Private Label Magazine Trade shows: to restart despite the pandemic Penny: private label at high sustainability Despar Italia, the strategicrole of PLs for the supervision of the territory 1/2022
Fairs
PLM - SOMMARIO
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Editorial A year of growth and new challenges for our magazine
18 Interview with distribution Penny: private label at high sustainability.
30 Markets PLs still the protagonists of the fruit and vegetable department.
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Cover Trade shows: to restart despite the pandemic.
22 On-the-field Experiences Temporary stores of large-scale distribution: PL become brands.
38 Interview with the company Unifrutti, innovation in fresh fruit and vegetables is possible.
26 Interview with distribution Despar Italia, the strategic role of PLs for the supervision of the territory.
42 QBerg Observatory Fruit and vegetables: the Private Label is strong on the promotional flyers.
14 The private label scenario 2022, the Global Food Inflation.
Editorial director Maria Teresa Manuelli
Scientific Committee Stefano Ghetti, Expertise on Field Managing Partner/ IPLC Italy Partner Gianmaria Marzoli, IRI Italy Retail Solutions Vice President Alberto Miraglia, Retail Institute Italy General Manager Paolo Palomba, Expertise on Field Managing Partner/IPLC Italy Partner Emanuele Plata, PLEF Co-founder, Past President & Board Advisor
Translation Jcs - Language Services info@jcslanguage.it
Contributing Authors Federica Bartoli, Maria Teresa Giannini, Fabio Massi, Malachy O'Connor, Fabrizio Pavone, Luca Salomone
PLMagazine Bimonthly supplement of Distribuzione Moderna magazine, a media outlet registered with the Court of Milan Registration No. 52 of 30 January 2007 Editor-in-chief Armando Brescia
Creative Director Silvia Ballarin Editor Edizioni DM Srl - Via A. Costa 2 20131 Milano P. Iva 08954140961 Contact Tel. 02/20480344 redazionedm@edizionidm.it Advertising Ufficio commerciale: commerciale@edizionidm.it Tel: 02/20480344
There is no guarantee that we will publish the original versions or any part of submissions (texts, articles, news, images, data, charts, research, etc.) sent by authors outside the Editorial Board. Submissions may, however, be published in a revised form for editorial reasons. It should also be noted that sending a submission constitutes an automatic authorisation by Edizioni DM Srl to publish it free of charge in all its publications.
EDITORIAL - PLM
A year of growth
and new challenges for our MAGAZINE One year has passed since the first release of PL Magazine. Started as a gamble, although well reasoned, a year later, it has proved to be a winning choice: to narrate the evolution of an industry, that of Private Label, which is constantly growing, and to stimulate challenges, innovations, collaborations and openings at an international level. The idea came from an intuition of the editor Armando Brescia and was supported by the editorial staff of Edizioni DM and by the consulting company partner, IPLC. Many other professionals have decided to take part in this project, enriching and supporting us through this journey. Above all, the guide and support of our Scientific Committee comprising the leading experts in the PL industry. Then, the interest, which became consensus, of our readers, every day more numerous, that follow us. Since the beginning, we’ve decided to publish our PL Magazine in two languages, Italian and English, to better represent the dual souls of the Italian excellencies that make up our private labels: proud of our origins and of our knowledge, but open to the world and to exportation. And so, also from abroad, the interest in the magazine that recounts the strategies and what’s new in distribution and in the PL supply chain was not long in coming. We have readers virtually from every part of the world: Europe, in particular, from the United States, Central and South America, Middle East, to the Far East (with India, China, Taiwan and Japan mainly), down to Australia. This success is not enough for us, though. For this reason, we decided to relaunch and grow further. Starting with frequency: in 2022 we will release our PL Magazine every two months. Furthermore, as we have experimented in this first year, we will continue to build this system of information and in-depth analysis on the subject of PL, which includes debates, events (such as the PL Awards), partnerships and reports from the main trade shows and distribution chains all over the world. There is no shortage of stimuli and will to broaden our horizons. Stay tuned. Maria Teresa Manuelli Editorial director
PLM - COVER
Trade shows: TO RESTRART,
despite the
pandemic An integral part of the Private Label ecosystem, events and exhibitions are useful for the state of the art of the sector and for discovering strategies for future development by establishing a dialog among the different players of the supply chain. The COVID-19 pandemic represented a setback for trade shows, but here’s how they plan to relaunch in 2022. 4
COVER - PLM
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PLM - COVER
PL shares at global level PL % Value share
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COVER - PLM
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o longer considered as a temporary trend, Private Labels (PLs) are now pillars of the Big Organized distribution (Bod) and retail at a global level, with positive rates everywhere. As Romolo de Camillis, NielsenIQ analyst, states “Observing PLs is key to understanding a brand positioning, its health and its trend in the coming years. At this stage, PLs are a strategic asset for distribution.' According to the data by Nielsen presented at the Edizioni DM webinar called ‘The PL sector and the role played by trade shows’, during the year June 2020-June 2021 PLs grew by 2.8% (slightly lower than that of the packaged consumer products). In particular, in Western Europe it was equal to 2.3%. Excluding the fresh products and the goods at a variable price of PLs, the contribution of PLs when it comes to sales throughout Europe is clear, however different depending on the geographical areas: from Spain with almost 40% to Italy and its 28% (the lowest in the EU). The share in value of PLs is 32%, and may even reach 40% in volume when considering both goods produced and sold. In the last 6 years, the weight of the so-called ‘Low Price’ and ‘Golden’ customers increased, stepping from 12% to 21% and from 14.9% to 18.2%; 'Silver' customers remained almost the same (only 0.2%), while the weight of the ‘Mainstream’ and ‘Traditional’ customers decreased respectively from 27% to 24.5% and from 21.4% to 11%. Consumption, therefore, is being radicalized between ‘best price’ and ‘premium’. As shown by the snapshot of August 2020 – August 2021, the greatest growth of the top 3 Italian consumer groups comes from the controlled supply chain (82.4%), ‘organic/ eco-friendly’ (72.9%), and ‘kids’ (79%) products. Sustainable agriculture or breeding (for 32.9%), the protection of ‘Made in Italy’ (at 22.7%) and healthy lifestyle (17%) are actually the most successful PL categories among consumers; categories that are estimated to grow even more. This phenomenon is a result of the pandemic, but just partially: it has more ancient roots. A sign of recent times, instead, is the need to rethink dates and methods of conducting themed trade shows, in an attempt to prevent and not chase the continuous Covid-19 changes and the rules through which governments try to stem it.
Purchasing styles to read the transformations of Large-scale consumption
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Distribuzione Moderna. Retail in real time. The first online newspaper for suppliers and retailers.
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COVER - PLM
IN FRANCE THE ‘ SIRHA-MADE’ STICKS TO THE DATES, BUT GOES FOR PHYGITAL
The ‘ Made’ trade show in Paris, established in 2012 under the name of ‘ Mdd Expo', then renamed ‘ Sirha-Made’ in 2021 as a part of the big GL events group, is the main PL trade show in France and one of the most important in Europe for producers, co-packers and catering services. The event has two keywords: ‘continuous innovation’. 'This year our trade show, taking place on March 15-16, will be called ‘Futuristic Feed’. More than one third of exhibitors will present their innovations, and this arouses a lot of curiosity, especially if we consider that 50% of what will be consumed tomorrow hasn’t been invented yet” - says the Trend and Innovation Expert Sophie de Reynal about the event. The trade show will host 400 exhibitors, c.33% of which, first time exhibitors. “We're really confident about 2022 – adds Mrs. de Reynal – we need to face up this ‘new normality’, so we’ve thought of a new way to get visitors through hybrid events, half physical and half virtual.” With more than 4000 project holders, decision makers from national and regional purchasing centers for the catering, the large-scale distribution (both online and instore), this trade show focuses on the French internal market but, being open to the world, it’s, most of all, an opportunity for foreigners who are willing to export to France. Indeed, c.35% of exhibitors come from abroad. “Meeting in person is just as important for manufacturers as it is for retailers and catering services. In 2020, we were lucky because our last show, which took place in September, was the only food event of that year; it was an unexpected success as we were in the middle of the pandemic.'' On the contrary, we had to cancel the 2021 edition, so as not to compete with other trade shows by the same organizers that take place in France between September and December. Today, consumers have turned their attention to national food, of course, but in particular to the matter of ‘origin’. Italy and Spain have a lot to show in this regard, because they are famous for their culture and tradition in gastronomy, with pasta, oil, cheese... so our trade show represents a great opportunity for growth for Italian exhibitors in France.
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PLM - COVER
MOSCOW IPLS WILL BE HELD LIVE IN APRIL
Far to the east of the Seine, in Moscow, Ipls 2022 will open the doors of its 9th edition during the first week of April, returning to its original location after September 2020 and June 2021. This trade show is one of the 'Reed exhibitions' in Russia and it’s been active since 2014. It’s a B2B event espressely for PL in every field, such as, food, non-food, design and packaging, healthy and organic products (which is the last category we introduced, as it is very popular in Russia), “Here Private Labels interpret rational choices, healthy lifestyles, active online sales” as the Ipls Key Account Manager Alexander Kalyagin explains. The event also deals with PLs that are facing the 'tried and tested' phase and its keywords are: 'support' and ‘diversification’. “Ipls is mainly addressed to foreign companies who intend to enter the domestic market. In this regard, the latest news on rules and certifications are shared during several seminars, to help companies understand what the easiest, fastest and legal way to bring their products to Russia is. – explains Mr. Kalyagin - During the trade show, we also provide a gallery of the best PL products present and the summit opens for retailers to connect. This is why we'll be running the show in-person, although with all the anti-Covid precautions, and implementing a ‘fully online’ format isn't that appealing.” Visitors’ company profile includes: retail chains (online and in-store), wholesalers, distributors, Ho.Re. Ca, manufacturers, services. Although it could be defined as a 'regional event', as it involves the major local and global supply chain names active in the Russian market and former USSR countries, these chains gather a customer base of as many as 5 million people: ‘Auchan’, which sells out one fifth of its product under a PL; 'Pyaterochka', whose PL in 2020 grew from 13.9 percent to 17.4 percent and is expected to reach 20.4 percent in 2021; ‘Magnit’, which has a PL share of 10% in 2021 and is expected to reach 25% in 2025; and finally ‘Verniy’, which from 7% is expected to to end 2021 with 9.8%. The Russian PL market is young and small yet the share of PL products in overall retail sales has leapt from 1.7% in 2011 to 5.3% in 2021 and is increasing year by year, no longer just because of Covid, with more than half of retailers now planning to increase their shelf availability. After all, during the pandemic, the range of PL products has expanded a lot; they started with low prices, then stood out for their quality and now they are also present in the premium segment.
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COVER - PLM
The growth of Golden and Low Price, drivers for polarization Weight in % on the total large-scale consumption value
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PLM - COVER
FOR MARCA THE KEY WORDS ARE COOPERATION AND GROWTH
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Domenico Lunghi, by Marca in Bologna, hopes for “a ‘single direction’ to help companies from and in different markets orient.” In January 2020, the last edition before the pandemic, the trade show hosted 892 exhibitors in a 22.604 m2 area. After last year’s setback, the 2022 edition, driven by everyone's strong desire to get back to face-to-face exchanges, seems to be born under a lucky star, even though it has been postponed to April 12-13. This date was chosen by the exhibitors themselves, who fully shared the organizers' cautious line (given the rise of infections in Italy), so in a short time the number of confirmations exceeded 900. “Although with all the mandatory anti-Covid measures, we’ll be working live because in a trade show where usually 80% of exhibitors come from the food sector, smelling, tasting and touching is essential – as the Director of PL, food and pet industry of BolognaFiere says – However, there will also be an online ‘pre-show’ with meetings between exhibitors and buyers.' This event is young compared to other foreign trade shows. It has been organized for 18 years, while Amsterdam's main European trade show is in its 36 year, yet over the last five years, Marca has increased its visitor numbers to 12,000. According to Lunghi, there are two reasons for its success: the choice of the right time of the year, when the brands start up again and want to do some research before confirming partnership contracts with their co-packers; the strong collaboration with Adm, the Italian Association of Modern Distribution. Moreover, for three years now, Fiera has had an agreement with a number of agents operating in various European countries, South Korea, Latin America and Israel, contacting and inviting to Bologna the main brands of those markets, when not partners of Italian retailers. This year Marca is once again working with the Ice agency, thanks to which, around 15 important buyers are expected to arrive at the trade show from the USA alone. The aim now is to become even more international: despite Marca's fame and the fact that its visitors come from all over the world, the majority of exhibitors are still Italian. “In September 2021- recalls Lunghi - the 1st ‘Marca China’ was held in Shenzhen, where our partner was the Shenzhen Retail Business Association, with 6 thousand visitors and 300 exhibitors, including 16 Italians. It went well and we are going to organize it again, because this helps us to accompany Marca’s companies to China and to remind ourselves that, despite the pandemics, organizing largescale events safely is still possible."
COVER - PLM
u Dual role for PLMA of Amsterdam and Chicago
While Covid-19 intensity doesn't seem to abate, the two major events dedicated to PL build a network. This is how the new online trade show, Plma Global was born. From May 28-31, 2022 it will gather all the exhibitors and buyers of the two main events of the industry, Amsterdam and Chicago. Today, these two trade shows remain scheduled in person, the first from May 31 to June 1 and the second from November 13-15, but the new Plma Global will combine them providing a digital platform for distributors all over the world (supermarkets, hypermarkets, discounters, drugstores and other formats) and current or potential suppliers of PL. This, according to the organizers, will help the parties redefine their partnership and develop together better solutions to ensure a timely and widest possible distribution of goods. And this last aspect is still one of the major issues from the beginning of the Covid-19 pandemic. Plma Global will support real-time discussions and meetings, product shows and the scheduling of appointments, also taking into account the different time zones. Furthermore, the ‘search’ function of Plma Global will allow participants to find suppliers, not only through already known criteria such as (company name, category, description, continent), but also through visual research for the products in the photo gallery.
THE SECTOR OF TRADE SHOWS NEEDS CONTINUOUS SERVICES
“Private label is becoming a well-rounded brand with its own credibility and, according to many entrepreneurs, it’s key to new market entries.” These are the words of Paolo Palomba, par tner of the consulting company Iplc, the international organization of experts in the world of retail and production, speaking of PLs. According to the Iplc consultant, there is great demand for preparatory services to trade shows by exhibitors, especially to put exhibitors into contact, so that the benefits of the events do not end in 3-4 days, as well as for follow up services until the next edition. " The world of PL and their internationalization," concludes Palomba, "cannot do without events that, along with business matching, create and develop content for summits and conferences.” l
Maria Teresa Giannini, Professional Journalist specialized in Large-scale Distribution. 13
PLM - THE PRIVATE LABEL SCENARIO
2022, the Global Food
Inflation
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THE PRIVATE LABEL SCENARIO - PLM
Cost spikes on energy, packaging, transport, covid protocols an labour availability have heightened inflation. What will happen in the upcoming year? An analysis by IPLC.
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n December 2021 the IPLC team held an online seminar on the topic of food inflation attended by 185 industry professionals from more than 20 countries, primarily manufacturers from around the world. When surveyed, 100% of companies told us that they had taken cost increases across all of their key inputs in the previous 12 months, including food ingredients, packaging, energy, transport and labour. Effectively, all of the big-ticket cost items in the manufacturer P&L were seeing significant inflation. Some of us will remember that a similar food commodity cost spike happened in 2007-8 around the global crash, and again in 2011 around the sovereign debt crisis. But in 2021-22 the impact is heightened by the additional cost spikes on energy, packaging, transport, covid protocols and low labour availability.
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PLM - THE PRIVATE LABEL SCENARIO
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urther, in 2008 we saw the food commodity cost spike reversed within a year, but in 2011 it took 5 years for the cost inflation to fall back, so who could predict what might happen this time? Add to this the fact that limited range discounters have grown strongly in most markets. Taking the Irish market for example, in 2008 Aldi and Lidl had combined 10% share whereas in 2021 they have >25% share of the market. In the last 10 years, the mainstream retailers have developed competitive strategies to counter the discounters, focusing on private label core ranges and EDLP price matching. As a result there has been a de-facto price freeze on the highest volume, highest value PL products which now constitute a significant proportion of items placed in the average trolley. So it is incredibly hard for suppliers to achieve a cost increase when the buyers are required by their bosses to hold steady on retail prices, and so many of the retail prices are matching the limited range discounters. But possibly the greatest challenge is that the majority of the category buyers that suppliers are dealing with are less than 30 years old and have no memory of the cost spikes in ’08 and ’11. They have only known deflationary price changes in the last 10 years and lack the experience to manage inflation.
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Suppliers are not requesting the necessary cost increases, possibly because they are stuck in a contract. This would seem a risky and unsustainable strategy given what we know about tight margins in food and drink production. Very few manufacturers have the reserves to indefinitely postpone cost increases of this magnitude but they are very wary of damaging the relationship with retailers.
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Retailers are paying cost increases to their suppliers to help maintain good long-term relationships and on-shelf availability, but they are holding back on passing these on to consumers for fear of losing their competitive position. Again, this would seem unsustainable, especially if the cost inflation hasn’t yet peaked and could take several years to fall back. But if retailers are holding back pre-Christmas, there will likely be movement in the new year.
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Retailers are delaying or refusing to accept supplier cost increases and suppliers are selling below cost and crossing their fingers, hoping for their input costs to fall in early 2022.
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THE PRIVATE LABEL SCENARIO - PLM
In reality there’s a mix of all three options happening but all are risky, even in the short to medium term for three reasons. Business failures. If suppliers don’t achieve cost increases with their customers then their financial position is weakened. If this is allowed to continue, then there will be industry consolidation and some companies will cease trading. Loss of trust. If retailers and suppliers push back too hard on cost increases then someone, somewhere in the extended supply chain could cut a corner. After the cost spikes of 2007-8 and 2011 we observed an increase in high profile food fraud and food safety incidents. If your company gets caught up in one of these incidents the reputation damage could be even more damaging than trading at a loss. The end of cheap food. We know there is a climate crisis and that global warming is causing sea levels to rise. This is already reducing the amount of suitable land available for food production due to saltier soils and flooding. We also know that climate change events will make crop yields much more unpredictable. And we know that the human population will increase by 25% in the next 30 years. So, if the first major food inflation in a decade is a challenge right now, then food security is going to be the emerging problem in the next few decades. Conclusion The challenge remains for the overall food and drink supply chain to make sustainable profitability a priority at all levels. And this is eminently possible if all players take an honest and transparent approach. And if retailers claim that consumers simply won’t pay more for food then think about how we got to our current situation. Prices haven’t deflated over the last 10 years because consumer were unwilling to pay. Prices have deflated due to retailers fighting for continuous sales growth and market share. And a portion of the money saved by consumers was simply redirected to spend on food and drink in cafés, restaurants and hotels instead! In future, our grocery retailers are going to have to find new ways to compete other than price. Otherwise, local suppliers will go out of business, farmers around the world will exist in poverty, and sustainable employment will be lost in the communities in which they operate. Remember March 2020 when suppliers moved mountains to keep up with the demand prompted by panic buying and lockdowns? Well, 2 years later, those suppliers need their retail customers to exercise that same collaborative spirit, paying a fair price that recognises the inflationary crisis we’re in right now.
Malachy O'Connor Irish partner at IPLC-International Private Label Consult. 17
PLM - FROM THE DISTRIBUTION’S POINT OF VIEW
A LET 'S HAVE A TALK WITH PL MAGAZINE AND MONICA DI MAGGIO, PRIVATE LABEL MANAGER AND SUSTAINABILIT Y COORDINATOR.
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FROM THE DISTRIBUTION’S POINT OF VIEW - PLM
Penny: private label at high sustainability The discount chain of Rewe Group counts more than 400 points of sale in Italy and a turnover of about 1.3 billion euros. PLs are vital, as always when it comes to the channel. With its choices, the brand aims at environmental and human respect, while strengthening the SMEs. German school and national heart. This is Penny Italia in a nutshell, a big player that closes 2021 with a very important network. PLs are relevant. But what are their strategies? We talked about it with Monica Di Maggio, Private Label Manager and Sustainability Coordinator. Let ’s star t with the fight against waste. . . On December 12, we joined ‘ Too Good to go’, and we were the first discounter in Italy to do so. This shows, once more, our attention to the theme, which was already clear by the lasting partnership with Banco Alimentare and by the choice to sell about-to-expire products at a fixed price. All of this proves our commitment to sustainability. Private Label and sustainabilit y: is there a link ? There is, and this means, for Penny, a very long journey that starts with the planning and ends with a set of positive cultural messages. For example, ‘My Bio Bellezze Naturali’ brand, part of the ‘My Bio Food' line, aims to change the approach of the fruit and vegetable world, showing that the most important aspects, beyond aesthetics, are taste and health. What about pack aging? We’re working also on that and, what is new, is that at the beginning of 2022 we will bring on the shelf a line of non-food green products, both in terms of packaging and formulation. Then, certification is fundamental. For ‘La buona pasticceria’, that is to say in confectionery, we guarantee palm-oil free recipes and, when there's chocolate in the ingredients, the ‘Rainforest Alliance’ certification is guaranteed as well. There’s also the ‘Friend of the sea’ certification, that covers our ‘Gran Mare’ line. Our objective is to have 100% of our brands certified.
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PLM - FROM THE DISTRIBUTION’S POINT OF VIEW
Private Label references: more than Private Label lines:
2,500
2020 turnover:
1,26
million euros
Covered regions:
40 Average dimensions:
from 300 to more than
18 SHEET OF PENNY ITALIA
Workers:
4,000
1,000 smq Average openings per year:
20 to 25
from
2021 total network:
Distribution centers:
404 points of sale owned
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Any other elements? Today, more than ever, supply chain control is very important. Take the ‘Ortomio’ brand, for example; it offers plant-based products only for frozen food and canned vegetables in general and relies on a procedure that examines all the production process of the product, including the environmental impact. How relevant are Private Labels? Private labels are definitely strategic. Their incidence is very high and, in certain categories, such as fresh and ultra-fresh, they reach 85%. For example, fruit and vegetables, cheese, bakery products, and cold cuts... On average, PL reaches more than 50%, for about 40 brands and more than 2,500 references. Some brands are only present in some departments, such as ‘Fior di pasta’, which is in dry and fresh main courses, while others are cross-category, such as ‘Cuor di terra’, dedicated to Italian food excellencies. 20
FROM THE DISTRIBUTION’S POINT OF VIEW - PLM
What are your best sellers? To us, our most important best sellers, not just for the number of references, but also in terms of turnover, are ‘Penny’, for sure, which covers multiple departments and everything that is of daily use, such as bread, flour, sugar, oil and vinegar, ‘Sapor di cascina’, for ultra-fresh - cold cuts, yogurts, meat -, ‘Valbontà’ for milk and cheese, entirely made from Italian milk, and ‘Natura è’, which works with Italian, traceable and low-pesticide fruit and vegetables. Our wine shop was also a success, with different levels of private label, among which ‘Archetto’ for table wine, ‘D’Alleramo’, for excellent wines, ‘Roccamerlata’, for sparkling wines. Here, variety is important. This means providing an assortment of products differentiated by price levels. Other key aspects? Confectionery and excellencies are always relevant in large-scale distribution, and, at Penny, they leverage multiple brands. ‘Regali Bontà’, for example: focused on the dual concept of gifting treats and royal treats, this year, has been enriched by whole grain products. A special mention should be given to ‘Selection’, which aligns all the flavors in the world. To top it all off, ‘Cuor di Terra Le Specialità’ which is a constant and cross-sectional product, with stuffed pasta, high quality cold cuts and much more. In other words, in 2022 we’ll work even more on supply diversification and quality, to give a concrete answer to a customer who increasingly looks for the right balance between price and quality of the products. Last but not least, suppliers. How do you choose them? Our decision-making criteria are many, but never fail to fulfil our mission: providing the highest quality at the best price. Fair certifications, Italian origin, which led to the ‘Abbracciamo l’impresa italiana’ initiative (Let’s embrace the Italian companies), dimensions, the idea of privileging SMEs that, otherwise, couldn’t access large-scale distribution, are all essential aspects. These are all carefully managed by our long-time suppliers that work with us in true partnership. This doesn’t mean that there are no competitions and that they never compete with co-packers, but that there is always a reason behind our selection process.l
Luca Salomone Professional journalist specialized in consumer goods, distribution, shopping centres and finance.
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PLM - ON-THE-FIELD EXPERIENCES
Temporary store of large-scale distribution:
PL become
BRANDS The growing importance of private labels over the last few years has intensified the development process and led brands to become true independent labels.
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ften a privileged tool for corporate marketing strategies, temporary stores or pop-up stores are temporary points of sale, which are mainly set up in given periods of the year, like the holidays, or linked to specific company initiatives. The temporary nature of these stores becomes an opportunity to experiment targeted marketing operations, as well as for companies to implement original, counter-cultural and innovative choices aimed at raising brand awareness and strengthening consumers' bond with brands. Also the main players in large-scale distribution have extensively experimented with this format, as a true lab of innovation, by pushing and promoting private labels and taking them outside of conventional stores, thus giving life to a transformation process that, from private labels, has made brands fully-fledged brands.
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ON-THE-FIELD EXPERIENCES - PLM
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PLM - ON-THE-FIELD EXPERIENCES
This is the case, for example, of ‘Unes’ that, at the end of 2021 inaugurated two temporary stores, one in the shopping center of Arese and a Christmas-themed store in Corso Venezia in Milan. In fact, these openings enrich the list of already existing stores aimed at further pushing the ‘Il Viaggiator Goloso’ brand, which boasts as many as ten stores and is an integral part of the international strategies that Unes has implemented for some time now. As Rossella Brenna, Chief Executive Off icer at Unes Supermarkets, pointed out, "the strategy is to complete the transformation of the label into a brand, while expanding beyond the national borders." The Christmas holidays represented an opportunity for Unes PL to approach non-food businesses, such as ‘Cargo’ and ‘High Tech’, and to renew its collaboration with ‘Veneranda Fabbrica del Duomo’. This collaboration gave life to the limited edition of saffron panettone available in the Christmas store in Milan. Also Esselunga relies on temporary stores to enhance the brand of high pastry ‘Elisenda’, found in roughly one hundred stores of the label. The brand was launched in 2016 and was conceived in collaboration with the Cerea brothers' Michelin-starred restaurant ‘Da Vittorio’. In this regard, Esselunga's strategy aims to raise awareness on the distinctive quality of the Elisenda brand, providing it with an independent space, or better, creating a store named after this brand of excellence. "Technically speaking, that of the temporary store is a vertical format"- remarks Roberto Silva, Chief Marketing and
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ON-THE-FIELD EXPERIENCES - PLM
Customer Off icer at Esselunga - "which gives you the chance to focus on a limited offer, and discover its main features and peculiarities. Since its short duration doesn’t entail any fixed costs, it is a convenient expedient, but, at the same time, an important means of communication to strengthen brand awareness". And even the smallest brands are now experimenting. The ‘La Rosa dei gusti’ pop-up store, the brand of excellence developed from an idea of ‘Abbi Group’, was open to the public until December 31. The Cagliaribased store offered an assortment of traditional Christmas food specialties, as well as a range of references that reflect the brand's values, based on premium quality and affordability.l
Federica Bartoli Journalist specialized in Large-scale Distribution. 25
PLM - FROM THE DISTRIBUTION’S POINT OF VIEW
A LET 'S HAVE A TALK WITH PL MAGAZINE AND MICHELA COCCHI, PL DEVELOPMENT BRAND MANAGER.
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FROM THE DISTRIBUTION’S POINT OF VIEW - PLM
Despar Italia,
the strategic role of PLs for the supervision of the territory The big player in distribution, with a turnover of 3.9 billion euros in 2020, growing by +8.4% compared to the previous year, closed its last fiscal year with more than 60 openings, for a total investment of 90 million, including new stores and restylings. by Luca Salomone
In January 2020, the joining of Gruppo 3A - together with Aspiag, Ergon, Fiorino, Maiora and Scs - and the growth initiatives throughout the country, launched by the six consortium member companies, helped the Consortium, Consorzio Despar Italia, reach a total amount of 1,399 points of sale (Despar, Eurospar and Interspar labels) with more than 811,000 sqm of surface area and a coverage of 16 regions. And, in 2021, this development path concerned forty additional facilities. At the same time, the turnover of PL products purchases reached 387 million euros, with a share of 20.3% in total grocery and a 9.4% sales growth. The product lines that recorded the best performances last year were: Despar (mainstream), Despar Premium, Veggie, Free From e Scelta Verde Bio,logico. During the last fiscal year, Despar Italia widened its supply, launching more than 200 references, and renovated its assortment with more than 270 restylings. For this group, leader in market coverage in terms of distribution and supervision in the country, PLs have always had a key role, as Michela Cocchi, PL Development Brand Manager, told us.
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PLM - FROM THE DISTRIBUTION’S POINT OF VIEW
Let ’s star t from your por tfolio. How many products does it include? At present, we have about 3,300 items, divided into 17 labels. The PL share is growing steadily. In 2014 we were at 17.1%. We closed 2020 at 20.3%, as I said, and the progressive number, at the end of August, increased by 20.7%. Let ’s talk about innovation. . . To make one first example, we’re restyling the packaging of cold cuts, both Despar and Premium, to replace the plastic tray with a paper one, in line with our sustainability strategy. Moreover, in 2021, we completed the rebranding of our fresh-cut products, which left the ‘Era Ora’ label to become ‘Despar .’ Then, sandwiches, focacce, and ready-to-eat wraps were launched to enrich the ‘Enjoy ’ line (food to go), which includes ready-to-eat and ready-to-drink segments. Des par always pays caref ul attention to both its bus ines s and human relations . What can you tell us about contracts ? The relationship with our suppliers is of partnership and, therefore, these are mainly multi-year ties. We privilege Italian small and medium enterprises, to enhance the uniqueness and tradition of the territories and support the national economy. What are your most s old PL? Our 2020 best seller products were especially fresh: cherry tomatoes in trays, Tarocco oranges, different fresh cut references, mozzarella cheese, fresh salmon, potatoes, eggs from free-range production, and packed cold cuts. This shows that the consumer knows the quality of the supply and trusts us a lot. Of course, also those products that were popular during the lockdown period recorded important growth rates, such as, for example, flour, or homecare products. As of 2021, we’re now experiencing a new important reaffirmation of fresh. Today, PLs , as well as the FMCG mark et in general, are required to provide a strong guarantee of sustainabilit y. What are your pillars ? Broadly speaking, Despar bases its sustainability on three pillars. The first pillar is wellbeing, which means attention towards healthy eating, that is to say, a balanced diet for people who want to stay fit and respect their own body. The attention towards the environment, on the other hand, focuses especially on improving the packaging in a greener way and reducing waste. And, since the group is leader in market coverage, our attention towards the territory, traditions, localism, and biodiversity, is particularly strong,
28
FROM THE DISTRIBUTION’S POINT OF VIEW - PLM
3,9
Turnover (billion euros) Total private labels
+8,4
Total network
17 Total PL references
3.300
KEY NUMBERS OF DESPAR ITALIA:
PL
20,3 20,7
Covered regions
16
2020
Associated companies
share/turnover 2020 (%) PL share/2021 August turnover (%)
1.399
PL turnover
387
Source: company data
Revenue growth 2020/2019 (%)
6
(millions of euro)
Private Label Manufacturers Association (Plma), the international association of PL products, has constantly rewarded your brands with its Plma’s International Salute to Excellence Awards . How many awards have you won so far? We've won seven awards in a row so far. We won, for 4 years running, with 5 Despar wines: from Valdobbiadene of Cartizze to Franciacorta, to Nebbiolo of Langhe Doc... Then, in 2020, the association recognized our fillet of seabass in Despar Premium Olive Oil with another award. This year, at the end of summer, Yogurt Drink Vital got on the podium. These results are a source of pride and a further confirmation of the reliability of our brands.l
29
PLM - MARKETS
PLs still the protagonists of the fruit and vegetable
department In 2020, according to Iri data on large-consumer-packaged-goods, PL fruit and vegetables reached +10.1% in value and + 9.7% in volume. Moreover, PL is a key player in many categories.
A
s for many other categories in large-scale consumption, the pandemic has had a strong impact on the fruit and vegetable market, especially during the most critical phase of the health emergency. The strong tendency of consumers to buy pre-packaged products, together with their greater preference for premium lines and for Italian and local references, are still a current trend, also for PL fruit and vegetables, that are strongly relevant for the department. In 2020, according to Iri data on large-consumer-packaged-goods sales, the consumption of PL fruit and vegetables reached +10.1% in value and +9.7% in volume, which helped to further expand its value share of the department (34.2%). Moreover, PL plays a key role in many categories. In fruit, for example, bananas account for about 62% of the overall supply, lemons for 49.5% and oranges of 45%; while in vegetables, the PL fresh-cut has an incidence of about 60%, carrots of 52%, and tomatoes and garlic exceed 40%.
30
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MARKETS
- PLM
20% overall share of PL products in
the first range of fruit and vegetables in Carrefour stores.
31
ADVERTISING
WHERE INDUSTRY 4.0 MEETS QUALITY FARMING: LA LINEA VERDE INVESTS €25 MILLION IN A THREE-YEAR TECHNOLOGICAL DEVELOPMENT PLAN. The Italian company’s aim is to focus on the quality of the finished product, thanks to skilful integration between crop farming and industry. Digital transformation, new, cutting-edge machinery and sustainability are the cornerstones of the operation. La Linea Verde has planned an investment of €25 million for a new three-year plan (2021/2023) it has named “Fast Farm to Fork”. Dedicated to the group’s factories, the project aspires to forge strongly ahead towards Agriculture & Industry 4.0 and sustainable production processes, with the aim of boosting the quality of the finished product and the efficiency of the supply chain, consolidating the group’s most important production area, fresh-cut salads. The investments will be used mainly for the purchase of systems and software designed to allow for greater process automation
and digitalisation. The “Fast Farm to Fork” project also includes extensive efforts with a view to guaranteeing sustainability. The new production layout makes the very most of agricultural produce, with a process that is flexible and adaptable to the specific characteristics of the raw materials. This results in a high-quality finished product. The new production process allows for more efficient planning, and thus has a positive impact on reducing food waste. In the next three years,
water consumption will be reduced by a further 20%, also thanks to the recovery of part of the water used for washing the fresh-cut salads, which will be re-used for non-food purposes in other departments. Furthermore, the new trigeneration plant has increased the amount of self-produced energy by 58%. The new plan is just the latest move by La Linea Verde, a company that in 30 years has succeeded in reaching the top of the fresh ready-to-eat fruit and vegetable and fresh plantbased ready meals sector, helping to innovate it thanks to its intuition and experience.
MARKETS
- PLM
90% the share of dried fruits, fresh-cut
and 5th range of PL within the fruit and vegetable department of Penny Market stores.
T HE PA NDEMI C EF F E C T C ONT I NUE S Although with a definitely lower intensity compared to the exceptional year of 2020, in the last months almost every category of PL fruit and vegetables have performed well. “ The sales in our brand stores - affirms Pietro Fiore, Fruit & Vegetables Manager at Todis - closed 2021 with a 4.5% increase with a consistent result across the network compared to 2020, when the department recorded an important growth. Our PL products made a great contribution, reaching a +32% and a 15% share on the overall sales of the department. During the year, in terms of purchasing trends, we noticed an increase in the consumption of exotic fruit, and especially of Hass Avocado, which became the king of sales and tripled in volume compared to 2020. Soups and ready-to-eat products are steadily increasing too.”
WELL DONE ORGANI C . FRESH-CUT AND 5t h R ANGE ARE UP AND RUNNI NG According to Pier Luigi Lauriola, Fruit & Vegetable Manager at Carrefour, in the first range of fruit and vegetable, the overall average share is over 20%, with a +1% increase compared to 2020: “Among the different departments, organic, almost entirely represented by the ‘Carrefour Bio’ products, records a growing trend compared to last year, as for dried fruit, whose incidence on the compartment exceeds 10%. In this category, the share of PL is very significant, accounting to around 30%, with our ‘Il Mercato’ brand dominating the shelves. After such a complicated 2020, fresh-cut and 5th range, covered by ‘Il Mercato’ brand for almost 60%, recorded new growing trends, exceeding again 15% of share within the fruit and vegetable compartment. Special salads, soups and fruit salads are recovering strongly too, with a double-digit increase. 33
Our pulses: quality from the ground up For over sixty years we have monitored every step of the journey our pulses take from the field to your table. We choose the best areas to grow them, support and train the farmers who share our values, and carry out rigorous checks at every stage of the production chain to guarantee the traceability of our products.
La Doria, the leading European producer of canned pulses in the retail sector.
www.gruppoladoria.it
MARKETS
- PLM
STRENGTHENI NG PARTNERSHI PS WITH PRODUCERS Some brands focus on the growth of PL, trying to transfer quality and freshness to the customer through the guarantee of their own brand. "PL in the world of fruit and vegetables has grown by +20% - affirms Nicolò Padrin, Senior Buyer of Fruit & Vegetables at Penny Market reaching 54% of the total assortment. Moreover, their ambition for next year is to extend the PL and focus on new supply chain projects and premium products. PL can only grow through stable supply agreements and stronger partnerships with producers, who, together with us, are guarantors of the final product. Speaking of the produce section, dried fruit, freshcut and 5th range of our PL have now reached a share that exceeds 90%. In addition to that, we are developing a PL also in the world of plants and flowers".
PREMI UM LI NES ARE I NCRE A SI NGLY LOVED In recent years, premium fruit and vegetable lines have literally doubled within the PL supply, reaching a share of over 10%. "Our flagship is the ‘A tutto sapore’ line - explains Pietro Fiore from Todis - where every product is a combination of typicality and taste, together with quality affordable to all our clients. In this line we provide premium seasonal fruit and vegetables, while guaranteeing flavor and palatability, also thanks to the collaboration with production companies that use their own technologies for taste control."
35
PLM - MARKETS
GROWI NG SEGMENTATI ON OF PL S PLs are becoming experts at understanding the needs of the consumer and they do so, by conveying their values through dedicated lines. "Our PLs - says Nicolò Padrin from Penny Market each have a specific connotation in terms of communication: proximity, close to the territory or a short chain, these are all values expressed by our brand ‘Vicino’. The brand ‘Natura è’ focuses on 100% Italian products from integrated farming, while the rest of the fruit and vegetable assortment is guaranteed in terms of quality by the ‘Amonatura’ brand. Moreover, as sustainability is one of the major themes of the coming year, many initiatives have been launched in this regard, from reducing packaging plastics on most products to testing biodegradable paper and film packaging."
TODIS
+32%
36
growth trend in sales of fruit and vegetables under the Todis brand in Todis stores.
15% share of PL in the department.
36
6
MARKETS
- PLM
CO MP ARI N G P RI V AT E LA BELS
THE STRONG FEELI NG OF I DENTI T Y GI VEN BY PL S TO THE SUPPLY According to Pier Luigi Lauriola from Carrefour, the main goal of PL products is to give a strong feeling of identity to the fruit and vegetable supply: "On the one hand, to distinguish ourselves from the market and, on the other, to perceive the values that each range contains. The ‘Filiera Qualità Carrefour’ line, for example, includes products from a controlled supply chain, from Italian companies that operate according to virtuous models of sustainable economy, as a guarantee of excellence for all consumers. On the other hand the fruit and vegetables of ‘Carrefour Bio’ observe the standards of organic agriculture, obtained with non-intensive production methods that respect nature. A relevant aspect of our work for the two-year period 2021/2022 concerns packaging, and the solutions proposed to limit plastic and use recyclable materials, such as the cardboard tray. Finally, the ‘Terre d'Italia’ line includes a selection of regional excellences, enhancing the Made in Italy and territorial identity".l
CARREFOUR
PENNY MARKET
TODIS
Fabio Massi, Journalist specialized in retail and mass market issues.
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37
PLM - FROM THE INDISTRY’S POINT OF VIEW
LET 'S HAVE A TALK WITH PL MAGAZINE AND MARCO VENTURELLI, UNIFRUT TI GROUP CEO.
38
FROM THE INDISTRY’S POINT OF VIEW
- PLM
Unifrutti, innovation in fresh fruit and vegetables
is possible
From the new segment in the banana market to projects with largescale distribution, the multinational fruit company talks about the latest innovations on private labels. by Luca Salomone
Unifrutti Group, a multinational fruit company operating in more than 50 countries, with a pro forma turnover of 709 million USD, about 11,000 employees worldwide and about 700 million tons of products sold, closed 2020 strongly in the black, with a gross profit margin growth of 18% and an Ebitda whose incidence on revenues equaled 12%. Briefly outlining the group's activities is virtually impossible, as they range from production to import/export, logistics, and distribution. With its CEO, Marco Venturelli, we turned our attention to the focus of PL Magazine, i.e. the relations between the company and largescale distribution. How impor tant is the relationship with modern retail for you? It is of utmost importance, also to understand consumer demands and create, in synergy, the best commercial offer. In Italy, as in other markets, our projects with retail are built on a strong collaboration, with the aim of leading to a different management of the produce shelf. These strong ties helped us design new lines, by understanding people's demand and, as a matter of fact, building new spaces.
39
PLM - FROM THE INDISTRY’S POINT OF VIEW
Source: company data
UNIFRUTTI'S IDENTITY CARD: 2020 Cultivated hectares
Date of Birth
> 14.000
1946
Total employees worldwide
Pro forma 2020 revenues
11,000
(million USD)
709 Pro forma volume sales (million tons)
700 Any examples? In Japan we’ve created a new segment, with the special 'highland' banana, ‘Chikyu Sodachi - Shiawase Banana’, grown in our plantation on the Philippine island of Mindanao, at over 1,000 meters above sea level, with excellent climatic and soil conditions, to achieve higher brix (sugar concentration) than any other type of banana grown in lower areas. Higher altitudes correspond, in fact, to a three-month longer maturation period, which maximizes sweetness. Thanks to these characteristics, Shiawase is a super-premium food, placed in a high price range, a fact that has ensured us great notoriety when accessing, as a brand, the Japanese market, and that has paved the way to a segmentation of this range in large-scale distribution. To mention another relevant recent project, there’s the case of lemons with edible peel, marketed both under the retailer's own brand and in the Unifrutti Nature line. Responding to the constant development of demand for all that is healthy and natural, this product has been of particular satisfaction in the last two years. Today, PL in your industr y is still not as strong as in other sectors . Why ? The Italian produce market is very complex and characterized by a cultural heritage of large consumption of fruit and vegetables in bulk. This is shown by the prevalence of the label in other product families that are traditionally purchased in packagings. This gap becomes even more evident when comparing the market penetration of PL fruit
40
FROM THE INDISTRY’S POINT OF VIEW
- PLM
in Italy with that achieved in other European markets, such as the UK, where PL fruit is widely spread, even in the fresh and ultra-fresh segments. That said, our country is quickly evolving. A transition, where fruit is less and less perceived as a commodity and more and more as an added value product, is undeniably underway. This is also thanks to the new digital native operators on the market, who work hard on the brand equity, whether it is a brand of their platform, or a fruit and vegetable brand that can give added value and diversify a supply that would otherwise remain generic. Large-scale distribution is a leader in the sale of fresh fruit and vegetables . In your opinion, is there anything more that could be done for the produce section? I think that we could do more in terms of marketing... Considering fruit and vegetables as a commodity is something that will inevitably pass through a better and greater communication of the products. Packaging will play a fundamental role, not only in attracting consumers, but also in conveying the values of the product, its history and origin. Similarly, an important contribution will be given by the direct branding activities of producers, which will have to be backed up by the communication space and initiatives of retailers in building solid and transparent brands. Strengthening both supplies, brand and private label, is the recipe for bringing out product variety and supply quality also in fruit and vegetables. It's already happening: the world of fresh produce has become richer, more diverse and broader globally in recent years, offering consumers new food experiences. As an example, a first and significant step could be to outsource the department to dedicated staff, so as to offer the support of real ‘greengrocers’. What would you suggest to chains? The development of joint programs and projects is a key element for the maintenance and success of business relationships. As a producer, Unifrutti has - and must have - a proactive role in introducing, to its partners and buyers, new products, or new varieties of fruit. For example, sustainability initiatives are a way to ensure very high standards, which strengthen the relationship with the retailer and which, over time, have turned into real innovation, creating an immediate market response. Relationships and dialogue are always two-way, and retailers also play a key role in the development of any project, bringing their specific knowledge and, above all, the interests of end customers to the table. Let 's conclude with the average duration of contracts . . . Contracts with Italian large-scale distribution brands are usually annual. In spite of this, the group boasts more than ten-year relationships with its main retail clients in every market. These are relationships that have been consolidated over time thanks to the development of multi-year programs and projects. A dialog with the customer is a fundamental part of a bilateral relationship, which cannot remain limited to price lists and negotiations, but which is increasingly focusing on offering the market and its partners solutions and ideas, while opening up new segments.l
Production and logistics centers in: America, Asia, Europe, Middle East, South Africa 41
PLM - QBERG OBSERVATORY
Fruit and vegetables: the PRIVATE LABEL is strong on the PROMOTIONAL FLYERS
QBerg, the leading Italian Research institute in price intelligence services and cross-channel assortment strategies (flyers, physical stores, e-commerce and newsletters) together with IRI, has zoomed in on the presence of PL on flyers in the Produce section (Fruits and Vegetables categories) for hypermarkets, supermarkets and superettes in 2021. It is now well established that the ‘ultra-fresh’ departments in a store are of great importance. So strong that it can never be missing in a promotional leaflet; so strategic as to be a fertile ground for the development of PL in this market segment.
42
T
QBERG OBSERVATORY - PLM
he first thing that emerges from our analysis is that the presence of PL on flyers in the produce section is predominant, especially in the Vegetable Category, where it reaches a 35% Qp4 Share of visibility on flyers compared to 29% in the Fruit Category. For both Fruits and Vegetables, we have established Top10 Subcategories. In detail:
u there are as many as nine that are above average for the Fruit category: Lemons weighing in at over 50%, Bananas (45%) and Oranges (over 38%); u three exceed 50% of the flyer share for Vegetables: fresh-cut Vegetables (58.25%), Green Beans (54.21%) and Carrots (51.03%). The tenth sub-category sees PL just below 30% visibility. In terms of the average price for the Fruit category, prices are equivalent for the whole sector, but with strong diff erences at the subcategory level. Considering the overall Produce section, the average price per kg is virtually the same in PL and branded products: the average price per kg ranges from 2.72€ for PL to 2.73€ for branded products. On the contrary, it is by looking at the sub-category level that strong diff erences emerge:
u among the 10 sub-categories where PL is less expensive than the branded product we can find, for example, Kiwis (almost 30% less), Apricots and Clementines (respectively 11.7% and 11.1% less); u the price ‘spread’ for the sub-categories where PL is more expensive than the branded product is even more relevant: from 30.8% for Plums to 43.4% for Figs. The Average Price of PL for the Vegetable category is on average more expensive and varied than the Brand. The main highlights are: PL Qp4 Share of visibility on flyer in the Produce section
FRUIT
VEGETABLES
Lemons
Fresh-cut Vegetables
Bananas
Green Beans
Oranges
Carrots
Cherries
Garlic
Apples
V range vegetables
Fresh-cut Fruit
Arugula
Plums
Onions
Grapes
Celery
Peaches
Mushrooms
Nectarines
Tomatoes
Source: In-Store POINT 2021
43
PLM - QBERG OBSERVATORY
1. the PL is more expensi ve at t ot al Cat e gor y: 4.74€/Kg vs. 3.83€/Kg for Branded products; 2. PL prefers to invest in convenience in the strategic sub-categories of the fresh-cut and V range.
Average Price of PL vs Brand per Fruit Category FRUIT
Average Price of PL
Average Price of BRAND
Kiwis
This second aspect is the most relevant, in fact the fresh-cut and V range are subcategories with very high added value PL vs Brand: PL Top5 less expensive PL vs Brand: PL top5 more expensive and high margins. It is Source: In-Store POINT 2021 precisely her e t hat PL tries to gain mark et share through f lyer promotions , leveraging an average price/k g that is s ignif icantly lower than the branded product . The s ame trend is als o obs er ved for vegetables , even more s ignif icant than for fruit , s o that in the sub-categories where PL is more ex pens ive, the differential with the average price of Branded products is much higher: in the Top 5 sub-categories, where this phenomenon occurs, the price of PL is more than double that of Brand. Apricots
Clementines
Watermelons
Nectarines
Further proof of the fact that the Produce s ection includes categories of relevant importance for ISS labels is given by their presence in what is defined as ‘privileged f lyer pos itions ’ : the f ir st page and the back cover. In this regard, bet ween Januar y and November 2021, we recorded as many as 4, 319 obs er vations of Fruit products and 2, 400 of Vegetables , on the front page or Average price of PL vs Brand for the Vegetable Category back cover on ISS f lyers . Going into VEGETABLE more detail, we Branded products hold a share of over 70%, both for Fruit Average Price of PL Average Price of BRAND and Vegetables. Finally, to conclude, our analysis focused on the use of Marketing Actions to support flyer promoPL vs Brand: PL Top5 less expensive PL vs Brand: PL top5 more expensive tions, grouping them into: Source: In-Store POINT 2021
44
V range vegetables
Cucumbers
Fresh cut vegetables
Other vegetables
Green beans
Peppers
Asparagus
Eggplants
Mushrooms
Pumpkins
QBERG OBSERVATORY - PLM
• “CONVENIENCE” , % of privileged positions PL vs BRAND in the Produce section which includes all discounting activiFRUIT VEGETABLES ties, such as Multibuy (2x1, 3x2, etc.), Second Unit Discount, Rebate; • “LOYALITY” , which includes all actions reser ved for card holders (loyalty card PL BRAND PL BRAND discounts, point Source: In-Store POINT 2021 collection or purchase with points, offersreserved for members); • “ BRANDING” , which includes actions aimed at highlighting a specific offer, such as the ‘branded box’, contests and cataloging under the label of ‘healthy’ where importance is given to a promotional offer on the flyer.
The diff erences between PL and Brand are not that significant: u for both, it is the concept of convenience that drives most of the off ers aff ected by Action. In fact, ‘ No Action’ equals 66% for Branded products and just under 63% for PL products. This means that these Use of Marketing Actions of PL vs Brand in the Produce section are driving categories, for which there PL BRAND is no need for further actions in relation to the promo other than the simply being present on such important media.; u there is a more than 4 p e r c e nt a g e point Convenience Loyalty Branding No action Convenience Loyalty Branding No action diff erence in ‘ No acSource: In-Store POINT 2021 tion’ between PL and Brand: in fact, PL pushes more o n B r a n d i n g (6 . 0 7 % c o m p a r e d t o 3. 9 0 % for Brand) and Loyalty ( 7. 6 7 % c o mp a r e d t o 5.06% for Brand). This last figure confirms a trend that the PL flyer is experiencing in all departments, perhaps because it is seen as a powerful driver when it comes to loyalty-related actions by the Trade.l
Fabrizio Pavone - Marketing Manager and Business Development of QBergg 45
