ban would come into force next year, which would make it one of the first countries to halt the mass culling of chicks. However, there are fears that a ban could be postponed until a method is found of determining the sex of chicks at the embryo phase.

● Bird flu: The EU Commission has halted imports of poultry from Ukraine after a confirmed outbreak of bird flu in the country. Cases were also confirmed in central and eastern areas of Europe in mid-January, but bans were not implemented.

commodity prices: Thailand droughts push up price of rice Rice prices have been driven up significantly month on month due to supply concerns brought about by major droughts in Thailand. Further price hikes have been stimulated by some mills holding onto their stocks and refusing to sell. Prices for maize in the EU rose in January thanks to a boosted global maize market. Brazilian prices have driven the growth, off the back of increased exports and strong domestic demand. Tightened supplies and

16 | The Grocer | 1 February 2020

significant demand have seen palm oil prices go up sharply since November 2019. The implementation of new biodiesel mandates, which have seen the percentage of palm methyl ester required for use in biodiesel rise to 20%, have pushed Indonesian and Malaysian fuel firms into requiring more of the oil. Commodity and Wholesale prices data supplied by Mintec. Mintec is the principal independent source of information for commodities and raw materials. Mintec monitors the key factors that are vital for efficient procurement and provides sophisticated tools for analysing and interpreting market information. www.mintecglobal.com

WINNERS & LOSERS

CURRENCY

CHANGE

price per tonne m-o-m %

PRICE

y-o-y %

Key climbers Cocoa butter (UK) White rice (Thailand) Cocoa bean (Ldn) (ICE) Aluminium (LME) Maize (Euronext Paris)

GBP 5,152 USD 455 GBP 1,882.1 USD 1,410 EUR 177.6

13.8 7.8 7.7 6.4 1.5

10.4 13.2 15.1 –4.7 –1.1

–19.7 –13.3 –10.6 –5.9 –3.1

–54.4 4 –4.5 34.7 16.2

Key fallers Gas (UK) GBP Coffee arbc (US) (ICE) US cent Crude oil (EU) (ICE) USD Palm oil (Rotterdam) USD Sunflwr oil (NW Europe) USD

26.6 119.4 59 778.3 823.3

Source: Mintec. Note: All prices are indicative only and are representative within the country quoted

Get the full story at thegrocer.co.uk

analysis retail & wholesale prices

PLATINUM MEMBERS GET MORE! Track annual grocery inflation since 2008 by retailer, by category, and by retailer AND category, at thegrocer.co.uk/GPI

Valentine’s fizz is pricier as average shelf prices edge up Daniel Selwood

rits planning to toast their loved ones on Valentine’s Day and Mother’s Day face paying more for their bubbly in the mults. The average shelf price of champagne and sparkling wine SKUs is up 22p year on year across Asda, Morrisons, Sainsbury’s, Tesco and Waitrose – an increase of 1% [Edge by Ascential 52 w/e 29 January 2020]. Price rises have hit more than 40 SKUs. Waitrose is responsible for the greatest average increase of 92p. Over the past 52 weeks, it has raised the price of several 750ml bottles. Veuve Clicquot La Grande Dame Champagne 2006 is up from £130 to £140, while Louis Roederer Cristal Brut Champagne is £15 pricer at £195. Waitrose has also raised the price of Moët & Chandon Ice Imperial Champagne by £4.99 to £49.99 and own-label Blanc De Noirs Champagne from £22.99 to £23.99. Elsewhere in the big supermarkets, Tesco has increased the price of six own-label SKUs,

Average champagne and sparkling wine prices are up 22p year on year

with 750ml bottles of Premium Blanc de Blancs and Premium Cremant de Limoux Rose Sparkling both up by £1 to £26 and £12 respectively. Asda has seen the most raises. Around 20 champagne and sparkling wines are dearer in the grocer – from 750ml Extra Special Premium Asti Sparkling Wine (up £1 to £7) to Bollinger Rosé Champagne Brut (now £50 from £48). Bucking the pricing trend, Sainsbury’s average shelf

price across fizz is down by 2p. However, it has upped the cost of a small number of SKUs, including 750ml bottles of Freixenet Cordon Negro Extra Dry Cava and Freixenet Cordon Negro Rosado Brut de Noirs. They recently increased to £11 from £10 a year ago – but are currently on promotion at £7.50. “The cost of individual products is determined by a number of factors and prices can fluctuate, both up and down, as a consequence,” says a Sainsbury’s

spokesman. “We remain committed to providing our customers with great quality and value every time they shop with us.” A spokeswoman for Freixenet says in spite of the brand being subject to some price increases in grocery, “the majority of our SKUs have either maintained their average price or decreased year on year”. Price increases in the mults for fizz come “as no surprise” claims Miles Beale, CEO of the Wine & Spirit Trade Association. “A typical sparkling wine is hit by the highest level of duty per unit of any alcohol, with £2.86 plus VAT going to the taxman every time you buy a bottle of fizz – almost a third higher than still wine duty,” he says. But in spite of the price rises, Speciality Drinks buyer Dawn Davies believes posher bubbly may still be able to cash in. “People seem to be happy to pay a bit more – but for quality, and are not buying volume in the same way as they were before,” she says. “So, there is an opportunity in the premium sector of the market to capitalise.”

wholesale prices: Spanish flooding sees UK lettuce prices rocket Flooding caused by Storm Gloria in southern Spain has seen the price of lettuce in the UK skyrocket. The poor weather has also destroyed crops such as cauliflower, broccoli and artichokes in coastal areas between Barcelona and Murcia. Orange production in Spanish regions has fallen, causing prices to go up. Regions such as Seville have seen their output tumble 11% this season, pushing prices up significantly. Drier weather in the UK after Get the full story at thegrocer.co.uk

a wet spell has allowed potato growers to progress with lifting their crop. However, due to questions over the quality of the remaining harvest, prices are up month on month. Unusually high demand for bananas from countries like Russia, China, Algeria, Libya and Turkey has caused a decline in Ecuadorian exports of the fruit to the EU. Approximately 14% fewer bananas were exported to the EU last year, which has maintained prices.

CURRENCY

PRICES

Fruit & veg

Iceberg lettuce (UK) Oranges (Spain) Green peppers (UK) Tomatoes (UK) Pears (UK) Apples (UK) Potatoes (UK) Carrots (UK) Bananas (UK) Onions (UK)

PRICE CHANGE CHANGE £/tonne

m-o-m %

y-o-y %

GBP 0.9 EUR 640 GBP 1,600 GBP 1,666.7 GBP 600 GBP 950 GBP 181.2 GBP 380 GBC 600 GBP 500

33.8 3.2 –5.9 49.3 –21.1 18.8 2.5 –2.6 17.6 13.6

37.9 30.6 8.1 7.5 7.1 6.7 –7.6 –22.4 –26.8 –35.1

Source: Mintec Info: All prices are indicative only and are representative within the country quoted

1 February 2020 | The Grocer | 17

analysis the grocer 33

GOLD MEMBERS GET MORE! Read itemised service score breakdowns and full mystery shopper comments from each store visit at thegrocer.co.uk/grocer-33

mystery shopper

Friendly staff win it for Waitrose Edward Devlin

aitrose took the win in a low-scoring week for this Friday afternoon shop, with no supermarkets managing a full basket. The winning store in Wilmslow was “tidy and wellpresented”. Our mystery shopper said the counters were well-stocked and neatly displayed. The experience at the checkout was the highlight of the visit, with the friendly assistant making him feel “valued and welcome”. Sainsbury’s in Oadby had the best availability score of the week, with only one product not stocked. However, our shopper’s first impression was the store was “fairly average” and staff didn’t go the extra mile of escorting her to find items. Availability dragged down the score for Tesco in Liverpool, with two lines out of stock and four not stocked. But the shopping trip was “simple and easy” in the “light, bright and spacious” store, thanks to a logical layout and good signage. Our mystery shopper in Woking was surprised by how limited the stock was in Asda, with 13 not-stocked items and one out of stock. She was advised the much larger Asda down the road stocked some of the missing lines. Morrisons in Acton limped home with a score of just 36, registering low marks across the board and only two points for shop floor service. Our shopper found staff to be unfriendly, unhelpful and unavailable, having to search the shop for help. Her experience at the checkout was the worst she had ever had at a supermarket, with a wait of more than 10 minutes to be served and long queues causing obstructions.

Get the full story at thegrocer.co.uk

store of the week Winner: Waitrose Wilmslow Store manager: Andrew Cartwright Opened: 2006 Size: 22,600 sq ft Market share: 15.5% Nearest rivals: Lidl – 1.2 miles Morrisons – 1.7 miles Sainsbury’s – 2.2 miles Store data source: Analysis by CACI. Call the market planning group on 020 7602 6000

What separates Waitrose from other supermarkets? You have more autonomy, responsibility and ownership. You can put your own slant on group initiatives. There is no one branch of Waitrose that is the same. And the Wilmslow branch is known for its availability and service. How do you deliver top service? I’ve been in retail for 30 years and it has always been about

service. I instil in my managers and staff that every customer is different and to deal with each of them with that in mind. How do you stay on top of availability? The filling is all done on nights and that allows the day shift to focus on stock accuracy. If your warehouse is in good order then you can manage availability far better. How is online growth in the region? The focus coming into this year was to make sure we are set up properly. We had a great Christmas, with most branches in double-digit growth – if not 20% in a number of cases, especially in the north. The business is now looking at investment in those branches to ask ‘what can we do to drive that growth even further?’. Food waste is still rising in retail. What is being done on this? We work with FareShare to deal with any waste products

at the end of the night. Wastage in most branches, and definitely here, has reduced dramatically. And because we have got stock management right it controls wastage far better. How has Veganuary played into January sales? We are seeing a 60%-70% increase year on year for vegan products. It has just gone through the roof. We have extended the shelf space for the category and the range because it is what the customers want. Sharon White officially starts as chairman next week. How has the management restructure been felt at store level? Sharon coming in is going to bring a different outlook for the business. And a more combined pan-partnership with John Lewis is only going to make the brand even better. Andrew Cartwright was talking to Edward Devlin WINNER

WEEK 31: FRIDAY 24 JANUARY 2020, 1PM-3PM

SERVICE & AVAILABILITY

Car park score (out of 10) Store standards score (20) Store layout (10) Shop floor service (20) Checkout score (20) Availability score (20) TOTAL (100)

Out of stock/not stocked Availability

Tesco

Waitrose

Woking, Surrey

Asda

Morrisons Sainsbury’s Acton, London

Oadby, Leicester

Liverpool

Wilmslow, Cheshire

9 9 4 12 16 0 50 1/13 95.0%

9 5 6 2 11 3 36 1/6 96.3%

6 13 8 11 11 18 67 0/1 100%

10 13 9 12 17 2 63 2/4 93.1%

10 12 8 15 16 13 74 1/1 96.9%

1 February 2020 | The Grocer | 19

analysis the grocer 33

Deep discounts help Tesco to first win of G33 year

Price & Promo History Average price Kellogg’s Coco Pops, 720g PRICE

£3.98

£3.41 CHANGE YOY

–10p

£2.80

CHANGE YOY

–2.9%

52 W/E 24 JANUARY 2020

Asda Kellogg’s Coco Pops, 720g £3.99

Average: £3.28 YoY: –17p (–5.0%) Weeks on offer: 29

£2.50 52 W/E 24 JANUARY 2020

Morrisons Kellogg’s Coco Pops, 720g £4.00

First and second-placed Tesco and Sainsbury’s sold the Malibu for £12

Ronan Hegarty t has taken seven months, but Tesco has finally picked up its first pricing win of the current Grocer 33 year. Tesco’s £72.63 total was £1.88 cheaper than runnerup Sainsbury’s, which in turn pushed serial winner Asda down into third place. Tesco’s win was its first since January last year. The UK’s biggest supermarket introduced hundreds of price cuts this January, but this win looks to have been the result of a couple of particularly deep discounts rather than a shift in its overall pricing. Tesco offered the lowest price for 12 lines and was exclusively cheapest on four. These were the Belvita breakfast biscuits, Coco Pops, macaroni and New York Bakery Co bagels. Its deals on the Coco Pops, down to £2.50 from £4, and the Malibu, reduced from £15 to £12, made the biggest difference this week. Sainsbury’s was cheapest

for nine lines and exclusively so on three of these – the Bendicks biscuits, feta cheese and McDougalls flour. However it, like Tesco, was offering £3 off on the Malibu at £12. Asda, Morrisons and Waitrose were all selling it for £15. At £75.24, Asda came in £2.61 more expensive than Tesco. This was despite the Walmartowned retailer offering the lowest price on 19 lines and coming in exclusively cheapest for 12. Morrisons had more products on promotion than its rivals, with 11 deals. Asda and Tesco carried eight each, while Sainsbury’s and Waitrose both had seven. Despite the deals, Morrisons came in over a fiver more expensive than Tesco at £78.02. It was exclusively cheapest for the Alfa One oil, Cheestrings and Young’s Scampi. Waitrose was £11.01 more expensive than Tesco. It offered the lowest price for just two products: neither were exclusively cheapest.

The Grocer 33 was conducted in association with Edge by Ascential. Trusted by major FMCG manufacturers and retailers, Edge by Ascential (formerly Brand View) is the UK’s largest provider of real-time price and promotion tracking and analysis. Learn more and sign up for a 14-day free evaluation at www.ascentialedge.com. Tel: 0844 357 9970 Email: Sales@brandview.com

20 | The Grocer | 1 February 2020

Average: £3.34 YoY: 1p (0.2%) Weeks on offer: 34

£2.50 52 W/E 24 JANUARY 2020

Sainsbury’s Kellogg’s Coco Pops, 720g £4.00

Average: £3.28 YoY: –32p (–8.9%) Weeks on offer: 16

£2.50 52 W/E 24 JANUARY 2020

Tesco Kellogg’s Coco Pops, 720g £4.00 Average: £3.48 YoY: 3p (0.8%) Weeks on offer: 33

£2.50 52 W/E 24 JANUARY 2020

Waitrose Kellogg’s Coco Pops, 720g £3.89 Average: £3.67 YoY: –6p (–1.5%) Weeks on offer: 16

£3.00 52 W/E 24 JANUARY 2020

SEE PRICE HISTORY FOR ALL 33 ITEMS Gold members can view current and historic price and promo details for all 33 products, plus meta-analysis of promo mechanics, cashback and cheapest products at thegrocer.co.uk/stores/the-grocer-33/prices

Get the full story at thegrocer.co.uk

1.10 2.25

∙

-2

WANT TO KNOW THE DEAL IN DETAIL? View precise promotion mechanic details by scrolling over the red dot on our enhanced online version of the Grocer 33 at thegrocer.co.uk/stores/ the-grocer-33. You can also view full price and promo history, as per the example left, for all 33 items, as well as other analytics, using the widget WINNER

WEEK 31

SHOPPING BASKET

Alfa One Rice Bran Oil 500ml

Belvita biscuits Blueberry & Flaxseeds 270g

Bendicks Mint Chocolate

Asda

Morrisons

Sainsbury’s

Tesco

Waitrose

PRICE P MoM YoY

PRICE

2.00

1.85

2.50

2.00

2.10

2.09

2.89

2.50

2.79

2.34

-26

-4

4.80

121

-29

2.60

-7

2.35

-40

Cif floor cleaner

-3

1.75

-17

Regular, one-litre

Compeed blister plasters Medium, five-pack

Easy peelers Own-label, sweet, 600g (500g-600g)

Fish pie Own-label, 450g (400g-450g)

Garlic Own-label, organic, three-pack (two to three-pack)

Genius bread Brown, 535g

1.53

1.50

-3

1.45

1.49

1.27

4.10

4.00

-8

4.15

4.03

1.35

-3

1.87

1.41

2.81

∙ -16 3.09 ∙ 0

∙ 2.50 ∙

2.71

-13

0.98

1.00

0.90

1.05

0.91

-1

2.50

2.60

-11

2.90

-3

2.50

-7

2.55

-5

2.61

-5

1.05

-3

1.60

0.80

∙ -20

-10

1.20

-14

1.45

1.22

-4

-5

3.75

-25

3.75

-19

3.85

-8

3.77

-17

∙ -25 1.25 ∙ 25

-23

∙ 2.50 ∙

2.50

2.55

2.31

-5

-3

1.25

-1

1.35

1.25

1.27

3.99

-17

4.00

3.00

-32

2.50

3.89

-5

3.48

-10

0.65

∙ 0.60 ∙

0.60

-3

0.55

0.89

0.66

12.00

13.80

125

-9

2.39

Uncle Ben’s Express Rice Basmati, 250g

Yeo Valley kefir Natural, organic, 350g

Young’s scampi 220g

TOTAL (£)

On promo (details online)

3.75

-24 15.00

2.50

2.00

0.55

1.25

∙ 16

∙ 1.00 ∙

1.10

1.67

-5

-13

0.70

0.60

-2

-25

1.50

1.20

1.10

-1

1.10

1.70

-4

1.20

-9

1.50

0 0

-6

1.40

1.93

2.67

2.30

2.00

-4

2.00

-3

2.00

-2

∙ 5 1.45 ∙ 0 1.00 ∙ -47 1.00 ∙ -50 3.25 ∙ 49 78.02

801 11.9

6 2

∙ -40

∙ -150

0.55

1.67

0.55

-34 -0.5

394 5.3

6 5

∙ -184

∙

2.85

1.20

∙

1.35

∙ 97 2.00 ∙ -27

∙ 1.60 ∙ 1.50 ∙

Inflation/deflation on total (pence) Inflation/deflation on total (%) Price-only promotions Multibuy promotions Key:

-2

∙ 500

∙ 5 1.58 ∙ -3 1.69 ∙ 69 0.98 ∙ -52 3.00 ∙ 42 75.24

Own-label, 350g

1.00

15.00

0.50

Own-label, 200g (100g-120g)

Tomato & mascarpone sauce

5.00

0.60

Own-label, orgainc, 2kg (1.5kg-2kg) Brown, 200g

5.00

-12

Potatoes

Spring onion bunch

4.00

∙ -16 4.00 ∙ 47 1.50 ∙ 2.81 ∙ 0

In juice, 400g

Schär ciabatta rolls

3.75

Own-label, whole, fresh, four-pints

Own-label, each

-46

Nature’s Finest peach slices

Papaya

2.00

Milk

Red Onion & Chive, five-pack

2.10

1.95

-3

Own-label, fine cut, 454g

New York Bakery Co bagels

-80

-26

Marmalade 1.1kg

2.00

Own-label, 500g

McDougalls Plain Flour

-8

-6

720g

Large, 189g

∙ 150 2.00 ∙ -75

Macaroni pasta With coconut, 700ml

2.75

2.20

Kellogg’s Coco Pops

Maltesers pouch

∙ 2.75 ∙

1.39

-3

1.50

Malibu Caribbean rum

MoM YoY

∙ -115 0.90 ∙ -10 3.90 ∙ 40 1.00 ∙ 2.36 ∙ 0

Vegetable Fusion, 20x15g

500g

∙ -140 5.00 ∙ 110

2.15

-8

Own-label, 200g

Jus-Rol puff pastry block

Itsu gyoza Mediterranean Style, 220g

1.80

Greek feta cheese

John West Light Tuna Salad

200 -12

1.00

Ocean, 100ml

Coca-Cola

-24

Original, 8x20g Own-label, 1kg (1kg-1.5kg)

2.75

Cheestrings cheddar Chicken thighs

∙

∙ 2.75 ∙ 2.14 ∙

5.00

Dark Chocolate, 200g

-3

Average

∙ -25

∙

-49 12.00

-13 15.00

∙ -52

∙

∙ 194

2.60

0.80

0.64

-3

1.20

1.23

-4

1.10

1.15

1.11

1.70

-2

1.69

-1

1.00

-3

1.60

1.32

-14

-1

1.60

2.20

1.64

2.00

-4

2.35

∙ -78

2.25

-16

∙ -31

∙

-8

2.00

2.05

2.01

-3

0.60

-3

0.60

0.57

1.45

-1

1.45

1.55

1.50

-1

∙ -20 1.00 ∙ -50 2.00 ∙ -81 74.51

∙ 1.69 ∙

1.00

-5

1.28

-4

-5

1.50

1.49

1.19

-30

∙ 21 72.63

∙ -65 83.64

-1

2.62

-7

138 1.9

-15 -0.2

312 4

-6 0

28 x

1.00

57 0.8

-18 -0.2

7 0

2.50

-86 -1.1

6 2

∙ -55 0

2.35

243 3.0

5 2

76.81 48 0.6

6 2

Off promo (details online) ■ Out-of-stock ■ Not stocked

Get the full story at thegrocer.co.uk

1 February 2020 | The Grocer | 21

comment & opinion the saturday essay

Take the lead on LGBT equality Kate Williams

GBT people exist in every community and society. We are your customers and your staff. Over the past few decades, we’ve seen some incredible progress towards equality for lesbian, gay, bi and trans people. So much so, that some people might think: ‘job done’! Unfortunately, that’s not the case. Stonewall research reveals that more than a third of LGBT staff have hidden who they are at work for fear of discrimination, while one in five have been the target of negative comments from colleagues or customers. Businesses like supermarkets can be at the forefront of driving equality in society, creating spaces where customers, employees and the wider LGBT community can be accepted. This year, Sainsbury’s is the only supermarket to claim a place in the UK’s

top 100 LGBT-inclusive employers list, at number 71. At such an intensely competitive time for UK grocery, there’s a huge business opportunity for grocers to set themselves apart. Having an open and diverse working environment leads to higher levels of motivation, creativity, and productivity. What grocer wouldn’t want this? It’s good for employees, the business, and customers. Whether you’re in the head office or the manager of a store, there’s always more you can do to be more LGBT-inclusive. One easy way to improve the workplace for LGBT employees and consumers is to show visible support for community events. Whether it’s Pride, Trans Day of Visibility, LGBT History Month, or Bi Visibility Day, it can be incredibly powerful to see supermarkets coming out for LGBT events. Not only are they a chance for you to highlight LGBT role models in your business, but you also get to

send out a clear message that you value diversity and inclusion. Supermarkets can also update HR systems to offer gender-neutral pronouns like Mx and provide gender-neutral facilities. As part of basic training for staff, they can also outline zero-tolerance policies on homophobic, biphobic and transphobic bully-

“More than a third of LGBT staff have hidden who they are at work” ing, as well as developing policies to help employees feel confident in identifying and reporting such incidents. Just think how much this could help a trans customer who faces uncertainty and fear of discrimination each time they want to use a bathroom. The best way to make change is to ask those directly affected.

Listen to the needs of your LGBT employees and address the challenges they face. This means creating safe spaces for staff to come together, discuss issues and offer potential solutions. Leaders in the business should also be involved and engaged in conversation with groups like LGBT staff networks. One way to do this is to introduce reverse mentoring schemes, where junior LGBT staff can speak and mentor senior leaders. Not only does this help increase understanding of the issues happening, it also gives LGBT staff an invaluable career development opportunity. We spend most of our lives at work and plenty of time in supermarkets, so inclusion here would make a world of difference to many people. So let’s make 2020 the year all supermarkets come out for LGBT equality and embed inclusion year-round. Kate Williams is head of private sector memberships at Stonewall

third party

The benefits of blockchain Matthew Suter

owards the end of last year, Tesco hit headlines due to concerns that its own-brand honey may have been adulterated with cheap syrups. This incident sent the issue of how food products can be authenticated to the top of many retailers’ agendas. However, technology may offer a solution to the provenance problem. Blockchain is a decentralised record-keeping technology that stores data, such as a product’s origin, in a verifiable 22 | The Grocer | 1 February 2020

and permanent way. Currently, there isn’t clear legislation on using blockchain in fmcg, but this doesn’t mean organisations should rule it out. However, there are a number of factors that are vital to address in order to protect against sticky issues down the line. The implementation of blockchain presents a double-edged sword. While the immutable nature of the data on a blockchain gives it an advantage over traditional technologies, this places it directly in conflict with GDPR and the ‘right to be forgotten’. This could be mitigated by using a private permissioned

blockchain – which restricts who can participate in the transactions – and implementing a governance framework to manage the data handling. Jurisdiction is another tricky area as blockchain solutions – especially ones used in supply chains – can cover multiple jurisdictions and the decentralised nature of blockchain can make it difficult to establish which laws apply. Beyond these issues, there are also practical and contractual considerations. Different terms must be clearly agreed with all parties – such as who has permission to update and access the

blockchain; costs distribution; and who will be liable if something goes wrong. Establishing and agreeing these points clearly, and in writing, is vital. As technology continues to evolve, there will inevitably be some grey areas as the industry catches up. However, blockchains’ benefits for retailers are plentiful, particularly in the fight against counterfeit goods. So, don’t let the lack of legislation stop you – but before you jump in the deep end, make sure your contract is watertight. Matthew Suter is a solicitor at DWF Get the full story at thegrocer.co.uk

second opinion

Be savvy with GSCOP David Sables

t would be wrong to say the Groceries Supply Code of Practice has grey areas: it is totally grey. But while this vagueness might put suppliers off from raising complaints, it allows the Adjudicator to be more flexible when applying the code. Last week, I called Christine Tacon to get some clarity on “reasonable notice” – one infuriating term that confounds suppliers looking for protection in GSCOP. Following our discussion, I’ve decided to widen this column out to cover three practical learnings from the recent Co-op investigation. I hope these motivate you to engage more, especially as 70% of cases raised come down on the side of the supplier. Firstly, 44% of all issues raised relate to delistings, so you’re probably aware that GSCOP requires retailers to justify

delisting decisions when challenged. But did you know ‘delist’ in this context includes ‘significant volume reduction’? So you could challenge a cut in distribution from 2,000 stores to 1,000 stores, for instance. For many, that cut would mean business as usual, but for others it may affect the viability of a production line.

“It would be wrong to say GSCOP has grey areas: it is totally grey” So challenge store cutbacks, not just delisting decisions. Secondly, be aware that outside the trading team, retailers are not obliged to train their people on the code. So, if a logistics department imposes a fine, or a new product benchmarking cost gets pushed your way, the buyer may not even be aware of it, but

higgins

Get the full story at thegrocer.co.uk

it still breaks the code. Report it. Thirdly, yes, it’s ‘reasonable notice’. This will be decided on a case-by-case basis by the retailer. ‘Reasonable’ could mean one year – or it could be two weeks. It also includes time to conduct an interview and review. Disgruntled suppliers normally set their insights team the challenge of turning around a decision – but by the time they pull together the data and finally get a meeting, it is too late. In some cases, reviews highlight a retailer analysis error and the decision is reversed. So, raise it quickly if you disagree with the notice. That’s three good reasons to review any apathy towards GSCOP. Now for the small print: these could be new ways to influence people, but may not be a great way to make friends. So, as always with GSCOP, be savvy and pick your battles. David Sables is CEO of Sentinel Management Consultants

CRITICAL EYE George Nott

ontestants pick ingredients from an edible set and create “wacky” dishes to be judged by a panel of “world renowned food gods”. That’s the premise of Heston Blumenthal’s camp new show Crazy Delicious (Channel 4, 28 January, 8pm) which this week saw three hopefuls put their imaginations to work on the apple, spag bol and brunch. The set looks like the Garden of Eden, albeit one you can eat. Cool, though surely the prosecco waterfall would be warm and flat under studio lights? Continuing the gods theme, the judges – Blumenthal, Swedish restaurateur Niklas Ekstedt and US TV chef Carla Hall – look down on the kitchen from a cloud, clad all in white. Sometimes the ‘twists’ were interesting – like contestant Elainea’s use of black pudding within a sweet apple treat. Sometimes they weren’t – like Harry’s fairly large multicoloured ravioli. Blumenthal was guilty of phoning it in. “You’ve certainly exploited the apple in a great way,” he droned. And while Ekstedt and Hall lifted the energy as best they could, host Jayde Adams was no match for Nailed It’s Nicole Byer. Perhaps Heston’s lethargy could be explained by his awareness of the show’s big issue – we’re all used to crazy foodie creations by now. Blumenthal lines like vanilla mayonnaise and teasoaked salmon first appeared in Waitrose a decade ago. Plant-based produce made to look like cuts of meat are mainstream. It’s going to take more than a big ravioli to wow us now. 1 February 2020 | The Grocer | 23

comment & opinion talking shop

to contact us... e-mail: name.surname@thegrocer.co.uk tel: 01293 610 +(3 Digit Extension) letters: letters@thegrocer.co.uk

How Tesco stays on top

editorial Editor Adam Leyland 263 Managing editor Carina Perkins 240

news desk

News editor Ronan Hegarty 406 Deputy news editor Steve Farrell 01293 846613 Chief reporter Ian Quinn 265 Senior reporter Marianne Calnan 319 Retail reporter Lyndsey Cambridge 01293 846647 Digital & social editor Ellis Hawthorne 468 Online content assistant Maddie Maynard 440

finance desk Finance editor Alec Mattinson 01293 846512 City reporter Elena Cherubini 411

buying & supplying desk Food & drink editor Daniel Woolfson 442 Fresh foods editor Kevin White 290 Fresh foods reporter Henry Sandercock 492 International trade reporter Harry Holmes 01293 846553 Food & drink reporter Abbie Dawson 01293 846516

features desk Group features editor Emma Weinbren 488 Features editor Lois Vallely 01293 846653 Technology editor George Nott 247 Special projects editor Daniel Selwood 369 Food trends reporter Ash O’Mahony 398

subs desk Chief sub-editor Mark Dishman 232 Sub-editor Charlie Cook 415

art desk Art director Michael Joslin 207 Group Art editor Stuart Milligan 270 Art editor Nick Figgins 451 Designer Caitlin Watson 01293 846611

commercial Commercial director Cathy McDonagh 289 Area sales managers Beverley Burkett 284 Stephen Cooke 436 Sam Dack 453 Damien DuVivier 245 Oliver Hamilton-Williams 352 Mark Hayward 293 Tim Parker 217 Andrew Simcock 285 CCM ad production Kevin Porter 020 7216 6449

recruitment Recruitment Commercial Director Zoe Cooper 278 Online sales executives Esther Mean 250 Holly Hodges 589

Jeremy Garlick

esco is the clear number one supermarket in the UK, holding 27% market share, with Sainsbury’s next best at 16%. Industry sentiment has been that Tesco in the UK is wellrun, delivering decent financials and performing credibly in a challenging environment. So how is it doing this, and what can we learn from it? With Aldi and Lidl continually adding stores and building market share, any competitor of scale needs to fight on two fronts. To win, even to survive, requires affordability (relative to the discounters) and product or service differentiation. Tesco needs to convince shoppers that despite all the noise, it is not that much more expensive than the discounters and it offers something significantly different and better. To convince on value, Tesco has done three things. First, the Exclusively at Tesco brands, such as Redmere Farms produce and Willow Farms chicken, which look to match discounter

equivalents at very keen prices. Sainsbury’s has followed suit, and both companies seem committed, suggesting it is working for them. Second, Tesco uses attentiongrabbing promotions. It has tried to match Aldi’s formidable Super 6 produce promotion with a similar mechanic, without yet achieving the same impact. It is also occasionally offering the popu-

“Tesco has clearly laid its bets on plant-based, as a growing trend” lar three for £10 on meat on gondola ends (though only across a small number of lines). Third, Tesco rewards loyalty with lower prices. Clubcard Plus offers 10% off two shops a month, plus a continuous 10% off some Tesco own-brand non-food. For careful shoppers spending a lot, the overall impact on price is significant. To convince shoppers on differentiation versus Aldi and Lidl

requires a clear choice on where and how to differentiate. You can’t differentiate on everything, so you have to make some bets. Tesco has clearly laid its bets on plant-based, as a growing UK food trend. First, it has developed a very credible range, with two Exclusively at Tesco brands – Plant Chef (everyday) and Wicked Kitchen (foodie) – plus an authoritative range of independents (Naked Glory, Vivera, Richmond, Like Meat). Second, it has dedicated, colourful bays in meat, fish & poultry and in prepared food. Third, it has supported this with shopper marketing, which in January included a prominent gondola end in the value aisle and a Food Love Stories meal idea. So how is Tesco sustaining performance? Defending on price and then betting on specific areas where it will differentiate – right now, in plant-based. The number one spot is there to be shot at, but Tesco has clear strategies to limit the damage, from which we can all learn. Jeremy Garlick is partner at Insight Traction

events Events manager Helen Law 587

corporate contacts Managing director Retail & Manufacturing Lorraine Hendle 243 CEO Charles Reed 242 Head of content marketing Tracy Larner 01293 846543

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ISSN 0017-4351. Incorporating Grocery Marketing and CTN. The Grocer, Grocery Marketing, CTN and William Reed are trademarks of William Reed Business Media Ltd. Printed by Wyndeham Group. For more information: William Reed Business Media Ltd, Broadfield Park, Crawley, West Sussex, RH11 9RT Tel: 01293 613400 Web: www.william-reed.com

Volume: 242 Issue Number: 8439

24 | The Grocer | 1 February 2020

polling station Which new grocery boss faces the toughest task?

31%

18%

51%

Simon Roberts

Ken Murphy

Sharon White

NEXT WEEK: As the UK finally leaves the EU, how are you feeling? Vote now at twitter.com/thegrocer

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feedback

RUNNING OUT OF TIME With time running out to get our emissions under control, the government must act decisively – Martin Bowman, Feedback

We need urgent regulation to lower food waste Sir, Although Wrap’s Courtauld 2025 progress report shows some progress on food waste, fundamentally it confirms the inadequacy of voluntary business action, and the desperate need for regulation. Firstly, industry is making poor progress. Post-farmgate food businesses have collectively cut their food waste by a negligible 1% per year over the past three years. Secondly, the industry’s targets are unambitious. The voluntary Food Waste Reduction Roadmap promised 50% reductions in UK food waste from farm to fork by 2030

Restructuring Morrisons ● Sir, Morrisons is just one of

the many grocers facing the task of restructuring in this age of accelerated change. But a decision made at the top doesn’t mean an instant solution for its 491 stores – they must take their staff on the journey with them. Engaged employees are a valuable asset in times of disruption as they act as ambassadors for change. Fundamentally: businesses need to involve employees in the conversation and give them time to grieve. Cuts in management and expansion of in-store staff are often perceived as positive by customers. Aligning internal communications and processes with these external perceptions will ultimately result in alignment from the boardroom to the shop floor. Shelley Hoppe, agency director, Spoon London

Red Tractor quality ● Sir, With food standards

becoming a key point of contention in discussions about postBrexit trade, we must not lose sight of how far British food has come. Get the full story at thegrocer.co.uk

– but it has recently emerged that the “50%” target is to reduce post-farmgate food waste from 10.2 million tonnes in 2015 to 8.1 million tonnes in 2030 – 15 years for a 21% decrease. Thirdly, businesses are not being transparent. The Roadmap promised that

As Red Tractor enters its 20th year, now assuring around 75% of UK agriculture, one thing has remained constant over the past two decades – Red Tractor has continued to help keep food

your tweets Aldi rolls out compostable carrier bags to all UK stores Brands need to scrutinise the environmental impact data of all their packaging and make the best decision based on this alone. Credibility with customers will subsequently grow @sophierc1 Food & drink products launching for Valentine’s Day 2020 Full marks to @GuPuds for their limited editions. I've always loved @harrisdistiller for their bottle & the gin, so this is a clever twist. @HelenTWrites Sainsbury’sCEOCoupetoretire, replaced by Simon Roberts Think people are forgetting the legacy Justin King left. Compare the stores then to now – chalk and cheese @andrewbusby

signatories would publish their food waste data – however, after over a year, the majority continue to share their data in secret with Wrap. In the government’s 2018 Resources and Waste Strategy, it promised it would consult on whether to introduce binding national food waste reduction targets, and compulsory food waste reporting for large food businesses. With time running out to get our emissions under control, the government must act decisively. It must introduce binding targets to halve food waste from farm to fork by 2030, fund the measurement of farm-level food waste, and make it compulsory for large food businesses to report their food waste data publicly. Martin Bowman, senior policy & campaigns manager, Feedback

produced in Britain safe. We should be proud of how food is produced in this country. Food standards are one of British farming’s strongest assets, and that’s underpinned by Red Tractor. Jim Moseley, CEO, Red Tractor

Sustainability targets ● Sir, While governments strug-

gle to meet their ambitions on sustainability, businesses are recognising that consumers want change. This week saw Sainsbury’s commit to an ambitious plan to reduce its net carbon emissions to zero over the next 20 years. What makes Sainsbury’s pledge stand out is the emphasis it places on carbon reduction (not just offsets), the acknowledgement of the scale of investment needed and the focus on areas such as biodiversity and food waste. I urge those that have criticised Sainsbury’s plan for not involving its supply chain to reconsider. I commend Sainsbury’s for the breadth of their commitment. The hard work starts now. Giles Gibbons, CEO & founder, Good Business

best of the blogs Should Sainsbury’s win such acclaim for its carbon reduction commitment? Sainsbury’s has committed to making its business and operations ‘net zero’ by 2040. But the ‘Sainsbury’s saves the planet’ spin feels a bit over the top. After all, the initiatives announced by the company hardly hurt it. Big chains scrabbling to beat each other on carbon commitments shouldn’t be sniffed at. But considering the sheer scale of their negative impact on the environment, it feels like it’s the very least they can do. George Nott, 29 January

Februdairy campaigners need to adopt the vegan lobby’s tactics The animal rights and plant-based lobbies have been working up a head of creative steam to ruin dairy’s party. Animal rights activists are passionate, and they aren’t necessarily going to play nicely. Rather than just relying on a hashtag, the dairy industry needs to use its vast wealth and leverage to come up with a new, agenda-seizing strategy. Henry Sandercock, 28 January

Will government listen to “sensible” Brexit calls? With Britain poised for Brexit day, who will win out? Will it be the sensible approach set out by dozens of trade groups speaking for a sector contributing £460bn to the national economy, directly employing more than four million people? Or will it be the hardline stance of ministers who could choose to take the “f*** business” approach on a grand scale? Ian Quinn, 27 January

You can subscribe to the Daily Bread blog and the new finance newsletter and blog at thegrocer.co.uk

1 February 2020 | The Grocer | 25

fascia special

The past few years has seen unprecedented upheaval in the UK convenience sector. So what does the landscape look like now for the big players? And are there more changes ahead? Lyndsey Cambridge

he past few years have been some of the most tumultuous in the history of the UK convenience sector, with the landscape changing beyond recognition. Within the past three-and-a-half years Palmer & Harvey collapsed, Tesco completed its takeover of Booker, Co-op bagged Nisa and agreed a supply arrangement with Costcutter, Bestway snapped up Conviviality Retail after the wider Conviviality business hit the rocks, and the two biggest wholesale buying groups, Today’s and Landmark, merged to create Unitas Wholesale. But as the dust begins to settle, which developments have affected independent and symbol retailers the most? What have the consequences of consolidation been? Are the promised benefits being delivered? And how are rivals responding? Far and away the biggest and most significant move of recent times has been the UK’s biggest grocery retailer buying the biggest wholesaler, for £3.7bn. Tesco’s acquisition of Booker was completed in March 2018 amid great fanfare – and a lot of promises about the benefits to be bestowed on thousands of independent retailers served by Booker, particularly those under its Budgens, Londis, Premier and Family Shopper fascias. Fast-forward a year and many of these retailers were starting to grumble that the lower prices expected as a result of Booker flexing its £55bn Tesco buying power had yet to materialise – as had any great technology and service improvements. This was addressed last March by Booker CEO Charles Wilson, when he outlined a series of price investments that he claimed could save retailers up to £6,250 a year. This later grew into the wholesaler’s ‘Bigger Group, Better for All’ strategy, which Booker MD for retail Colm Johnson says is “progressing well”. It is not just about cheaper prices, he argues, but improvements to the quality of own brand products and a better range, offering retailers more choice. “Booker has been able to source more than 30 lines from Tesco’s range, which have been repackaged into our retail own labels, which includes Discover the Choice Italian desserts, frozen party food and

26 | The Grocer | 1 February 2020

Get the full story at thegrocer.co.uk

1 February 2020 | The Grocer | 27

fascia special

“Produce can traditionally be hit and miss but the quality control now is far superior and has come with a price reduction”

Co-op’s franchise learning curve One of the most exciting elements of Co-op’s bid for Nisa was the potential for the development of a franchise model. However rather than being a rapid rollout, it has been more of a slow and steady learning curve – not least because four of the eight stores to become Co-op franchises are on university campuses. Three are at companyowned Costcutter stores and the first Nisa retailer to become a Co-op franchisee did so in November, when Richard Williams converted his store to Co-op Somerton. This is some way behind the ambitious target set out last April by Co-op Group CEO Steve Murrells, who predicted 20 franchisees by the end of the year, with a further target of 200 stores. Now that Williams has taken the plunge,

the Co-op expects other Nisa retailers to follow, particularly those who are looking to retain ownership of their stores but to take a step back from the full-on dayto-day running of the business. It also expects the model to grow across other universities. Newcastle University Student’s Union director of commercial and operations Graham Hattam says the switch has been transformational. “When we were looking to refurbish, we looked at different options and other wholesalers, but we went to see the first Co-op franchise at Leeds Uni and were really impressed by the Co-op product, the sales uplift and well-developed store.” That visit took place in March last year and the

28 | The Grocer | 1 February 2020

newly refurbed 2.500 sq ft Newcastle store was up and running by the start of the new academic year in September. The store has been equipped with a muchexpanded product range including a focus on food to go and bakery, and has 14 self-service checkouts. Sales have increased by over 1,000% and where previously it employed a handful of staff, there are now 30 staff – 25 of whom are students. The key for Hattam has been the support from the Co-op, which has seen dramatic improvements in availability, reduced wastage and range and trends advice. “We are learning so much and it has freed us up to spend a lot more time on the shop floor, which has led to us being able to offer much better customer service.”

wines such as Previata prosecco, Don Pavral rioja and Paterson’s Grove sauvignon blanc,” he says. “It’s helped our own label ranges grow, with Discover the Choice up 50% and Euro Shopper up 13%. We have also been sourcing brands which are only available in Tesco for Booker customers. These include 18-pack Carling and Foster’s, 24-pack Coke and seasonal products such as Easter eggs.” On the pricing front, Booker also launched its new Tobacco Club last February, having struck a deal with Imperial Tobacco. The move promised to improve margins by 2% and enable Booker’s retailers to better compete with the major grocers. Premier retailer Samantha Coldbeck is seeing margin increasing to 5% for her tobacco sales. “Without a shadow of a doubt this has been a massive footfall driver,” she says. “It was becoming quite an uncompetitive playing field as we couldn’t sell them at rrp until this club was introduced.” The Hull-based retailer says overall average basket spend is up £1 from this time last year and insists the tobacco club is a key driver of this growth. Other Booker retailers are happy to testify that improvements are coming through. “Produce can traditionally be hit and miss but the quality control now is far superior and has come with a price reduction,” says Raj Chandegra, a Londis retailer for more than 30 years. He has seen prices drop 30% across some lines, including salad products, but is hoping for further movement. “Pricing is always there and top of the agenda, but there is still room for improvements.” Rivals respond The lure of Tesco is clearly an attractive proposition for independent retailers, with the Budgens and Londis estates growing by more than 50 stores in the past year. But of course, Booker’s improved competitiveness has not gone unnoticed by rivals. So how are they responding and is it all about price? “The Booker-Tesco threat is still there in terms of size and exclusivity on products as well as what they can do on price,” explains Parfetts retail director Guy Swindell. “If we have stores in the same area as a Premier we will always make sure we are being competitive on price.” But Swindell insists there is more to it than price and its Go Local symbol is certainly enjoying strong growth in terms of store numbers, up from 400 last year to 500. “We don’t see the merger as a huge threat yet,” he says. “In fact it has provided opportunity. Some customers don’t want to be part of Tesco, and wish to remain truly independent.” He adds that 10% of the stores to sign up with Go Local in the past year were Premier fascias. Get the full story at thegrocer.co.uk

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Go Local has also benefited from the fallout at other groups. It picked up 15 former Bargain Booze stores in 2018, and when Blakemore sold off its cash & carry arm in June of that year, Parfetts bought its Middlesbrough depot and subsequently converted 40 Lifestyles stores to Go Local. “Price is obviously absolutely key but availability is the most important thing to our retailers,” explains Swindell. “There is no point offering a good price if you haven’t got the stock. Availability can be a real problem if products featured on a promotional leaflet are not in stock.” For Nisa and Costcutter, the most potent weapon in their armouries is the Co-op own label range – a clear step up in terms of quality from Nisa’s previous own brand Heritage, and simply in a different league to the Independent brand Costcutter developed with P&H. “The introduction of the Co-op range in-store was speedy,” testifies Harris Aslam, owner of Eros Retail. “We see Co-op as market leaders – they have come on leaps and bounds as a business. The beauty of Co-op is that you can tap into their range or not. Booker customers are not seeing Tesco products come through [at the same level].” Also coming into the Nisa supply chain in the past few weeks has been Co-op’s new Gro vegan range. While the main supermarkets have been shouting from the rafters about their vegan NPD recently, the trend is still very much in its infancy in the convenience sector. Being able to access a credible plant-based range is a big point of difference for Nisa and Costcutter retailers. According to Nisa, 1,900 partners have already stocked the range, which launched in early January. One of those, Dan Brown, MD at Pinkie Farm in Musselburgh, says: “We thought we’d give the Gro

“Price is obviously key but availability is the most important thing to our retailers”

Premier retailer Samantha Coldbeck says Booker’s Tobacco Club, launched last February, has helped increase her profit margin on tobacco to 5%. ‘Without a shadow of a doubt this has been a massive footfall driver,’ she says

range a try and have had a fantastic response from customers. We have now made the majority of the range a permanent feature within the store, with the food to go and ready meals being particular favourites.” Now with a much better own brand offer and improved availability via the Nisa supply chain, Costcutter is also pointing to the other key strategic pillar – its Shopper First insight programme. Its added-value retailer support is playing a vital part in moving Costcutter forward, explains CEO Darcy Willson-Rymer. “Recently we visited one retailer who had a great range in store but was really struggling with the back office stuff,” he says. “Another could account for every single penny, but he wasn’t stocking the right products. We were able to help both.” Shopper First is now in its third year and Costcutter is convinced it is paying dividends. And it is by no means the only symbol operator going down the insight route. Late last year, after spending much of the previous 18 months fighting to get the business back on an even keel in the wake of the Conviviality fallout, Bestway Retail confirmed it was also embarking on a major trial based on demographics, geography and local competition, for its Bargain Booze symbol. “We are now live with our fascia format project and will open new trial stores in our corporate estate in the first half of this year,” says chief retail officer Andy Cresswell. “Developments around the fascia formats have included analysing every existing store site to see what the local demographics demand and establishing differences between our specialist drinks offer, our value-led drinks offer and our convenience offer, all of which we hope to roll out for franchisees in the future. “The format developments take account of branding, range, promotional approach and training in terms of what knowledge store colleagues need to develop and specialise in.” Price But of course price is never too far away from retailers’ minds, particularly faced with rising costs such as the national living wage. This is certainly the case for retailers supplied by Bestway, which has always had a strong reputation for driving a hard bargain with its suppliers. “As the industry continues to develop, so too does our offer to consumers,” adds Cresswell. “Our scale is utilised to get the best deal for all our retailers and enables us to have a comprehensive Best-one own label range which offers retailers great margins, consistent quality and low prices for their consumers.” Best-one retailer Kay Patel confirms the wholesaler “has reacted to Booker”. “The offers are so strong. Prices are better on beer, wines and spirits than I’ve seen in years,” he says. “Most definitely price is the number one reason I am with

30 | The Grocer | 1 February 2020

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“Our key is to stay focused on what the customer wants and needs and we are going to ensure we can provide that efficiently” Bestway. The most competitive categories are booze, confectionery and weekly tobacco offers.” Just like Costcutter and Bestway Retail, new Spar UK MD Louise Hoste, who took over in September, says its focus is on supporting retailers to better serve the consumer. “Our key is to stay focused on what the customer wants and needs and we are going to ensure we can provide that in the most efficient way,” she says. “We are working with our suppliers on the end-to-end supply chain to find opportunities where we can remove unnecessary cost for all parties.” Spar’s store numbers have held steady this year at about 2,600. That is an adjective that could also apply to Unitas, which has been keen to maintain the status quo for retailers following the Today’s-Landmark merger. Consistency for consumers The buying group agreed at the time it would keep its Today’s, Day-Today and Lifestyle Express fascias. Each of the banners offers identical terms, bar a geographical differentiator for Day-Today, which is in Scotland. “A strategic decision was taken by the Unitas Wholesale board that all three fascia brands would remain to maintain consistency for our consumers and those retailers already operating under their existing fascia,” says John Kinney, retail director at Unitas. “The three options provide retailers with choice in terms of the look of their store. They also help in terms of retailers operating in close proximity where an existing fascia may already be in place.” The industry has stabilised over the past year, but symbol and franchise operators know better than most that very little stays the same for long in the convenience sector, no matter how much some might want it to. The sector is starting to see a lot more technology coming in. Rapid delivery appears to be the next big battleground: where once retailers would strike individual deals with the likes of Deliveroo and Uber Eats, now it is symbol groups and wholesalers, including Bestway, Nisa and Costcutter, doing big deals with these operators. But controlling the supply of goods remains the most important mission for wholesalers and symbols. Just last month, SimplyFresh, which has a supply deal with Costcutter for another two years for its 90-plus estate, kicked off a one-store supply trial with Sainsbury’s (see right). Could this herald a bigger deal further down the line? Quite possibly. Sainsbury’s has a long-held ambition to join Tesco, Morrisons and the Co-op in growing the wholesale side of its business. The dust may have settled for now, but it won’t take much to shake it all up again. Get the full story at thegrocer.co.uk

SimplyFresh trial offers a taste of the future For years the convenience store sector was driven by independent operators coming together to create the scale necessary to compete with the major mults. However, the Tesco-Booker deal in 2017 meant that “the volume would now consolidate underneath the grocers”, says Costcutter CEO Darcy Willson-Rymer (see p44). Tesco, Morrisons and the Co-op have all secured major wholesale deals, but conspicuously, Sainsbury’s has not, despite many attempts to do so and several trials. It has come close, notably in the summer of 2017 when it was in pole position to snap up Nisa before getting cold feet and leaving Co-op with a clear run at it. Sainsbury’s has dipped its toes elsewhere with trials including Euro Garages and WH Smith,

and some of these are still ongoing. Last month The Grocer revealed it had kicked off another wholesale trial. This time supplying 2,000 own brand and branded lines to one SimplyFresh store. The tie-up at Oak Lane in Willesden Junction could be seen as more of the same, small-scale trials that ultimately don’t amount to much, but both Sainsbury’s and SimplyFresh have hinted that the relationship could grow further. “SimplyFresh is committed to meeting and exceeding customer expectations. This trial will provide valuable feedback on how we continue this in the future,” says CEO Tim Chalk, who joined in 2018 to focus on strategy and future growth plans, and interestingly spent the first six years of his

career at Sainsbury’s. It is still early days, says SimplyFresh creative director Davinder Jheeta, “but we are already seeing clear signs that our customers approve. As you can imagine, January can be challenging in retail but encouragingly we are seeing the store and its gross margin trading up like for like.” SimplyFresh is currently supplied by Costcutter for the rest of its 90-store estate and that deal has two more years to run. So growing the Sainsbury’s partnership is not a done deal – at least in the short term. And for Sainsbury’s even servicing the full Simply Fresh estate is a drop in the ocean vs rivals. But Costcutter has a 20% stake in SimplyFresh. So who knows where it might lead?

1 February 2020 | The Grocer | 33

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Best-one

Bargain Booze, Select Convenience and Wine Rack Owner: Bestway Retail Stores 2019 (vs 2018): 603 (700) Type: Franchise Membership costs: From £1,600 per year Delivery costs: £500£999 = £25, £1,000+ free Minimum contract: Three years Minimum order levels: Subsidised delivery charge dependent on category Minimum order: £0 Rebate: Up to 4% Other benefits: “Awardwinning alcoholic drinks

range, hand-balled deliveries, national and local consumer marketing support, managed EPoS solution, support for franchisees seven days a week, HR support for in-store recruitment.” Services: Fascia, EPoS system, full shop fit. USP: “A drinks-led specialist with multiplefranchise fascias to choose from.” How are you helping retailers to survive and differentiate? “A ‘fully delivered’ model with

potential to earn of wholesale spend, and a welcome pack up to £25k for all new stores. Personal delivery service to stores.” What key changes and developments have you made in the past year? “Improved ranges, improved marketing and introduced a new rewards scheme.” Future plans: “We’ll be running a store format trial, developing the ‘here and now’ and being fit for the future.”

Owner: Bestway Wholesale Store 2019: 2,250 (2,100) Type: Symbol Membership Costs: £0 Delivery costs: £500-£999 = £25, £1,000-plus = free Minimum contract: Three years Minimum order levels: N/A Minimum order spend: £5,000 per week, a maximum of 50% of which can be tobacco Rebate: Up to 5% ‘My Rewards’ plus up to an additional 5% with ‘Core Rewards’ Other benefits: “We offer a dedicated business development manager, regional RDA meetings, 14 days’ credit, regional delivery hub depots, subsidised PoS and consumer leaflets.” Services: My Rewards rebates can be used to invest in store development projects USP: Forecourts, supplying more than 1,300. How are you helping retailers to survive and differentiate? “Industry best-in-class BDM support.” What key changes and developments have you made in the past year? “Core rewards were introduced and we developed a common range to give consistent availability across all our depots.” Future plans: “We’re looking at technology, particularly geared to supporting a cashless society.”

Budgens Owner: Booker Wholesale Stores 2019: 310 (252) Type: Symbol Membership Costs: £0 Delivery costs: £0 Minimum contract: Three years Minimum order levels: 75% Minimum order spend: 150 cases Rebate: Up to 6% of nontobacco spend, paid every four weeks Other benefits: “Free fascia and installation package contribution. 34 | The Grocer | 1 February 2020

Own-brand ranges of over 750 SKUs dedicated to independent retailers. We also offer the support of retail development manager, merchandising team, fresh food advisors and a store planner.” Services: Store refit planning and project management. USP: Our meals-fortonight offer and fresh convenience ranges. How are you helping retailers to survive and differentiate? “We offer development in food to

go, fresh, bakery, health, trends, events, technology, bestsellers and local products.” What key changes and developments have you made in the past year? “We’ve added new foodto-go ranges and concepts as well as national distribution capability.” Future plans: “Technology solutions to help retailers be more efficient, an increased focus on services, sustainability and operational efficiencies.”

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Go Local

Costcutter Owner: Costcutter Supermarkets Group Stores 2019: 1,560 (1,776) Type: Symbol Membership costs: £0 Delivery costs: £0 Minimum contract: N/A Minimum order levels: Individually agreed with retailers Minimum order spend: 80 cases ambient, 30 cases chilled/frozen Rebate: Up to 6% Other benefits: “Business development manager, Shopper First and Drive Five to Thrive

offers, access to Co-op products, loyalty scheme rewards, marketing support including leaflets and social media.” USP: “The wholesale supply partnership with the Co-op is a major factor in the decision of retailers to join our group.” How are you helping retailers to survive and differentiate? “The insights and data helps provides the tools, guidance and support retailers need to attract new

shoppers and drive incremental sales.” What key changes and developments have you made in the past year? “Introduced the Shopper First, Drive Five to Thrive business growth programme as well as offering footfall-driving marketing promotions, and a compelling wholesale and retail offer.” Future plans: Using technology to grow sales and margin, and developing food-for-now and health food missions.

Owner: Parfetts Stores 2019: 500 (400) Type: Symbol Membership costs: £0 Delivery costs: £0 Minimum contract: Five years Minimum order levels: N/A Minimum order spend: £0 Rebate: 2% Other benefits: “We have three tiers of promotions on a daily and weekly basis, and our own-brand Lifestyle range offers over 500 lines” Services: Access to approved suppliers USP: “Parfetts is an employee-owned business, and its employees play a major role in the success of the company and its retailers.” How are you helping retailers to survive and differentiate? “A 20-strong retailer development advisor team.” What key changes and developments have you made in the past year? “Investing in a larger geographical footprint and a major investment in the digital offer in a bid to become best in class for customers online, in depot and on mobile.” Future plans: “The rollout of GOLD (Go Local Direct), a 24-hour depot concept.”

Family Shopper Owner: Booker Wholesale Stores 2019: 91 (81) Type: Symbol Membership costs: £0 Delivery costs: £0 Minimum contract: three years Minimum order levels: N/A Minimum order spend: Delivered = £1,000 Rebate: 5% Other benefits: Free services including EPoS scheme, van scheme, delivery at cash & carry prices, store layout plans 36 | The Grocer | 1 February 2020

and merchandising support, fascia and window imagery, PoS and personalised leaflets. An enhanced fresh range and food-to-go solutions are also available. USP: “We offer the strength of a symbol combined with the great value of the discounter.” How are you helping your retailers to survive and differentiate? “The nine-box plan and driving incremental footfall and amazing value.”

What key changes and developments have you made in the past year? “We’ve made developments in food to go, as well as driving local community involvement, encouraging local sourcing and the introduction of listening groups.” Future plans: “To continue to work with our customers, developing choice, price and service for all retailers, and to continue to offer the consumer a bargain every day.”

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Londis Owner: Booker Wholesale Stores 2019: 2,022 (1,968) Type: Symbol Membership Costs: £0 Delivery costs: £0 Minimum contract: Three years Minimum order levels: 75% Minimum order: £5,000 per week Rebate: Up to 4% Other benefits: “Free EPoS, market-leading distribution network, tri-temperature deliveries.” Services: None USP: “Forecourts, supplying more than 1,300.” How are you helping retailers to survive and differentiate? “Londis are always focusing on the growth areas to help deliver increased footfall and cash profit. Greater emphasis on ‘eat and drink now’ shopper mission providing solutions and support to tap into this market.” What key changes and developments have you made in the past year? “Launched the ‘Cool Desserts Co’ desserts bar offer with a full support package, as well as a new distribution centre in Hemel Hempstead.” Future plans: “We have committed to helping our retailers make an additional £10k of profit. We will continue to focus on growth areas and profit drivers.”

Nisa Owner: Co-op Stores 2019: 947 (870) Type: Symbol Membership costs: From £860 + VAT annual subscription Delivery costs: Dependent on retailer Minimum contract: Six months on a rolling basis Minimum order levels: “100 cases chill/freeze and 300 cases ambient for symbol partners. For independents/specialists, 200 cases ambient per delivery, with option of 100 cases of chill/

freeze over the week.” Minimum order: £0 Rebate: Dependent on volume Other benefits: “Co-op’s own brand products are available across all categories.” Services: “The insight team offers assistance with layout including the latest ‘Evolution’ store format.” USP: “Strong field team, fresh food development managers, Co-op products.” How are you helping

your retailers to survive and differentiate? “Nisa can provide up to 13,000 SKUs. Our supply chain offers retailers 99.9% of deliveries made on the day.” What key changes and developments have you made in the past year? “We are delighted with the success of the rollout of Co-op products.” Future plans: “Increasing the number of promotions. A focus on fresh and food to go will remain prevalent.

One Stop Owner: Tesco Stores 2019: 200 (180) Status: Franchise Membership Costs: £92 per week Delivery costs: £0 Minimum contract: Five years Minimum order levels: N/A Minimum order spend: N/A Rebate: 1% excluding tobacco and news Other benefits: “Monthly visit from a BDM. Upon signing, a £50,000 fixtures and fittings

package is paid. PoS packs are provided for free. Access to One Stop’s e-learning modules and training is available.” USP: “We run 750 of our own shops. This means we can help retailers trade how we trade. We can offer greater buying expertise, which results in better margins.” How are you helping your retailers to survive and differentiate? “We pass on knowledge, efficiencies and expertise. We use customer insight

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to drive decisions and innovation to help our franchisees. We support our franchisees by providing healthy margins across their shop, even in our promotions. What key changes and developments have you made in the past year? “We have continued to develop our range of 420 own label products including many multibuy options. New stock ordering systems, plus a new EPoS system currently rolling out.” 1 February 2020 | The Grocer | 39

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Select & Save

Premier Owner: Booker Wholesale Stores 2019: 3,350 (3,349) Type: Symbol Membership costs: £0 Delivery costs: £0 Minimum contract: three years Minimum order: N/A Minimum order spend: £1,000 for delivery Rebate: Up to 4% Other benefits: Up to 4% spend and save scheme. Free PoS and personalised leaflets, EPoS scheme, van scheme,

fascia imagery, store layout plans and merchandising support, enhanced fresh range, food-to-go solutions. USP: Driving incremental footfall and value. How are you helping your retailers to survive and differentiate? “Introduction of the nine-box plan and delivering a convenience model that drives 30% POR.” What key changes and developments have you made in the past year?

“We’ve launched an exclusive coffee machine deal, introduction of the dessert bar and increase in food to go, space to sales analysis tools, encouraging local sourcing.” Future plans: “Home delivery app, increase the use of social media, improvements to the nine-box plan, enhanced fresh solution via BRP, stronger promotions, reducing allocations, as well as a bakery, bread and butchery push.”

Owner: S&S Retail Trading Stores 2019: 170 (78) Type: Symbol Membership costs: £0 Delivery costs: £0 Minimum contract: Three years Minimum order: £5,000 per week, a maximum of 40% of which can be tobacco Rebate: Up to 5% excluding tobacco Other benefits: “Free personalised leaflets and PoS each period. Typically two ambient and three chilled deliveries per week. A credit line of up to 21 days.” Services: “We have an in-house team that supports members with shop-fitting.” USP: “We are a small team of dedicated retail professionals who are passionate about what we do.” How are you helping retailers to survive and differentiate? “We have a significant breadth of retail experience. We know and understand our business, our members and their customers. Members have access to Select & Save and Bestway promotions.” What key changes and developments have you made in the past year? Expanded into forecourts and teamed up with Amazon, installing locker pick-ups. Future plans: Continuing to expand the fascia estate.

SimplyFresh & SimplyLocal Owner: SimplyFresh/ Costcutter Stores 2019: 90 (90) Type: Symbol Membership costs: £7.50 weekly media fee Delivery costs: No additional delivery cost. Minimum contract: SimplyFresh five years, SimplyLocal three years Minimum order levels: SimplyFresh 80% of wholesale spend, SimplyLocal 70% of wholesale spend Minimum order spend: SimplyFresh £7,500 40 | The Grocer | 1 February 2020

Weekly, SimplyLocal £5,000 weekly Rebate: Up to 6% on both ambient and chilled Other benefits: “We have dedicated business development managers and store development managers, as well as Co-op own label.” USP: “Our focus on fresh is truly represented by our brand.” How are you helping retailers to survive and differentiate? “We can create bespoke marketing campaigns tailored

to each store.” What key changes and developments have you made in the past year? “The introduction of the SimplyFresh Foodhall store in Stretford, Greater Manchester, and the launch of Our Planet, an ‘unpacked’ initiative.” Future plans: “Little Fresh is positioned to explore new retail opportunities in existing highfootfall locations, while SimplyFresh continues to trial technology in stores.”

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Today’s, Day-Today, Lifestyle Express

Spar Owner: Spar UK Store numbers 2019: 2,600 (2,600) Type: Symbol Membership costs: £0 Delivery costs: £0 Minimum contract: N/A Minimum order levels: Dependent on retailer Minimum order spend: Dependent on retailer Rebate: Not disclosing Other benefits: “A business development manager per retailer. Access to more than 900 Spar own label products plus the foodservice Daily Deli brand. Leadership, development and training academies are available to retailers free of charge. The Guild system monitors and understands developments, trends and learnings in competitors and consumers. The Smartsavings scheme offers retailers reduced costs on goods and services.” USP: “Our strategic focus on convenience retail offer and the shopper ensures Spar has the right products and services available. Its experience, knowledge of the market and

the consumer sets Spar apart.” How are you helping retailers to survive and differentiate? “The People’s Podium continues for a third year. The digital strategy continues with social engagement, content stories and store visibility increasing. Seasonal opportunities are supported with marketing and selling plans.” What key changes and developments have you made in the past year? “Ensure retailers maximise their profits, especially in the food to go mission. We have continued to reduce sugar and salt across own brand and introduce new lines such as vegan wines. Apps for free water and food waste have been introduced.” Future plans: “We will look at how forecourts are used with the change to electric cars, the increase in foodservice and also in the services our stores will offer for the local community including the reduction of plastic and food waste.”

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Owner: Unitas Wholesale Stores 2019: Today’s 272 and Day-Today 230 = 502 (500); Lifestyle Express 500 (760) Type: Symbol Membership costs: £0 Delivery costs: Dependent on retailer Minimum contract: Agreed locally Minimum order levels: Agreed locally Minimum order spend: Agreed locally Rebate: Agreed locally Other benefits: “Access to a three-weekly promotional programme across all categories, supported by leaflets and PoS. Core range and merchandising advice via Plan for Profit and member wholesaler. Access to extensive own label

products across grocery, non-food and licensed ranges. Drop shipment and support services.” Services: Negotiated as part of the store refit USP: “As the UK’s largest wholesale services company with scale of over £8.5bn, the group provides retailers with the freedom to exert their commercial independence together with the benefits of a partnership with strong independent wholesalers. How are you helping your retailers to survive and differentiate? “Business development managers help to create inviting stores. The drop shipment helps to reduce costs and grow incremental sales. The Plan

for Profit app and website provides retailers with range advice to help grow and manage sales and profit.” What key changes and developments have you made in the past year? “We have strengthened and our own label brands – Lifestyle, LSV, Lifestyle Value, Sunspring water and a range of ciders, Vintners Collection and Prince Consort – and improved promotions due our added buying power. Future plans: “Growth in the drop shipment suppliers to support growth and trends in freefrom, healthy living etc, which may not be available from mainstream wholesalers.”

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44 | The Grocer | 1 February 2020

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big interview Darcy Willson-Rymer

The ultimate survivor Ronan Hegarty

Darcy Willson-Rymer steered Costcutter through the wreckage of P&H’s 2017 collapse. Now his mission critical is to make Costcutter the most loved symbol group – and to help convenience to thrive

f I was a cat, I would have used up all nine lives,” says Costcutter CEO Darcy Willson-Rymer. He’s looking back on the collapse of wholesaler Palmer & Harvey, which nearly took Costcutter with it. It’s been just over two years since P&H bit the dust, giving Costcutter just two hours’ notice that it would no longer be delivering to its retailers. Willson-Rymer describes the aftermath as “the most difficult and challenging time” of his career, but also a period he looks back on with pride, having subsequently set Costcutter on what he sees as a new and better path. The series of unfortunate events that led to the demise of P&H can be traced back to March 2013 and Willson-Rymer’s fateful decision, just over a month into his role at Costcutter, to call time on the symbol group’s 25-year relationship with Nisa. When the switch was made to Palmer & Harvey in July 2014 it was immediately beset with problems. Availability was poor and suppliers railed at the added complexity. In the year before P&H’s eventual demise, availability issues became so acute retailers left in their droves. Regret? Most observers will tell you Costcutter should never have left the comfort of Nisa, so does he regret the original split? “At the time everybody felt we had no choice but to leave Nisa,” he explains. “We understood P&H wasn’t perfect the way it was, but the plans we had agreed with P&H meant they would take the Costcutter volume in, and that would generate sufficient cash for them to make the necessary investments and we would learn and grow together. In fact it just didn’t happen: they weren’t able to make the investments they needed.” Ultimately, it was external events that brought about the end of the P&H dream. “The game-changer in the market was Tesco acquiring Booker,” he states. “Once that decision was made it became clear that rather than all the independents coming together and pooling our volume to buy and distribute together and give us the scale of a supermarket, instead Tesco-Booker meant the volume was going to consolidate underneath the grocers. Indeed, that’s exactly what happened subsequently, with Co-op buying Nisa and Morrisons supplying McColl’s.” Willson-Rymer says this was then the trigger for its decision to pull the plug on its deal with P&H and move to a new supply deal with the Co-op. The plan had been Get the full story at thegrocer.co.uk

snapshot Name: Darcy WillsonRymer Age: 55 Born: Canada Family: Married with two girls Potted CV: Started out as a waiter at Pizza Hut in York and went on to spend 19 years with Yum Brands. Worked for three years at Unilever Ventures as MD of Persil Service. In 2007, took on the post of MD of Starbucks UK & Ireland before becoming CEO of Clinton Cards in 2011 and joining Costcutter in 2013. Charitable work: Took over as chair of antipeople trafficking charity Stop the Traffic this year after seven years as a trustee. He says: “Working in a world where human beings are bought and sold, I have a fundamental issue with that and feel I need to do something about it.” Stop the Traffic works entirely in the area of prevention and has a mission to put an end to the trade entirely.

for a 12-month notice period with P&H, he explains, but in November 2017 P&H collapsed. The initial emergency response phase involved head office colleagues working round the clock, often personally driving stock to stores. “As the CEO, everybody is looking to you saying ‘so guv, what do we do?’ But actually the tribute goes to our retailers and colleagues who, in the face of great adversity, came together, pulled out all the stops and performed miracles,” he says. While challenging, Willson-Rymer claims: “If you talk to the retailers now they will say this is the best version of Costcutter we’ve ever seen in the 30 years we’ve been with you.” Ironically, some of this is down to being back in the Nisa supply chain, thanks to Co-op’s £137.5m purchase of the buying group. Availability is strong but WillsonRymer is keen to point out that it is not a case of reverting to business as normal, and that Costcutter is now a completely changed company. “Once we were in that system I spotted the immediate single focus of how to help our retailers survive was over, and it was about being ready to give direction to the company and say ‘here is the next phase’,” he says. Key to this is the Shopper First insight programme, launched in 2017, which Willson-Rymer describes as market-leading. “It is not a static thing as such but rather an umbrella programme based on a set of principles. It is grounded in the knowledge that 90% of the customers in the trade zone of a convenience store will visit once a year or less, and what we are doing is giving retailers the knowledge, skills and tools to talk to the 90% and get them to come in more often.” To do this, Costcutter is using sophisticated data analysts to develop store-by-store plans for ranging, merchandising and marketing – and it’s working, says Willson-Rymer. Costcutter will provide a full financial update later this month, and while he would not reveal exact numbers, he indicates the results will show sales improving following a 23.8% decline in 2018, a year in which store numbers fell from 1,776 to 1,560 in the immediate fallout from P&H. With the decline arrested, he adds that currently the stores joining the group have twice the average weekly sales of those leaving. “We don’t have a set target for store numbers. Our ambition is to be the most loved symbol group and we want to do that ultimately by helping independent retailers. We also want a thriving independent convenience sector. We think that is mission critical.” 1 February 2020 | The Grocer | 45

buying & supplying grocery

READY STEADY CHARLIE We have people tell us that they don’t eat ready meals, but they do eat Charlie Bigham’s – Patrick Cairns, CEO, Charlie Bigham’s

Charlie Bigham’s debuts in desserts with ready-to-bake Abbie Dawson Charlie Bigham’s is making its debut in desserts with a range of ready-tobake ‘Proper Puds’. It has created five puddings: Sticky Toffee, Sticky Ginger, Chocolate Fondant, Bread & Butter and Cherry Bakewell. They were made with “the choice ingredients found in a discerning baker’s pantry”, said the brand, such as “Belgian chocolate shards, sherrysoaked raisins, cinnamon sugar and sweet cherry compote”. They are packaged in the same wooden trays as the brand’s savoury meals, and have a 15 to 20-minute cooking time. They are being manufactured at a purpose-built bakery at

Five Proper Puds, including Sticky Toffee and Sticky Ginger, have been created

Charlie Bigham’s London base. The full line-up will roll exclusively into Waitrose from 6 February (rsp: £5.50/362g-490g). Charlie Bigham’s CEO Patrick Cairns told The Grocer the brand had

received “consistent responses from consumers asking why we don’t do puddings”. The move “involved us looking at the market and thinking actually, we think we can deliver something very different

and that is a very high quality, fresh, premium, traditional pudding”, he added. The brand sought out recipes “where the style of pudding is particularly suited to the fresh concept and is

also consistent with the brand”, he said. The ready meal category took a significant hit last year, with total category sales falling £52.3m to £3,882.1m [Kantar 52 w/e 8 September 2019]. But Charlie Bigham’s bucked the trend. It grew a whopping 24.7% last year to £77.2m, with volumes up 24.1% [Nielsen 52 w/e 7 September 2019]. Cairns said this was thanks to the brand’s “ability to deliver consistently high-quality meals” and shoppers treating its meals as “almost not a ready meal”. “We have people tell us that they don’t eat ready meals, but they do eat Charlie Bigham’s,” he added.

Lyons gives coffee Tyrrells debuts in nuts with bags range a revamp ‘premium’ duo of Nut Medleys Lyons has rebranded and relaunched its range of coffee bags. The brand’s packaging has been given a more modern look, and the flavours have been updated. They are now called Go-Joe, Decaf

Lyons has given the range more modern packaging

Dreams, Perkadilly and Rokadero. “We didn’t want Lyons to be too serious, so we went back to the roots of the brand,” said UCC Coffee commercial director Marcus Swift. “We’ve done a lot of work on the taste profile.” The bags themselves have been switched to a new sustainable, plantbased material, meaning they are now fully compostable. Packs have also been brought down in size from 18 to 10 bags (rsp: £2).

46 | The Grocer | 1 February 2020

KP Snacks is taking Tyrrells into nuts. The posh crisp brand, which KP purchased from The Hershey Company in 2018, has unveiled a duo of Nut Medleys – Sea Salt & Ground Black Pepper and Sweet Chilli & Red Pepper – both of which contain roasted almonds and cashews, as well as crunchy corn and fava beans (rsp: £3/100g-105g). The latter also includes pieces of red pepper. KP said it wanted to “capitalise on Tyrrells’

Sea Salt & Ground Black Pepper is on sale for £3

premium credentials and the growth potential in nuts”, while targeting “the premium sharing occasion”. The brand has also relaunched its popcorn range “to deliver a touch of indulgence, whilst

remaining a permissible option”, said KP. Its Sweet & Salty popcorn has been reformulated with sea salted caramel, while its Sweet popcorn has been reformulated with vanilla extract from Madagascar. The recipe for its third flavour, Salted, has not changed, but it has been renamed Sea Salted (rsp: £1.90/90g). The relaunched range “has a premium proposition but is also fun and light-hearted”, said Tyrrells marketing manager Sarah Lawson.

Get the full story at thegrocer.co.uk

grocery digest

Battle of the bog rolls: own-label sales beat brands for first time Daniel Woolfson Own-label toilet roll sales have overtaken branded sales, for the first time in Kantar’s records. Toilet roll brands added a collective £8.9m in value last year, data reveals, rising 1.4% to £664.9m. But they were vastly outstripped by supermarket rolls, which grew sales by £68.2m to £691.9m – a 10.9% increase [Kantar 52 w/e 6 October 2019]. “We’re seeing growing demand in premium products but they have to be at the right price,” said WEPA UK sales director Carl Mitchell. “The price differential between branded and own-label toilet tissue is absolutely massive... in

brands, the majority of own-label growth this year can be attributed to rising average prices – up by 2.6% since last year.” Meanwhile, new products “that differentiate this commoditised market are no longer limited to the big brands – cocoOwn-label loo rolls saw a nut oil toilet paper can 10.9% increase in sales be found amongst both Tesco and Asda’s ownmost cases now you can buy a premium own-label label ranges”, she added. Brands that perproduct for less than you formed particularly would spend on a standwell included the likes ard branded product. of Cushelle (up 22.1% to “Shoppers are natu£92.8m), Cheeky Panda rally attracted to that (up £363k to £463k), and idea of trading up while category leader Andrex spending less money.” (up £11.8m to £361m, but However, said Kantar on flat volumes) [Nielsen analyst Julia Fine: 52 w/e 7 September 2019]. “Although own-label lines are traditionally Focus on Household p53 less expensive than

Starbucks adds ‘intense’ duo of RTDs

Ben & Jerry’s adds cookie dough bites Ben & Jerry’s has launched the cookie dough chunks from its cookie dough ice cream on their own. The Unilever-owned brand said ice cream fans had been “calling out and asking us to ‘free the chunks’”. They have hit the freezer aisle at Asda (rsp: £4/170g). Get the full story at thegrocer.co.uk

Starbucks has launched what it claims are its “most intense” Doubleshot RTDs yet: Doubleshot Intenso Black and Intenso Dark. Both combine Fairtrade Colombian arabica coffee with Starbucks’ Signature Espresso Roast and green coffee extract. The latter includes “a splash of milk”. Starbucks said the duo “takes coffee to the next level”. They roll into Sainsbury’s next week (rsp: £1.99/220ml).

Bottleshot cold brews: Bottleshot Brew has added Cold Brew Oat M*lk to its range of cold brew coffees. The drink is made with arabica cold brew coffee, oats, water and potassium carbonate. It will hit Waitrose from 1 March (rsp: £2.50/250ml). Pink Gin 1689: Gin 1689 has unveiled a pink tipple called The Queen Mary Edition. The drink (38.5% abv) is based on the same recipe as the original Gin 1689 and had been “designed to reflect the 17th century” (rsp: £37.95/70cl). Love Drinks & Pedrino: Booze distributor Love Drinks has signed up to distribute Pedrino Spritz in the UK. The brand’s trio of 5.5% cocktails are: Vermouth & Tonic, Sherry & Tonic, and Vermouth & Tonic (rsp: £1.95/200ml). London to Lima liqueur: London to Lima has unveiled a mulberry & coca gin liqueur. The spirit (36.8% abv) is macerated with mulberries and includes Amazonian Coca leaves and wild honey. It will roll out in three sizes: 70cl (rsp: £48), 20cl (rsp: £17) and 5cl (rsp: £6). Weetabix ad: Weetabix is launching a new TV advert on Monday 3 February as part of its ongoing £11m marketing push. The advert shows “a little girl who’s ‘had her Weetabix’ fishing at the beach and hooking the most surprising thing you could imagine – a navy submarine”. Baked by Rich: Rich Products has unveiled a new range of thaw-and-serve and bake-off bakery products called Baked by Rich, comprising cookies, muffins, buns, shortbreads and pastries. Kit Kat Senses trio: Kit Kat has expanded its Senses range with a trio of new biscuits: Salted Caramel, Millionaires Shortbread and Choc Chip Cookie Dough. They hit Morrisons this week (rsp: £1.99/5x22.8g). Jackson’s hot cross buns: Jackson’s of Yorkshire is to launch its first hot cross buns exclusively at Waitrose. The hot cross buns are “premium, hand-finished and tea-infused” and have “one of the highest fruit contents on the market”. They will roll out this week (rsp: £1.89/ four-pack). Bay Tree sauces & jams: The Bay Tree has added a swathe of vegan sauces and cocktail-inspired jams. The vegan sauces are mayonnaise, tartare, hollandaise and sriracha (rsp: £2.60-£2.85/175g). The cocktail preserves are: Berry Cosmopolitan, Mango Passion Mojito and Strawberry Love Potion (rsp: £2.75-210g).

1 February 2020 | The Grocer | 47

buying & supplying drinks

acid test

Whisky makers urge government to put end to US tariff war Harry Holmes The Scotch Whisky Association has joined forces with the European and US whisky industries to urge an end to the transatlantic tariff war. SWA CEO Karen Betts met with MPs and government officials this week to implore the UK government to urgently negotiate a solution to the trade dispute. Scottish whisky was among a raft of products hit by US tariffs in October, in retaliation for illegal EU subsidies to aircraft manufacturer Airbus. It caused Scottish single malt exports to the US to fall by a third against the same period the previous year.

Exports of scotch were hit by US tariffs in October

“Many smaller scotch whisky companies are now asking themselves how they can continue exporting to the US, whether they can build up alternative markets, and if not, how their businesses will cope,” said Betts. It follows meetings on Monday between SpiritsEurope, the Distilled Spirits Council

of the United States (DISCUS), and EU and US officials in Brussels to encourage officials to open talks. SpiritsEurope director general Ulrich Adam said “no concrete proposals” were discussed, but there appeared to be “a genuine wish on both sides to rebuild the relationship”. Since October, the White House has signed a new NAFTA agreement, a ‘phase 1’ deal to ease the Chinese trade war and a new US-Japan trade deal. DISCUS VP Rob Maron said he hoped this would allow the focus to turn to Europe. “With three important wins for the Trump administration they will be able to pivot towards Europe,” he said.

New Product Awards 2020: entries open

Bira 91 craft trio to make debut in UK

Entries are still open for The Grocer’s New Product Awards 2020. But the deadline of 24 February is fast approaching for our

Indian craft beer Bira 91 is coming to the UK. The brand, which sponsored the ICC Cricket World Cup last year, will debut a trio of brews in 330ml bottles from April. They are: Blonde Lager (4.5% abv), White Ale (4.7% abv) and Indian Pale Ale (4.5% abv). Bira 91 founder Ankur Jain said drinkers were “opting for a more fun, relaxing beer drinking experience that doesn’t compromise on quality, taste and experience”. Retail listings are yet to be confirmed.

awards, which celebrate innovation in grocery. The awards span 37 categories, encompassing everything from alcoholic drinks to household goods. To be eligible for entry, products must have been introduced or developed from 1 January 2019 to 24 February 2020. All entries must be new to the UK. Winners will be announced at London’s Grosvenor Square Marriott, on 9 October. For more information, visit thegrocernewproductawards.co.uk.

Get the full story at thegrocer.co.uk

33/50 Overall score

Troo Granola

Overall score: 33/50 Who: Troo What: Troo Nicely Nutty with Cinnamon Granola Where: Cereals How much: £4/350g Why: Troo bills its granola as “the perfect guthealthy start to the day”. It is made with jumbo oats from Cambridge, “lightly spiced” with a “cinnamon-boosted” spice blend, and sweetened with chicory root fibre. Per 100g, the NPD contains 464 calories, 20.6g fibre and 15g protein. It is also suitable for vegans and is gluten-free.

Consumer verdict: Fifteen per cent of shoppers gave the granola five stars, with reviews including that it had a “strong cinnamon taste and nice amount of nuts”. But several shoppers said it was too expensive, with 43% saying they would only buy it on special offer. Despite this, its paper packaging received high praise. One shopper said “I appreciate the plastic-free packaging” while another said “I noticed that this product is plasticfree which is great”. Six per cent of shoppers gave the granola one star, with feedback that the cinnamon flavour was “overpowering”, “artificial” and “too strong”. Pre trial purchase:

46%

Post trial purchase:

13%

Better than what’s out there:

33%

Exciting new idea:

44%

All own-label lines reviewed for Acid Test can apply for accreditation in The Grocer Own Label Accreditation Scheme. For more information visit thegrocerownlabel.co.uk Acid Test is conducted by Cambridge Market Research using its Fast Foodfax methodology, which has developed consumer assessments of new products for more than 30 years. Fast Foodfax compares results against a database of more than 25,000 products across 130-plus categories of food and drink. Objective, impartial and totally independent, contact 01223 492050 or visit www.cambridgemr.com for more information

1 February 2020 | The Grocer | 49

LABEL LOOKALIKES Harnessing the synergies between the two businesses in such a challenged market is a sensible move – Dairy industry source

buying & supplying fresh

New Freshways labels point to Medina tie-up Kevin White Mid-market liquid milk processor Freshways has adopted the branding of rival Medina’s Watsons milk brand, in a sign of the deepening relationship between the two businesses. Its milk bottles are now being distributed in bottles using a similar packaging design to the Medina brand, depicting an image of a cow surrounded by lettering shaped in a circle. Talks of a merger between the businesses first emerged in the wake of the collapse of Welsh processor Tomlinsons in October. However, Freshways MD Bali Nijjar dismissed the suggestion as “rumours” in November. Instead he

the sector, Medina Dairy is continuing to identify opportunities to maximise efficiencies and take out costs from its processing operations and distribution network. “These include working with Freshways and other milk suppliers on a number of initiatives, including undertaking contract packing for each Freshways’ new branding uses a similar design to Watsons other and leveraging our respective distribution networks.” inside the M25 were now explained that the two Medina and Freshbusinesses were collabo- being supplied through ways’ combined turnover rating on “some contract the Freshways network, topped £380m in their while the Medina netpackaging and swaps”. most recent accounts. However, the new brand- work was used to supply However, combined preing points to a closer rela- customers outside the M25, said one wholesaler. tax losses were £4m. tionship with Medina. Medina’s contract to A Medina spokesman The Grocer also undersupply Sainsbury’s is said: “Against the backstands the processors due to end this summer. have divided up their dis- drop of a challenging Freshways declined to fresh liquid milk market tribution network. Many Medina customers based and in line with others in comment.

Happy Egg Co will push eggs’ vitamin D credentials

Happy Egg Co kicks off £1m TV campaign Noble Foods brand the Happy Egg Co has returned to TV screens for the first time in three years with a £1m vitamin D-themed campaign. Launched on 29 January, the ‘Stay sunny’ animated ads are partnered with ITV’s popular breakfast programmes. The 10-second-long executions will talk up the health credentials of eggs, encouraging consumers to view them as a more reliable source of vitamin D than the British weather.

Bill to end automatic Co-op to cut level of nitrites in EU access to fishing own-label bacon range by 60% The automatic right of EU vessels to fish in British waters will end under the Fisheries Bill introduced in parliament this week. The new legislation states the government will be free to negotiate access for foreign vessels

EU will lose automatic right to fish in British waters

to British waters after the UK quits the EU’s Common Fisheries Policy in December. Environment secretary Theresa Villiers said the bill “takes back control of our waters”. However, Luke Pollard, Labour’s shadow environment secretary, said the new bill left British fishing vulnerable in EU trade talks. “What this bill does confirm is that the future of fishing will be determined not by this new law but by the EU trade negotiations,” he said.

50 | The Grocer | 1 February 2020

The Co-op is to cut the amount of nitrites used in its own-label bacon lineup by 60%. The retailer said the move was the first of its kind by a major UK supermarket. It would have no impact on the quality of its bacon or the price paid by consumers, it stressed. Working with supplier Tulip, the Co-op will cut nitrite usage across 24 fresh British bacon SKUs in 2020. It started rolling out reduced nitrite bacon on 11 core lines in late January, while a further

Nitrites have come under scrutiny in recent years

13 premium lines would be introduced later this year. Tulip said it had reduced nitrites in the brine it used to cure pork, without having to use another additive. Nitrites are required for both preservation and to

produce the typical flavour, taste and colour characteristics of bacon. However, its use has come under increasing scrutiny in recent years due to its link to cancer. The Co-op’s move follows the launch of a range of nitrite-free bacons by processor Finnebrogue, under its Naked Bacon brand in 2018. But removing nitrites completely “would not produce the quality of bacon customers are used to”, suggested Tulip customer director Zoe Bruce.

Get the full story at thegrocer.co.uk

fresh digest

Food industry warns new migration report ‘doesn’t go far enough’ Henry Sandercock Salary thresholds for migrants in a post-Brexit skills-based immigration system should be lowered, according to the independent Migration Advisory Committee. However, food industry bodies have warned the committee’s proposals, published this week, have not gone far enough to tackle its growing labour crisis. The MAC’s report suggested dropping the current threshold for immigrants seeking to permanently live and work in the UK by £4,400 to £25,600. But it warned any new system would have to be introduced soon to give employers a sufficient period to adjust

Food sector: dependent on workers of ‘all skill levels’

to “substantial changes”. Reducing the minimum salary threshold would be “a step in the right direction”, said Food & Drink Federation COO Tim Rycroft. His comments were echoed by the BRC, which stressed the food sector depended on workers of “all skill levels”. But further down the supply chain, BMPA CEO

Nick Allen suggested the report did not address the meat sector’s concerns, as he stressed businesses needed “clarity on the final immigration system”. Reducing net migration did not always go “hand in hand with satisfying the needs of the economy”, he added. “We have been struggling to find enough staff, particularly workers from the UK.” The BPC said the proposed methodology of skill and salary thresholds would hit the poultry sector the hardest. MAC’s report considered food manufacturing jobs as “low-wage positions that require little training”, said a BPC spokeswoman.

Play up antibiotics work, mults urged

Animal abuse alleged at Hoads Farm

Supermarkets need to do more to communicate the work they do on antibiotic reduction in their supply chains, a study by the Alliance to Save Our Antibiotics has claimed. Co-op, Lidl, M&S, Sainsbury’s, Tesco and

Concerns over animal welfare in the egg sector have surfaced again, following undercover footage alleging abuses at an East Sussex egg farm. Footage by campaign group Direct Action Everywhere appeared to show chicken corpses left for “many months” at Hoads Farm, as well as sick and wounded birds. The farm said it had launched a “full investigation” into the allegations. It has also been suspended by Red Tractor and RSPCA Assured.

All retailers could improve transparency, said ASOA

Waitrose now had bans on their suppliers using antibiotics routinely for disease prevention, the Alliance’s report said this week. Morrisons had a ban in some species, while Aldi recommended routine use be avoided. The ASOA singled out Asda and Iceland for having no restrictions other than minimum legal requirements. Both stressed they did have detailed policies. The report also suggested all retailers could improve transparency on their antibiotics work.

Get the full story at thegrocer.co.uk

NFU rally: The NFU has organised a rally aimed at getting the government to commit to not importing food produced below domestic standards after Brexit. Taking place in Westminster on 25 March, the protest will call for British farming’s “world-leading standards” to be safeguarded. Efra reappoints Parish: Tory MP Neil Parish has been reappointed as chair of the Environment Food and Rural Affairs Select Committee. He will take up the role again once the rest of the committee has been appointed. Yorkshire wagyu: Aldi has begun selling wagyu beef burgers sourced from cows reared in Yorkshire. The burgers are said to offer an “intensely rich and buttery soft” texture comparable with Kobe wagyu (rsp: £2.99/two-pack). Asda fishes out plastic: Asda has launched an initiative aimed at reducing ocean plastic waste. Its ‘Fishing for Plastic’ scheme will see more than 500 of its fish suppliers’ vessels in the UK, Norway and US equipped with bags to collect plastic. Graham’s skyr: Scottish dairy brand Graham’s has launched an ‘on-the-go’ skyr into Tesco and Sainsbury’s. It will come in three pouched variants: Passionfruit, Mango & Papaya and Raspberry & Superberry (rsp: £1/150g). Insta-Vitalite: A new social media push from Vitalite is aiming to establish the dairy-free spread’s presence on Instagram. ‘Viva La Vitalite’ will take cues from the brand’s 1980s ad, with its dancing sunflowers making a comeback. Batchelors Super League deal: Batchelors Peas has renewed its partnership with rugby’s Super League. The canned peas brand will appear on matchday programmes, pitch perimeter boards and competition backdrops at over 180 games. Listings for Biotiful kids kefir: Biotiful Dairy has expanded listings for its kids kefir range following its initial launch into Morrisons in November 2019. Sainsbury’s, M&S and Waitrose will all sell the products nationwide, while Morrisons will extend the cultured milk brand’s listing. Butterworks at M&S: The Butterworks has gained listings in Welsh M&S stores. The Caerphilly brand claims its butter (rsp: £1.90/250g) is 50% softer than standard rivals. Two Chicks organic: Two Chicks has launched an organic version of its free-range liquid egg white product. It promises to be high in protein and low in cholesterol (rsp: £4.50/500g).

1 February 2020 | The Grocer | 51

focus on... household 54 Own label boost

57 Rise of the challengers

62 What’s new in the loo?

Own label is seeing strong growth in household and paper products – but brands are fighting back

Well-established household brands are struggling as retailers push challengers on shelf

Andrex’s Skincare toilet tissue leads our lineup of household products NPD

The household evolution It’s survival of the fittest in the price-led household market. As own label gains ground, brands are having to evolve to survive Ash O’Mahony

hen Charles Darwin published his theory of evolution, he probably wasn’t thinking about loo roll. Yet many of his principles could easily apply to today’s household market. Because in this increasingly competitive environment, a survival of the fittest scenario is emerging. No longer can brands simply trade on being a big name. In this price-driven environment, they are needing to evolve to justify their price premium over own label. Those that don’t are suffering hefty declines. The figures say it all. At a first glance, brands may appear to be doing marginally better than last year, when value edged up just 0.1%. But this year’s 0.6% growth belies a 2.5% decline in volume [Kantar 52 w/e 6 October 2019]. Even the biggest names Get the full story at thegrocer.co.uk

aren’t safe. The market-leading brands are in decline in every area of household apart from toilet paper. Own label, by contrast, is flying. Retailer ranges delivered more than 80% of the £125.8m extra household sales this year, leaving brands with less than 20% of that figure. It’s the third consecutive year that own-label growth has outpaced that of brands, which are suffering from “a decreasing share of spend”, says Kantar analyst Julia Fine. Still, brands are determined not to take that

“Shoppers know they can get quality, highperformance products from own-label ranges”

lying down. They are increasingly trading on added-value credentials – environmentally friendly claims, premium cues and even Mrs Hinch recommendations – to beat the relentless rise of cheaper alternatives. So can brands evolve to win back shoppers? Or will they ultimately prove not fit enough to survive? There’s no doubt own label is in the strongest position at the moment. Its crucial advantage is price. Although own-label prices have increased 2.6% in the past year, they are still significantly cheaper than brands, which themselves saw a 2.9% price increase. This price differential is particularly noticeable in certain areas of the market. In toilet roll, for example, a branded pack is on average £1 – or 40% – more expensive than its own-label equivalent. Shoppers can pick up an own-label fabric conditioner for roughly half the price of a branded version, and 1 February 2020 | The Grocer | 53

focus on... household

Own label boost: household & paper products value sales

Toilet tissues

Machine wash products

£1,356.8m

£930.9m

(▲ 6%)

Air freshener & candles

(▼ 1.3%)

Other household

£855.4m

Washing-up products

£492.6m

(▼ 0.4%)

(▼ 0.6%)

Household cleaners

Fabric conditioners

Kitchen towels

£452.8m

£451.5m

£395.5m

(▲ 2.2%)

(▼ 2.0%)

(▲ 2.8%)

£489.5m (▲ 3.8%)

Brands vs own label

Branded

Own label

£4,266.6m

£2,208.2m

(▲ 0.6%)

(▲ 4.8%)

Source: Kantar 52 w/e 6 October 2019 ● Household and paper products have been subject to roughly the same trends seen in wider grocery over the past year. Most notably, own label is still outperforming brands. ● Key to own label’s success in household has been paper products, with kitchen roll and toilet paper sales up more than 10% in value thanks to volume sales growth and higher average prices. ● There are markets in which certain brands are winning, however.

For the full data, visit thegrocer.co.uk

Branded limescale removers and toilet care both outperformed their own label equivalents with 22.1% and 4% value growth respectively, driven in part by the recruitment of younger shoppers. ● Branded cleaners and bleaches are also seeing strong growth, bolstered by eco-friendly brands like Ecover and Method. Such

brands are well-placed to continue benefiting in the year ahead as plastics and the future of the planet become more influential on shoppers’ purchasing decisions, says Kantar analyst Julia Fine. ● Several retailers have maintained their category dominance, particularly Savers, Wilko and the bargain stores.

Kantar’s Worldpanel FMCG service monitors consumer behaviour across Great Britain. Its primary panel tracks take-home purchases of 30,000 demographically representative households. Data on consumption habits, nutrition and out of home sales is collected through subsidiary panels. Visit kantarworldpanel.com for details.

54 | The Grocer | 1 February 2020

“The quality of own-label toilet roll is now absolutely comparable to branded products” own-label kitchen towels are nearly 30% cheaper than their branded counterparts. Despite their relative affordability, ownlabel products are no longer considered the poor relation of brands. “Shoppers are now accustomed to the idea that they can get quality, high-performance products from ownlabel ranges, and they are prepared to pay a high price – though not as much as they would need to pay for a branded equivalent,” says Kantar’s Fine. A tipping point So it’s no surprise that certain areas of the market have reached a tipping point. In toilet paper, own label has taken a larger market share than brands for the first time in Kantar’s records, holding 51% of total value. That was thanks to a 10.9% increase in own label sales, while brands edged up just £1.4%. Retailer offerings have won over shoppers through “high-quality products at the right price” says Carl Mitchell, sales director at WEPA, the UK & Ireland’s biggest own-label paper supplier. “Over the past two years the quality in own-label toilet roll has improved to the point where it is now absolutely comparable to branded products. “In most cases you can now buy premium own-label toilet paper for less money than you would spend on standard branded toilet paper,” he adds. “Shoppers are naturally attracted to that idea of trading up while spending less.” That value-driven mindset means cheaper retailers are performing well. Aldi and Lidl are doing a roaring trade in household, with respective value increases of 11.8% and 15.6%. Their focus on own label has been a further dent to brands. Bargain stores and Savers were also among the fastest-growing retailers in household this year, with respective value gains of 7.5% and 15.6%. But here, there is a glimmer of hope for brands: they make up the majority of SKUs on bargain store shelves. Cleaning brand Astonish has seen the benefits first-hand. “Our highest rate of sales come from B&M and Home Bargains because at the moment they have the highest footfall of household shoppers,” says commercial director Mark Winter. Plus, Astonish has a further point in its favour: it’s one of the brands backed by ‘cleanfluencer’ Mrs Hinch. With 2.4 million

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focus on... household

Rise of the challengers: top surface care and detergent brands by value ● Well-established names in household have struggled as retailers reduce their shelf space in favour of challengers with a point of difference. ● In surface care, Cif suffered the biggest loss of the year, with sales down £4.5m on volumes down 11.1%. That’s despite the launch of its plastic-reducing EcoRefill product in July – though the brand plans to build on the range in the year ahead. ● Meanwhile, Method delivered the largest gain in the surface care category, up £4.8m to become the fourthlargest brand. ● The big names are also suffering over in laundry. Persil, Ariel and Bold shed a combined £20m in the mults, largely driven by shoppers moving away from the supermarkets. ● However, brands with the right credentials are growing in the mults.

Fairy delivered a £2.2m gain as it traded on natural credentials. ● Ecover delivered similar gains. Value sales grew 15.3%, equating to an extra £2.1m and making it the eighthbiggest brand. ● A key driver of those extra sales has been Ecover’s Zero range, which has no fragrances, allergens or colourants. It accounted for 60% of Ecover’s growth in detergent this year, according to the brand. ● The rise of Ecover and Method shows the power of brands that follow the sustainability trend. They drove engagement with shoppers and were rewarded by more space on shelf, says Nielsen analyst Livio Capurso.

Top five surface care brands

Dettol (▼ 1.3%)

£67.6m Flash (▼ 3.0%)

£58.2m Cif (▼ 11.8%)

£34.0m Method (▲ 32.9%)

£19.2m Mr Muscle (▼ 15.0%)

£18.2m Top five detergent brands

Persil (▼ 5.2%)

£180.0m Ariel (▼ 3.0%)

£154.6m Fairy (▲ 1.8%)

£120.1m Bold (▼ 5.0%)

£95.1m Nielsen Scantrack monitors weekly data from a national network of EPoS scanners to represent sales in grocery multiples, co-ops, multiple offlicences, independents, forecourts, convenience multiples, symbols and online grocery retailers.

Instagram followers, Sophie Hinchliffe holds plenty of sway in household purchasing decisions. Of the consumers who are aware of her, 60% would buy a product solely based on her recommendation, according to exclusive research for The Grocer by Harris Interactive in May. Minky M Cloths, Zoflora and The Pink Stuff have all experienced sell-out periods as a result. The Pink Stuff reports 3,000% value growth over the past year, driven “primarily by the effect of social media”. Mrs Hinch is attracting younger shoppers to the aisles, too. “The growth of influencers talking about cleaning has resulted in a much younger demographic starting to take an interest in home cleaning and innovative cleaning products,” says Laura Marsden, product manager at Marigold, whose gloves are backed by the social media star. The bargain stores were particularly quick to capitalise on that selling power. Savers, for example, put together a special display of Mrs Hinch recommended products early last year. Now the major mults are following suit with

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Surf (▼ 3.8%)

£94.9m Source: Nielsen 52 w/e 7 September 2019 For the full data, visit thegrocer.co.uk

Hinch-backed listings and displays. The Pink Stuff gained space in Sainsbury’s in March. Its sister brand Stardrops, also owned by Star Brands and backed by Mrs Hinch, went into Asda in August. Asda has since rolled out a special ‘Mrs Hinch recommends’ section in its household aisles (complete with eyecatching point-of-sale material featuring the influencer in an Asda uniform). Even P&G has got in on the act with special PoS material for products that have earned the Mrs Hinch seal of approval, such as Febreze fabric spray and Lenor Unstoppables. Considering the amount of loyalty commanded by ‘cleanfluencers’ it’s a pretty foolproof strategy. Still, not every brand is lucky

“Influencers have resulted in a younger demographic taking an interest in cleaning”

enough to have the backing of social media stars. In which case, they have to prove their worth in other ways – and that means bringing out the big guns on the innovation front. As Reckitt Benckiser global strategy director Jos Harrison puts it, “simply designing a communicative pack for the shelf is not enough any more, and neither is functional excellence”. Brands have to offer something different to justify a premium over own label. Posher propositions are one way to stand out from the crowd. See toilet paper. Market leader Andrex managed to outperform fellow brands with a 3.4% increase to £361.5m [Nielsen 52 w/e 7 September 2019] thanks entirely to higher prices – a sign of its relentless focus on premiumisation. This focus has largely centred on its Supreme Clean premise, which encourages customers to use its premium tissues in conjunction with its washlets. The latest iteration of this strategy is the October launch of Skin Kind, a “first of its kind” range of toilet roll and washlets imbibed with a prebiotic lotion (see p62) that claims to maintain 1 February 2020 | The Grocer | 57

focus on... household

Posh versus economy: top five toilet tissue and kitchen roll brands by value ● Premiumisation and sustainability are the two key drivers for growth across the toilet tissue category this year. ● The most common factors behind the branded sales decline are a lack of innovation, lower distribution support from retailers and the increased presence of own label. ● Consolidation in the market has continued across all sectors, with some smaller brands losing distribution to new brands that better align with current trends and consumer needs. ● The biggest loss and greatest gain in toilet tissue this year come from Essity’s Velvet and Cushelle respectively, as the former brand is gradually replaced on shelf by the latter. ● There’s a reason that Velvet is being scaled back by its owner. “Cushelle is made using a unique technology

that creates cushioned fibres that our customers really see the benefit of, whereas Velvet is a conventional product,” says Nicola Coronado, marketing director for Essity UK & Ireland. “Velvet is similar to other brands in the market, so we’ve made a strategic re-shift in our portfolio.” ● In kitchen roll, it is value brands that are enjoying the greatest gains. The only players to achieve both volume and value growth, Mega and Euro Shopper, have the lowest average prices. ● Premium kitchen roll brand Regina saw volume sales slump 4.7%, meaning its £824k value growth was entirely driven by price hikes.

Top five toilet tissue brands

Andrex (▲ 3.4%)

£361.5m Cushelle (▲ 22.1%)

£92.9m Velvet (▼ 52%)

£26.1m Petal Soft (▲ 3.6%)

£18.3m Nicky (▼ 7.9%)

£10.3m Top five kitchen roll brands Plenty (▼ 1.8%)

£87.3m Regina (▲ 1%)

£84.6m Nicky (▼ 16%)

£4.1m Mega (▲ 18.5%)

£3.7m Nielsen Scantrack monitors weekly data from a national network of EPoS scanners to represent sales in grocery multiples, co-ops, multiple offlicences, independents, forecourts, convenience multiples, symbols and online grocery retailers.

the skin’s natural balance. The range is being supported by Andrex’s first nationwide marketing campaign in a decade, spanning TV, PR, in-store, digital and social media. “There’s increasing consumer demand for premium paper products that offer more than a basic experience, which is why we developed Skin Kind,” says a spokeswoman for the brand. Other big players are taking the same view. Essity, for example, is scaling back its Velvet brand to concentrate on its Cushelle proposition, which is taking an increasingly premium direction. Last January, Essity replaced its two-ply Cushelle Quilted range with new three-ply Ultra Quilted. According to the brand, the upgraded range amassed £26.4m in its first year, up 29% on the year before. This kind of innovation is crucial to surviving the competitive market, says Nicola Coronado, Essity marketing director for the UK & Ireland. “To be successful in the current environment, brands need to offer something distinctive, differentiated and superior to what’s already on shelf.”

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Euro Shopper (▲ 15.4%)

£2.4m Source: Nielsen 52 w/e 7 September 2019 For the full data, visit thegrocer.co.uk

That’s not just true of the toilet tissue market. Other areas of household have also been active on this front. In aircare, December saw the launch of Febreze Bathroom Air Fresheners, a three-strong range touting “unique technology” that eliminates odour and prevents it lingering on towels and bath mats. The range has already gained listings in Asda, Wilko, Home Bargains and B&M. Over in toilet care, Bloo rolled out Fragrance Switch, a premium toilet rim block that changes scent when it comes into contact with water, in February. Bloo claims the NPD was a key contributor to its £2.2m sales growth over the past year [Nielsen 52 w/e 7 September 2019]. Domestos launched a

“To be successful in the current environment, brands need to be distinctive & superior”

similarly premium toilet rim block Platinum 5, which promises “intense cleaning and freshening with added active blue water”, in December. Domestos owner P&G clearly sees a future in higher-priced fare. Last January, it gave its Fairy brand the same treatment with the launch of ultra-premium Fairy Platinum Plus dishwasher tablets. And its dishwasher range looks in healthy shape, with sales up 13.1% to £70.3m [Nielsen]. The premiumisation tactic can boost sectors that have a high penetration, says Ian Morley, group sales director at P&G for Northern Europe. “The only way we can ever really grow these categories is by delivering a superior consumer experience with premium products that command a higher cost per use,” he explains. And premium doesn’t just mean posh. Brands with environmental cues are also able to command a higher price – plus a strong point of difference against own label. Ecover and Method, the largest ecobrands on the market, are proof of just 1 February 2020 | The Grocer | 59

focus on... household

Shoppers open to posh loo roll ● Nobody wants to run out of toilet tissue. So it’s hardly surprising the sector is home to the highest amount of planned purchases across paper products – with 89% of shoppers planning to buy. ● Toilet tissue shoppers are more likely to trade up than those who buy facial tissue and kitchen roll. This creates “an opportunity to up-sell premium products like moist toilet tissue in store” says Jeremy Garlick, partner at Insight Traction. ● Facial tissue is the most impulse-driven sector in paper products. That makes high visibility crucial for the sector, Garlick says. ● Putting facial tissue next to toilet tissue could encourage those impulse purchases, Garlick adds.

How do consumers shop paper products? GROCERY AVERAGE 100% 75%

76%

87%

76%

75%

25%

100%

75%

29%

33%

45%

25%

34%

25%

50%

42%

“The challenge is to create something ecofriendly, but better than what’s out there”

37% 15%

19%

I DON’T MIND PAYING FOR SOMETHING BETTER

Source: Shopper Intelligence survey of more than 77,500 shoppers

bamboo-based paper products have already secured space in WH Smith, Boots, Holland & Barrett and Superdrug. Co-founder Chris Forbes says new listings in the mults are “expected later this year”. “We’re in the process of rolling out new plastic-free packaging across the range, and we’re also vegan, cruelty-free and a B-corp,” he adds. Consumers seem willing to pay more for these credentials. Nielsen data puts The Cheeky Panda as one of the most expensive toilet roll brands in the top 25, yet sales have more than quadrupled to £463k. Its facial tissues have increased nearly 10-fold to £161k, and its kitchen towel sales have gone from virtually non-existent to £43k. This fast-paced growth has inspired the

10%

DECIDED TO BUY WHEN IN STORE

25%

PLANNED TO BUY A PARTICULAR BRAND

21% 9%

PLANNED TO BUY THE CATEGORY BEFORE I CAME TO STORE

50%

KITCHEN ROLL

100%

50%

how successful these propositions can be. As the top surface care brands faced hefty declines (see p57), Method delivered a £4.8m gain in its range [Nielsen]. It’s also making headway in detergents, fabric conditioners and liquid soaps. Ecover is similarly climbing up the rankings. It is now the third brand in the hand dishwash and auto dishwash categories, and the eighth brand in the highly competitive laundry detergent sector. Sales of its detergent have shot up £2.1m to £16.2m. “We’ve seen significant distribution gains across the major mults, as well as increased shelf space and better positioning with parent categories rather than in eco-specific bays,” says Ecover brand manager Charlotte Snelgrove. The headway made by the likes of Ecover is paving the way for smaller eco-brands. Take the Ecoegg, which acts as an environmentally friendly alternative to detergent and fabric conditioner – and promises to cost just 14p per wash. The brand gained its first major listing with Waitrose in July and claims to have doubled sales in the past year. Then there’s The Cheeky Panda, whose 60 | The Grocer | 1 February 2020

89%

TOILET PAPER

50%

Shopper Intelligence is an annual multi Category, multi Retailer survey of UK shoppers. Enquiries to www.shopperintelligence.com.

FACIAL TISSUES

For the full data, visit thegrocer.co.uk

mainstream brands to bring out their own eco-friendly launches. Bloo rolled out Pronature, its first 100% recycled and recyclable rim block, in October. Dettol and Cif both introduced refill products to cut down on plastic waste in April and July respectively. The latter’s two-strong range of concentrated Kitchen and Bathroom solutions “aims to remove 1.5 million plastic bottles from the waste stream”, says Charlie Beevor, VP of home care at Unilever UK & Ireland, who reveals the brand will be looking to build on the success of the range in the year ahead. As the Cif range illustrates, it’s sometimes as simple as putting existing household products in new packaging. The past year has seen P&G remove the plastic handles from its large detergent boxes and Unilever unveil new 100% recycled plastic packaging across its Comfort Intense and Perfume Deluxe, and Persil Capsule Tub ranges. Andrex owner Kimberly-Clark has also signed up to Wrap’s UK Plastics Pact, which pledges to create “a circular economy for plastics” through more recycling and collaboration. Such efforts should be praised, says Get the full story at thegrocer.co.uk

focus on... household

“The challenge is to create something ecofriendly that is better than what’s out there” The Cheeky Panda’s Forbes. But he has a word of warning on the innovation front. “People want sustainable products, but they don’t want to compromise on quality,” he says. “The challenge for brands is to create something that’s eco-friendly, but also as good as or better than what’s already out there and competitively priced.” That’s one reason own label may struggle to replicate eco-friendly cleaning products. Adopting environmental credentials would force retailers to “put their price tags at a similar level to brands”, says Forbes. That retailers have largely shied away from sustainable credentials suggests he has a point. Yet Tesco suggests an own-label option could work. At the end of 2017, the supermarket launched its own Eco Active range of cleaning products that promised to be “at least 50%” cheaper than branded equivalents. More than two years on, the products have become a permanent fixture, and Tesco says sales of eco-cleaning products have risen 80% at a total level. Own label evolution Environmental cues are just one fledgling area for own label. For retailers are increasingly venturing into the growth areas identified by brands. The discounters are increasingly trading on premium cues, for example. “Lidl and Aldi are offering products that sit somewhere between standard and premium tiers, but at a very competitive price,” says WEPA’s Mitchell. “We call it ‘discounter premium’, and it’s something other retailers are watching very closely.” A glimpse at the big four confirms they are watching the discounters – and, indeed, branded attempts to premiumise – very closely indeed. Sainsbury’s is selling Pink Blossom and Fresh Breeze ‘laundry fragrance pearls’, which seem to take heavy inspiration from the Mrs Hinch-recommended Lenor Unstoppables. Tesco has Luxury Soft moist toilet tissue wipes in coconut and sensitive skin variants that could give the Andrex Supreme Clean premise a run for its money (especially at a lower price). So as competition grows in the household market, it seems there is no safe area for brands. All they can do is continue ensuring they are one step ahead of the game. Otherwise they may just fall foul of the survival of the fittest rule. Get the full story at thegrocer.co.uk

Andrex Skin Kind Launch date: October 2019 Manufacturer: Kimberly-Clark Andrex says its Skin Kind range is a world first. Comprising flushable washlets (rsp: £1.75/pack of 40) and toilet tissue (rsp: £5.95/nine rolls), it is “specially designed to help build and maintain your skin’s natural balance” according to the brand. Both products feature a prebiotic lotion of argan oil, shea butter and almond butter, as well as a trademarked CleanRipple texture to remove bacteria that may cause irritation. Skin Kind “is suitable for even the most sensitive of skin” Andrex promises.

Ecover laundry Launch date: January 2020 Manufacturer: SC Johnson Ecover relaunched its sustainable laundry range at the start of the year with new formulations for all six products. The revamped lineup features fabric softener and detergents designed to “bring old clothes back to life” with 100% plant-based and dermatologically tested ingredients. Rsps range from £3.75 to £9 (1 litre to 1.5 litres).

Zoflora Midnight Bloom Launch date: January 2020 Manufacturer: Thornton & Ross Mrs Hinch fans rejoice! Zoflora, a favourite of the homecare influencer, has added to its lineup of concentrated disinfectants. Limited-edition Midnight Bloom (rsp: £1.48/120ml) combines orange blossom and oriental rose fragrances, and takes the Thornton & Ross brand’s number of variants up to 21.

Concentrated Disinfectant Launch date: February 2020 Manufacturer: Astonish Sustainable value brand Astonish is to expand its range of Concentrated Disinfectant, aimed at house-proud pet owners, with Zesty Lemon, Exotic Orchid and Morning Dew. Packed in a 500ml bottle (rsp: £2), the crueltyfree products join the Linen Fresh and Garden Bouquet variants, which launched in October last year. 1 February 2020 | The Grocer | 62

news people

I N A S S O C I AT I O N W I T H

Jon Jenkins to replace Müller as CEO of MMI Kevin White Müller Milk & Ingredients has appointed Jon Jenkins, the former MD of Allied Milling & Baking and Twinings, as its new CEO, replacing Patrick Müller. Müller, who is stepping down after just under two years in the CEO role, will continue to lead Müller’s doorstep delivery business Milk & More as CEO. He will also become coowner after buying a stake in the business. The dairy giant said he would also devote more time to his own family business – understood to be home boiler giant Vaillant – where he holds board roles. Müller joined the processor in 2012 as its UK strategy director. He

i want that job

was promoted to strategy director of the wider Müller Group in 2014. He was appointed CEO of Milk & More in 2016 – where he led a successful turnaround that saw it return to growth last year – and became permanent CEO in September 2018. The Swiss was also the architect of MMI’s

Project Darwin cost-cutting initiative, designed to save more than £100m throughout the business, following more than £230m in losses during the 2017 and 2018 financial years. Speaking at the 2020 Semex Conference in Glasgow last month, he said the processor was on

track to move back into profitability during the next six months. MMI confirmed Jon Jenkins was already in post and working “to maintain the turnaround momentum by securing the sustainable cost structures required to ensure the long-term success of the business”. Müller would work with his successor to achieve a smooth transition for the next two months, it added. Jenkins joins MMI on the back of a career of more than 30 years in the food and drink sector. He worked most recently at Associated British Foods, where in a 15-year career he led Kingsmill owner Allied Milling & Baking and Twinings.

What was your first job? A glass collector in Boulevards Wine and Beer bar in Sunderland. What’s been your worst job interview? The one where I left the interview thinking ‘that went pretty well’, only to look down and see my flies were undone… What was the first music single you bought? My Life by Billy Joel. Still resonates today. How do you describe your job to your mates? I just tell them that I make biscuits to go with great booze and that usually gets their attention. They now call me the Biscuit Baron.

What is the most rewarding part of your job? Seeing the range of Drinks Biscuits in store or in a cool bar and watching people eat them, talk about them and take photographs for social media. It’s like a dream. What is the least rewarding part? Getting to the end of a day and feeling like a failure because I haven’t done all the things I was supposed to do. What is your motto in life? Go on, give it a go. If you were allowed one dream perk, what would it be? Never to have to fill in another form. Ever. Do you have any

phobias? I have an issue with mushrooms which is a shame because I’m a massive foodie. I once ate a crazy meal at El Bulli (Ferran Adrià’s famous restaurant) and as an alternative to the mushroom course they gave me Japanese-style abalone. That’ll teach me! If you could change one thing in grocery, what would it be? To end the tyranny of thoughtless snacks. What luxury would you have on a desert island? A whole leg of jamón ibérico and several bottles of manzanilla. What animal most reflects your

Jenkins was MD of Allied Milling & Baking and Twinings

Laxey Glen Mills has been milling wheat since 1860 and is the Isle of Man’s only flour mill. The board is seeking to recruit a strategic development manager to help develop, shape and implement a compelling and credible plan for the mill for the next decade and beyond. The successful applicant will be a selfstarter with a head for numbers. Strong leadership and change management skills are also important. See p66 for details.

personality? Puppy dog. Have a go, up for anything, fall over, get up, give it another go. What’s your favourite film? The Secret Life of Walter Mitty or Big Night. One for the ‘have a go’ adventure and the other for the food and music. What has been the most embarrassing moment in your life? Every time I turn up to a restaurant with a table booked in my name and see the disappointment on the maître d’s face when I’m not that Andy Murray. Which celebrity would you most like to work with? Jay Rayner – he seems a great laugh.

my alternative cv

Andy Murray Founder, The Drinks Bakery, on Billy Joel, Walter Mitty and being mistaken for the tennis player

64 | The Grocer | 1 February 2020

Get the full story at thegrocer.co.uk

stay brilliant

Food waste app Olio hires Martin Rohleder as first sales director George Nott Surplus food sharing app Olio has appointed its first sales director, in a bid to bring more businesses on to its platform. Martin Rohleder joins from Staples Solutions in the Netherlands. He was previously commercial director at Dutch frozen food company Oerlemans Foods. “This appointment comes at an important time for the business,” said Olio co-founder Tessa Clarke. “Martin has a wealth of international commercial experience and knowledge of building sustainable partnerships in new markets. “His skills will enable us to grow the number of businesses joining the

Rohleder will help to bring new businesses onto Olio

Olio programme using the app and help support greater volumes of food sharing around the world,” she added. Olio was launched in 2015 as a local initiative in North London by Clarke and Saasha Celestial-One, both alumni of Stanford Business School. It went UK-wide the following year and is now used to

share food in 49 countries. Users take a picture of their unwanted food and list it on the app. Other users who want the food arrange pick-up over in-app messaging and collect it for free. For supermarkets, bakeries, restaurants and canteens, Olio sends volunteers to collect their surplus food on a regular or ad-hoc basis, and then lists it on the app. To date, Olio has acquired 1.7 million users globally, sharing three million portions of food, the company said. About 270 UK businesses are on Olio’s Food Waste Heroes programme, sharing more than 70,000 meals per month.

Central England Co-op appoints Peake as commercial director Central England Co-operative has appointed long-term Asda executive Andy Peake as its commercial director. Peake previously worked for Asda for almost 20 years in various roles spanning the commercial and buying areas of the retailer. As the senior director for core grocery and petrol at Asda, he had full accountability for the strategic direction and commercial delivery of these categories, being responsible for sales,

Peake was previously at Asda for almost 20 years

profit, pricing and availability. He also supported the Asda smaller-format stores. The new role at Central England Co-op will see Peake lead the product and category team and continue the

Get the full story at thegrocer.co.uk

development of its commercial strategy. “I’m delighted to be joining Central England Co-operative and cannot wait to use over two decades of experience in the retail industry to help support the great work the society is currently delivering and drive future growth and success,” Peake said. Central England Co-op is one of the largest independent retail co-operative societies in the UK. It employs more than 8,000 staff and operates from about 400 stores.

Camilla Barnard

How finding the right structure has set us up for the next stage

his is my last column for The Grocer, so I’m reflecting on how much I’ve enjoyed it and how much I’ve learned in this chapter of Rude Health’s journey. When I wrote the first column four-and-ahalf years ago, Nick and I were enjoying Rude Health’s explosive growth because of the early success of our altmilks. As we transitioned from a tiny 10-person startup to a slightly bigger nextstage business, we wondered about our ability to lead it, and take it to the next stage. Neither of us is from a traditional business background, nor has any business or management training. And we could see the need for more structure. We were both clear that communication is at the heart of everything we do, from customer feedback to quick decision making. Our solution was to take on a managing director, with the aim of introducing the “right” structure and hierarchy that would enable us to manage the phases of business growth. Four years on, we are in a good place, with clear communication throughout the team. We are more organised but not bogged down in meetings, and we are still growing. The surprise is that we no longer have an MD. In the end, the role added another layer of management, and with it a hierarchy, which in hindsight was a step too far, and tended to block the communication we were trying to improve. I lost count of the number of times that someone was surprised by a leaflet, event or meeting that they should have been involved in and only found out about after it happened. Now we have a simple, two-tier structure: a management team, and the team. Everybody reports to a member of the management team, which meets every week, so everything is aired, shared and actioned weekly. There are (almost) no surprises and everybody works together. I don’t know if we weren’t ready for this structure four years ago or that we didn’t know it was an option. Perhaps we needed to go through a different phase in order to get here. And will this structure work another four years from now? I don’t know, but Nick and I don’t worry about our lack of management skills and experience now that we are working alongside a highly skilled and experienced team – who seem to be putting up with us too. That’s the ultimate skill.

Camilla Barnard is co-founder and brand director at Rude Health. Twitter: @rudehealth

1 February 2020 | The Grocer | 65

bogof

‘Meat patch’ makes scents for carnivores Veganuary is over, and while some will be joyfully jumping off the meat wagon, others will want to keep avoiding animal products. Plant-based brand Strong Roots has unleashed the boffins. Its study of 2,000 adults found that one in six believed giving up meat was harder than quitting fags or booze, with a pathetic 33% claiming they “cannot make it through the day” without chowing down on flesh. However, the report

DONNA PUMSEY FOOD RETAIL EXPORT IMPORT & TRADE MINISTER

Strong smell: a five-pack of bacon-scented meat patches

also detailed a desire to eat less meat (43%). To ‘help’, Strong Roots has come up with a ‘meat patch’. These stick-on stinkers release a bacon scent, designed to make the wearer think they’ve already eaten some.

It’s not as mad as it sounds – Professor Charles Spence references “sensory-specific satiety” and “embodied mental simulation” – but it is a high-risk strategy: if you already reek of bacon, why not eat some?

Planters buries Mr Peanut

Could bird poo coffee take off?

US snack brand Planters has decided to move on from its famous mascot, Mr Peanut. But instead of quietly retiring him, Planters has instead bumped off its hero. A new ad shows Mr P, out for a drive with actors Wesley Snipes and Matt Walsh, swerving to avoid an armadillo. The trio end up dangling from a clifftop branch, before the snack toff sacrifices

If you want to charge more for coffee, sell beans that have been pooped out by an animal: civet and uchunari dung is particularly popular. Toff offed: Mr P signs off But mammals are so before taking the plunge last decade: head to Jacu in Westminster for a brew himself to save his pals. In a year in which a raft made from droppings of the Brazilian bird of the of cereal cartoons have same name. And bring been offed, no mascot is £30! Well, you wouldn’t safe. Be afraid, M&M’s drink cheap bird poo guys, Jolly Green Giant coffee, would you? and Loyd Grossman!

an you detect the delicious scent of freedom, mes chéris? By the time you read this (probably), we will have shed the yoke of EU imperialism and begun a brave new sovereign era, in which the choice is no longer boring old Brussels (sprouts) but hamburgers vs chicken feng shui. As the supremely articulate Priti Patel (who is expected to survive the Cabinet cull) put it: “In terms of divergence, we are not having alignment.” For Frexit, this of course means getting stuck into some serious trade talks, because some doom-mongers have alleged that swingeing import tariffs on food from our most important trading partner might pose a teensy weensy problem in the supply chain. Happily, that’s all just Project Fear and of course we have several weeks to iron out the frictions, during which your Donna will be engaged in frantic shuttle diplomacy, with the precondition that the talks will be held on the French Riviera. To offset the emissions of the Frexit private jet, good old Saino’s have pledged to ditch all of their damaging CO2 emissions by 2040. They’ve made a pretty good start in ditching Mike ‘Switched On’ Coupe, if his performance on the radio this morning was anything to go by. Anyway, in the spirit of diversity they’ve appointed a white, male former Boots executive who, to differentiate him from the white, male former Boots executive who will soon run Tesco, is not called Ken. So it’s welcome to the helm of the Holborn Titanic, Simon Roberts Radio, and let’s hope Sainsbury’s carbon pledges don’t mean there are still too many icebergs to bump into.

ad of the week: Aldi makes a splash with athletic swap campaign It’s an Olympic year – so Aldi is making the most of its Team GB sponsorship. A woman details her healthy food swaps (eg: fresh sea bass instead of a Friday night takeaway). This won’t turn her “into an Olympian”, she concedes – at which point we’re suddenly on the top diving board, where she elbows alarmed medal hopeful Lois Toulson out of the

way – “but it’s a swap in the right direction”. It’s easy to see a fun campaign like this having legs, with different ads highlighting new recipes (and athletes) right up to when the Games begin, in July. It’s up to rivals like Tesco to put an end to its price message: there’s lots of small print, but it touts a hefty 30% saving over Britain’s biggest retailer. Oof!

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1 February 2020 | The Grocer | 69