Interview with distribution Despar Italia, the strategic role of PLs for the supervision of the territory.

A LET'S HAVE A TALK WITH PL MAGAZINE AND MICHELA COCCHI, PL DEVELOPMENT BRAND MANAGER.

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.

Let’s start from your portfolio. 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.

Despar always pays careful attention to both its business 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 sold 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 market in general, are required to provide a strong guarantee of sustainability. 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,

Total private labels 17

Turnover 3,9 (billion euros)

Revenue growth 2020/2019 (%) +8,4

Total network 1.399

Total PL references 3.300

KEY NUMBERS OF DESPAR ITALIA: 2020

Covered regions 16

PL

share/turnover 2020 (%) 20,3

PL share/2021 August turnover (%) 20,7

PL turnover 387

(millions of euro) Associated companies 6

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