Interview with distribution Penny: private label at high sustainability.

A LET'S HAVE A TALK WITH PL MAGAZINE AND MONICA DI MAGGIO, PRIVATE LABEL MANAGER AND SUSTAINABILITY COORDINATOR.

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 start 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 sustainability: 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 packaging? 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.

Private Label lines: 40

Private Label references: more than 2,500

2020 turnover: 1,26

million euros

Average dimensions: from 300 to more than 1,000 smq

SHEET OF PENNY ITALIA

Covered regions: 18

Workers: 4,000

Average openings per year: from 20 to 25

2021 total network: 404

Distribution centers: 7

points of sale owned

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.

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.